The latest forecast of legendary oil investor T. Boone Pickens, Jr., calls for the price of oil to remain around $150 a barrel for a while. From CNBC’s website this morning:

“I’ll stick with $150 (per barrel),” Pickens, who is also CEO of BP Capital, told “Squawk Box”. “Demand going down, that’s what will bring this thing in better balance”.

Asked where he saw the price of oil going in the next two years, he said: “You could get it back down to about 100.”

The “Oracle of Oil” is still convinced that oil prices are being driven by fundamentals, not speculators. From the CNBC piece:

The high oil prices are not determined by speculators and the weak dollar but by supply and demand, Pickens also said.

“It (the price of oil) isn’t driven by speculation,” Pickens said, adding that for 85 million barrels of oil production, demand is around 86 million barrels.

The legendary oilman told “Squawk Box” that the United States currently imports 70% of the oil it needs, compared to only 42% in 1990 and 24% in the 70s. This arrangement is costing the country $700 billion annually.

The good news is, Pickens has a plan for tackling the U.S. energy crisis. From USA Today this morning:

Today, Pickens will take the wraps off what he’s calling the Pickens Plan for cutting the USA’s demand for foreign oil by more than a third in less than a decade. To promote it, he is bankrolling what his aides say will be the biggest public policy ad campaign ever. The website, www.pickensplan.com, goes live today.

Jay Rosser, Pickens’ ever-present public relations man, promises that Pickens’ face will be seen on Americans’ televisions this fall almost as frequently as John McCain’s and Barack Obama’s.

“Neither presidential candidate is talking about solving the oil problem. So we’re going to make ‘em talk about it,” Pickens says.

He pointed out that the situation transcends partisan politics:

“This is not about Republicans vs. Democrats,” Pickens says. “This is about saving our country from the ruination of spending $700 billion a year on oil imports. Ninety days after the oil hits our shores, it’s all burned up, and we’ve got nothing to show for it. But they (foreign oil producers) still have our money. It’s killing our economy.”

The Pickens Plan relies heavily on wind and natural gas. USA Today’s Dan Reed wrote:

Getting lots more electricity with wind is only half of the Pickens Plan. Increasing wind-power production by itself won’t reduce U.S. dependence on foreign oil because most of that oil is consumed as gasoline.

The key, Pickens says, is that wind energy can be used as a substitute for natural gas now burned to generate electricity. That, in turn, will make far more natural gas available for use as a transportation fuel. Pickens’ plan is to produce enough wind power within 10 years to divert 20% of the natural gas now used to fuel power plants for use in cars and trucks.

Sources:

“Pickens Sticks with $150 Oil; Could Fall to $100”
CNBC, July 8, 2008

“Texas oilman T. Boone Pickens wants to supplant oil with wind”
Dan Reed
USA Today, July 8, 2008

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