NEWS

Pickens sees $300 oil absent push for renewables

07/23/2008

Alex Kaplun, E&ENews PM reporter

Oil tycoon T. Boone Pickens warned a Senate committee today that the United States could face $300 per barrel oil within a decade unless it acts aggressively to boost renewable energy and reduce its dependence on foreign petroleum.

"In 10 years, if we continue to drift like we’re drifting, you’re going be importing 80 percent of your oil, and I promise you, it will be over $300 a barrel," Pickens told the Senate Homeland Security and Governmental Affairs Committee.

Oil prices fell more than $3 to $127.75 this afternoon. The price briefly touched $125.63—the lowest mark since early June—after predictions that a hurricane in the Gulf of Mexico would miss platforms and refineries.

Pickens said he believes oil production worldwide has essentially peaked as demand grows. "We have walked into a trap, and we have to walk ourselves out of it," he said.

And Pickens—in interviews and television appearances—continues to warn about dire economic and national security implications of sending $700 billion or more overseas each year for oil.

"We are more fragile today from a national security standpoint than we have been since World War II," Pickens said.

"I am convinced," he added, "we are paying for both sides of the Iraqi war."

Pickens spoke in his first public Capitol Hill appearance since he unveiled his plan to reduce U.S. oil dependence. The Pickens Plan calls for building massive wind farms to provide electrical power and switching transportation to natural gas. Pickens is planning to build the world’s largest wind farm in West Texas, with a total capacity of roughly 4,000 megawatts.

All told, Pickens has predicted his plan could eliminate roughly 38 percent of the nation’s oil use and cut roughly $300 billion from the annual amount that the country uses to purchase oil.

Pickens has already met with Senate leaders from both parties to discuss his proposals and is slated to appear before the House Democratic caucus later today.

Pitch for tax-credit extension
Pickens told the Senate panel the government could facilitate the development of wind and other alternatives by extending the renewable-energy production tax credit for the next decade and help remove some of the potential roadblocks involved with building transmission corridors from the central United States to cities on the coasts.

"If the government wanted to build a grid, do it. If they don’t want to do it, I think the money is there to do it privately," Pickens said. "So it’s kind of like either do it, or get out the of the way. But give us the corridors to put it in, and it’ll be done."

When asked by lawmakers, Pickens also threw his support behind drilling in offshore areas and in the Arctic National Wildlife Refuge, saying he was in favor of "everything American" when it came to energy. "I’m saying do everything you can to get off foreign oil," he said.

But Pickens also said he did not believe production from protected areas would substantially reduce U.S. dependence on foreign oil and questioned just how much oil there was off both coasts.

"I think you’re going to get a rude awakening as to the value of the East and West Coast when it’s opened up and when it’s put up for sale," Pickens said. "When those tracts are put up for sale, you’re going to be surprised at the price you get for the tracts."