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Texas Oil Man Warns Higher Energy Prices Will Return


Texas oil man T. Boone Pickens is continuing his effort to convince U.S. political leaders to embrace natural gas and wind power as part of a comprehensive energy plan for the nation's future. The recent drop in energy prices has blunted his message, but Pickens warns higher prices are coming soon and says he hopes the new Obama administration will prepare for the challenge.

Speaking in a lecture hall at Rice University, 80-year-old T. Boone Pickens called for the young people in the audience to carry forth the fight for a national energy plan. He said a severe crisis might not cripple the nation during his lifetime, but he said such a crisis could crush the hopes of younger generations unless the government acts now to develop a clear, comprehensive policy.

"We do not have a plan," said Pickens. "We have not had a plan. And a fool with a plan can beat a genius with no plan. I am convinced that is true. You have got to help get a plan for this country. An energy plan for this country is what we have to have."

Pickens spent $50 million of his own considerable fortune last year in a public relations campaign to promote wind power to displace natural gas used in electric power generation, with the gas then being used to displace a portion of the oil being used to produce gasoline and diesel fuel for transportation. The ultimate goal, he says, would be to sharply reduce the amount of oil the United States imports.

But Pickens knows he may have an uphill battle to fight as long as energy prices remain low.

"As long as you have cheap oil - see, that is the thing that has absolutely stunted the country as far as energy is concerned," he said. "You have those run-ups and people start looking at alternatives and they start talking about how to solve the problem and then the price goes down and everybody quits talking about it. You had it in the 1970s and 1980s and the 1990s, [and] 2008. And we are back at the same point right now."

But Pickens, who is a Republican, says he is impressed by President-elect Barack Obama and sees him as a man with a long-range vision of weaning the nation off oil from unstable regions of the world.

The price of oil is about 70 percent lower than it was six months ago. But Pickens says no one should expect that to last. He says oil is likely to trade for $100 a barrel again before the end of next year as the global economic recession ends and demand for energy grows.

"You only have 85 million barrels of oil [produced] a day in the world, so if demand goes to 87 [million barrels], which is where we were last year, when it goes to 87, the price goes up until you kill demand," he said.

But with demand growing and oil production declining, Pickens says oil could eventually reach $200 or $300 a barrel, with disastrous results for the United States and the world.

Many energy experts are skeptical about some aspects of the Pickens plan. Pickens has large investments in wind power projects in the Texas panhandle, and in natural gas production and delivery companies. And some experts do not agree with his assessment that world oil production has peaked.

But Amy Jaffe, an energy analyst at Rice University's James Baker Institute for Public Policy, says Pickens deserves credit for drawing attention to the need for a national energy policy.

"Mr. Pickens' main message, without going into the details of whether every aspect of his plan is good, the bottom line is that we have never tried to solve this problem," she said. "We have never tried really in a serious way to come up with alternatives. We have never had a full national initiative that was sustained and that is what it is going to take."

T. Boone Pickens says more than one million people have signed a pledge on his Internet web site to support his plan. He says he hopes such grassroots support will help him convince the Obama administration and Congress to work on a plan before energy prices go back up and another economic crisis develops.

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