Ed Pilkington of The Guardian (UK) got the chance to speak to famous oilman T. Boone Pickens, Jr., in his Dallas office about his plans to build the world’s largest wind farm. Pilkington wrote Monday:

This month he will make the first down payment on 500 wind turbines at a cost of $2m each. The order is the first material step towards his goal of building the world’s largest wind farm.

Over the next four years he intends to erect 2,700 turbines across 200,000 acres of the Texan panhandle. The scheme is five times bigger than the world’s current record-holding wind farm and when finished will supply 4,000 megawatts of electricity - enough to power about one million homes.

Pickens, who is known as “The Oracle of Oil,” believes that the biggest problem facing the United States in the next 50 years is energy. The Guardian reporter wrote:

Pickens, being Pickens, has come up with a solution - and it makes his own gargantuan plans for a wind farm in the panhandle look tiny. For the benefit of the Guardian, he draws on a white board his master scheme. He carves out an enormous corridor of land running north to south through the middle of the US - along the great plains - where he would build an army of wind farms. Then he draws an equally enormous corridor running east to west from Texas to southern California which he would similarly dedicate to solar energy.

Source:

“Big oil to big wind: Texas veteran sets up $10bn clean energy project”
Ed Pilkington
The Guardian (UK), April 14, 2008

I came across the following press release this morning from NeoFirma, a Dallas-based company which specializes in well information management services for the energy industry. According to the release, legendary oil investor T. Boone Pickens participated in a NeoFirma webcast on March 28, where he talked about the importance of natural gas as an “exciting” and “promising” alternative to oil. Back on March 25, shares of Clean Energy Fuels (Nasdaq: CLNE) spiked 10.4%, or $1.23, to $13.10, at the close after Pickens said in a television interview that the natural gas company was one of his top holdings (he also happens to be co-founder and largest shareholder of the company).

The press release said:

DALLAS–(BUSINESS WIRE)–Legendary oilman T. Boone Pickens weighed in on the United States’ energy situation during a recent webcast hosted in part by NeoFirma, the leader in well information management services for the energy industry. Mr. Pickens also offered insight into what the future of transportation fuel can and should be.

“The United States’ oil production peaked at 10 million barrels a day during the 1970s,” says Pickens. “Today we’re producing half of that with absolutely no hope of increasing production. Even if we opened up the entire country and looked for it, it’s just not there.”

That statistic, coupled with the nearly six billion dollars being spent each year to import oil, led Mr. Pickens to provide a grim assessment of today’s economic situation. “This is the greatest transfer of wealth from one area to another in the history of mankind, and this country just can’t stand it. But there are ways to make a dent in our dependence on foreign oil.”

He cites using our own country’s abundance of natural resources – natural gas in particular – to reduce the import of foreign oil by as much as 30 percent. Specifically, using natural gas as a transportation fuel will not only decrease the country’s foreign dependencies, but will also make great strides towards cleaning up the environment.

“Natural gas is a cleaner fuel source and North America has an abundance of supply to tap into,” says Pickens. “Just look at what’s occurring with shale development throughout the country. It’s real and it’s happening everywhere – from Northeast British Columbia to the Barnett Shale in Texas; from the Appalachian Basin to the Fayetteville Shale in Alabama. In today’s business and economic environment, natural gas is much more exciting and promising than oil. It is the premium fossil fuel.”

Mr. Pickens made these comments during his webcast interview with the Southern Gas Association on March 28, 2008. To view the program in its entirety, visit here. The interview was co-sponsored by NeoFirma.

From prospecting and exploration through operations, NeoFirma provides natural gas producers and service providers the ability to create improved value through its web-based information services. NeoFirma’s services create performance reports and graphs to manage every point of the well’s life cycle – assisting clients in the business decision process with the right information, at the right time, and at the right place.

For more information, visit www.neofirma.com.

Contacts
NeoFirma
Terry P. Whitcher, 214-233-7111
ext. 101
twhitcher@neofirma.com

Source:

“Boone Pickens’ Energy Forecast: Natural Gas is the Transportation Fuel for Tomorrow”
BusinessWire, April 3, 2008

Legendary oil investor T. Boone Pickens, Jr., appeared on CNBC yesterday and said that, contrary to some statements he made a few weeks ago, he sees the price of oil holding around and above $100 a barrel for the rest of 2008 (Three videos can be accessed from CNBC’s website here). Pickens said:

I thought oil in the second quarter could come off $10, but I don’t think that’s going to happen. In the second half, you’re going to see oil above $100.

The founder of Mesa Petroleum added:

Demand is off, but supply is still 85 million barrels a day, globally. You’ve got the Chinese and other markets around the world that want the oil, need the oil, and demand’s going up and you’re still capped off at 85 million supply.

