Oil legend T. Boone Pickens, now CEO of BP Capital, says oil prices will continue to rise, possibly reaching $300 per barrel.
“Look at the history,” Pickens told Dan Mangru of Moneynews. It proves oil prices will go up, as OPEC revenues increased five times over the last five years, he says.
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Supply is stuck permanently at 85 million barrels per day, and demand will keep rising over the long term, Pickens says. By 2019, demand will reach 90 million barrels a day, he predicts.
“The only way if you peak on supply that you can kill demand is with price,” Pickens says. That’s what happened when oil prices hit a high of $147 in 2007.
So, 10 years from now, “the price of oil could well be $300,” he told Mangru.
To reduce our reliance on coal, Pickens suggests a “cash for clunkers”-style plan whereby power companies would get paid to retire coal plants and build natural gas plants instead.
With 22 percent of U.S. power already coming from natural gas, “the technology is in place” for that idea, Pickens says. “It would be easy to do.”
Natural gas can easily replace foreign oil, as gas supplies are plentiful, Pickens says. “Nobody ever stands up and says, ‘Hey Boone, that’s a bad idea,’ because if they do, they’re for foreign oil.”
Switching to natural gas from diesel on 18-wheel trucks alone will cut U.S. imports from OPEC by half to about 2.25 million barrels per day in seven years, he says.
And that reduction in turn will improve national security, he says.
“We import almost 70 percent of our oil, and over half of what we import actually comes from countries that aren’t even friendly to us,” Pickens points out.
Renewable energy, including wind and solar power also is vital, he says.
“Will it work? Of course it will work. You have to get your oar in the water and get started on it and not just go: ‘We don’t want to change anything.’”
Without change, the United States will continue to rely on coal for 52 percent of its power supply. “If you want to go forward with technologies of the future, you’re going to have to get into renewable,” Pickens says.
He says wind power will become feasible when natural gas trades at $6 or $7 per thousand cubic feet. The price now stands at $3.
“You’re going to have to wait. A lot of things are waiting now for economies to recover. But as the economy recovers, prices are going to move up,” Pickens says.
In the meantime, natural gas is viable as a transportation fuel. “The cheaper natural gas is, the better deal it is for our country,” Pickens says.
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