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T. Boone Pickens Predicts Oil to Go to $150 a Barrel

Posted on: Friday, 25 April 2008, 09:00 CDT

By Jerry Shottenkirk

Crude oil is flirting with the $120-a-barrel mark, and T. Boone Pickens says just stick around, we'll probably be looking at $150 before long.

How that translates into the price of gasoline at the pump, he didn't venture a guess.

However, since the conventional thought is that crude oil makes up 60 percent of the cost of gasoline, $4 a gallon may not be too far off.

Pickens shared his thoughts during and after his program at the Energy Conference, held Wednesday at the Cox Convention Center and hosted by Oklahoma State University's William S. Spears School of Business.

Pickens said America's future in energy has five basic avenues: coal, natural gas, nuclear, wind and solar.

He said global demand for oil is running at 87 million barrels per day, and that global oil supply is at 85 million barrels.

"When you have 85 billion to cover 87 billion, the price has to go up," he said.

Many have pointed a finger at speculators for driving up the price of crude oil on the New York Mercantile Exchange. Pickens said it's the supply and demand problem that is taking the price sky high.

"Only 5 percent of oil is in the commodity pool," he said. "If you did run it up, it would be briefly. Speculators cannot move it that much."

Pickens made billions in oil, and the founder of chairman of Dallas-based BP Capital Management is about to embark on constructing the world's largest wind farm. He said his company, Mesa Power, will invest $10 billion on wind and is planning to buy enough land in the Texas Panhandle for 2,700 wind turbines that will generate 4,000 megawatts of electricity.

Pickens said there is a path from Texas up into Canada that is ideal for wind generation.

He also has an interest in natural gas. Pickens said it may be the answer to power motor vehicles and added that the auto industry will have to do things differently.

"Seven million cars and trucks in the world are powered by (natural gas), and we only have 150,000 in the U.S.," Pickens said. "It will work. It's a clean and cheap domestic resource, but we have to have a plan to use it (for vehicles)."

Pickens' hedge fund has grown to manage $4 billion. In addition to BP Capital Management and Mesa Power, he heads Mesa Water, the largest private groundwater rights holder in the U.S., and Clean Energy, a transportation fuel alternative company he started last year.

Pickens has made plenty of profits over the years, but he's also given much of them away.

The Oklahoma A&M graduate has given his alma mater, now Oklahoma State University, $165 million for its athletic department and has donated a total of $600 million to various organizations.

The Energy Conference attracted 470 participants and features several leaders in the energy community, including: Devon Energy Chairman and Chief Executive Officer Larry Nichols; SandRidge Energy Chairman and CEO Tom Ward; Halliburton President of Completions and Production David King; OGE Energy Corp. Chairman, President and CEO Pete Delaney; Chesapeake Energy Senior Vice President of Production Jeff Fisher; Lehman Brothers' Managing Director Greg Pipkin; and Mark Stansberry, chairman of The GTD Group and author of The Braking Point.

Source: Journal Record - Oklahoma City

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