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Oil will top $100 by end of 2010: Pickens

Houston, January 7, 2009

Texas billionaire T Boone Pickens said oil prices will rise above $100 a barrel by the end of 2010 as the global economy recovers.

Oil prices in the $40 a barrel range are "not going to be around much longer," Pickens told a gathering at the James A Baker III Institute for Public Policy at Rice University in Houston.

Oil prices have tumbled from over $147 a barrel in July to about $48 a barrel on Tuesday as demand in the United States and other developed countries slows due to the global economic crisis.

By late 2010, Pickens sees a rebound in oil demand sparked by a global recovery, pushing prices higher. If the US continues to rely on imported oil for 70 percent or more of its supply, prices could reach $200-$300 per barrel in another decade, Pickens said.

As an investor, Pickens said he remains "on the sidelines," with just 10 percent of his BP Capital hedge fund invested in energy. The fund lost $2 billion last year before shifting to cash as energy prices and stocks declined.

The recent drop in oil and natural gas prices has not derailed Pickens' effort to push the next administration to implement an energy plan to reduce US dependence on foreign oil.

Pickens said he hopes President-elect Barack Obama will announce details of his energy plan within the first 100 days of the new administration.

To replace one-third of the country's imported supply, Pickens has outlined a plan to use domestic natural gas as a transportation fuel and to invest in power generation from renewable resources such as wind and solar power.

While the cost to transform the nation's transportation and electric infrastructure is enormous, Pickens said reducing the annual tab for imported oil "can pay for anything you are doing."    

Government leadership is imperative, Pickens said. "Waiting for the free market can be disastrous," Pickens told reporters.

Lack of financing has slowed Pickens' ambitious plan to build the world's largest wind farm of 4,000 megawatts in the Texas Panhandle.

Instead of building his own high-voltage transmission line to move electricity from the first 1,000 MW of wind turbines to supply more populated areas of north Texas, Pickens said he will wait for a power line to be built by other investors through the state's Competitive Renewable Electric Zone process, expected to take three to four years.

Pickens said his first order of wind turbines is expected in 2011. - Reuters




Tags: Oil | Pickens |

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