Energy Independent

Maverick oilman Boone Pickens talks about fuel prices and his love for philanthropy.

…His research convinces him that the price of oil will average close to $70 a barrel this year: “You’ll not see oil below $50 again except for very short spikes.” The basic reason is that the difference between the world’s daily production of oil and current world-wide demand is so tight. “Eighty-five million barrels a day is all the globe can do. The demand is right on 85 million barrels a day. It’s quite unusual, but it means prices stay high.” Oil-sand deposits from Canada will help, but Mr. Pickens is increasingly keen on alternative energy sources. He views the current ethanol craze as at least partially political–”Bob Dole once told me that there are 42 senators from farm states and that pretty much means the government is going to be into ethanol”–given that the product has a BTU content that’s 30% less than gasoline and analysts often don’t factor in the cost of the energy and water needed to grow the corn that goes into it.


Mr. Pickens is much higher on solar power, which he says is “getting in range” to be viable, along with natural gas, which he touts as a cleaner transportation fuel. However, last week his IPO for a company planning to use natural gas in bus fleets underperformed when investors snapped up only half the offered shares, so Mr. Pickens’s enthusiasm may be premature.

On energy, Mr. Pickens quickly dismisses two criticisms frequently lodged against him, that he is a speculator whose plays are driving up the price of oil, and that he doesn’t share the goal of U.S. energy independence. “There isn’t anybody who can talk a commodity market up more than three or four minutes. The fundamentals will take over at some point,” he says bluntly.

On energy independence he scoffs at congressmen he’s talked to who talk up the idea while at the same time they don’t want any more drilling onshore or offshore in the U.S. He thinks he has “had some influence” on President Bush’s position: “He says we are going to become less dependent on Middle East oil but he doesn’t say we’re going to be energy independent.”

Opinion Journal