Reuters’ New York Energy Desk wrote yesterday:

Pickens said global energy demand growth remained strong despite a U.S. economic slowdown and that energy companies were having a hard time finding and developing new reserves.

“The major oil companies have peaked on their production. It’s awful hard for them to add to their reserves and their production,” he said. “The major oil companies are in liquidation.”

In addition, they noted that OPEC will be quick to defend the high prices:

He added that OPEC producers, who have declined to raise production despite calls from consumer nations for more supply, were also likely to defend high prices.

“Look at the producer countries. They have all kinds of reasons to keep the price up and they’re going to keep the price up,” he said.

And what does the “Oracle of Oil” think about those calling for a return to cheap oil in the future? According to Reuters:

Pickens said that it would take a much deeper economic downturn to pull prices back down to some of the lows around $50 a barrel seen early in 2007.

“The only way I could see that happen is a global recession… a serious global recession,” he said. “I don’t believe I will ever see $50 oil ever again.”

He also warned against the energy policies of the U.S. presidential candidates, saying they were ignorant of the issue.

During his appearance on CNBC yesterday, the well-known oilman also talked about the subject of alternative energy. He said:

We’re spending about $1.5 billion a day — $500 to $600 billion a year — on imported oil. That’s four times the cost of the Iraqi war. We can’t continue to do that. In 10 years you will have transferred wealth from the United States to the producing countries of about $5 or $6 trillion. That won’t work. I’m not sure what it’s going to do to us to remove that much wealth out of this country. We have got to get on alternative fuels in the United States. That’s all there is to it.

Photo by Johan Bolhuis
Source: stock.xchng

CNBC’s Andrew Fisher wrote:

Pickens says he’s bullish on natural gas as well as oil, and he has a portfolio to prove it.

“My… picks for natural gas would be Chesapeake, Exco, Sandridge, and, if you’re going to play the natural-gas fueling deal, you’d go to Clean Energy Fuels on the Nasdaq,” he said. “If you’re going to play oil, on the domestics, I would say that Continental Resources and Denbury are the two best, plus Suncor, the Canadian oil-sands one. Those are all in my portfolio.”

Carl Gutierrez, writing for Forbes’ Market Scan, reported yesterday that shares of Clean Energy Fuels Corp. spiked 9.8%, or $1.16, to $13.03, in late-afternoon trading after Pickens’ statement. Pickens, Gutierrez notes, is the co-founder and largest shareholder of the company. According to Ronald Oster of Broadpoint Capital, “Boone has a pretty good track record. People were laughing when he was calling for $100 oil way back when, and this is the alternative energy stock that’s he’s chosen, so it lends it a lot of credibility.”

Another alternative energy that T. Boone Pickens is bullish on is wind power. According to CNBC yesterday, he’s investing $10 billion in a major wind-power deal. CNBC’s Lee Brodie wrote in the Fast Money Rapid Recap yesterday:

Earlier on CNBC, Pickens told Dylan Ratigan, “We’re working seriously on a wind deal that will be 4,000 megawatts… 4,000 megawatts is gonna cost us about $10 billion dollars, so I’m committing a lot of capital to it.”

Pickens also said, “You’ve got an unbelievable wind corridor from Sweetwater, Texas to the Canadian border, and that could be – you could do it, a lot of that 150,000 megawatts in that corridor.”

The “Fast Money” video clip can be accessed from CNBC’s website here.

Sources:

“Pickens: Oil Going to Remain Above $100 a Barrel”
Andrew Fisher
CNBC, March 25, 2008

“Pickens sees $100 oil through 2008”
New York Energy Desk
Reuters, March 25, 2008

“Market Scan: Boone Pickens Picks Clean Energy”
Carl Gutierrez
Forbes, March 25, 2008

“Fast Money Rapid Recap: T. Boone’s Energy Plan”
Lee Brodie
CNBC, March 25, 2008

Bloomberg reported yesterday that legendary oil investor T. Boone Pickens’s BP Capital Energy Equity Fund fell 14% in the first two months of 2008. Pickens, the founder and chairman of Dallas-based BP Capital LLC, told CNBC back on February 21 that he was shorting both crude oil and natural gas. He said at the time:

Oil is going to back off here in the second quarter. It’ll be back above $100 in the second half.

Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts, told Bloomberg:

He’s just a little premature, maybe. I think he’s right. The market is soaring to unprecedented heights on wings of whimsy…

Boone Pickens is not good at calling the long-term market, but he’s got a pretty good head for the short-term.

Some of Pickens’s successful calls include hedging production at his Mesa Petroleum in the mid-1980s before prices collapsed, and taking a short position on natural gas after Hurricane Katrina in 2005.

Bloomberg’s Margot Habiby said that about 90% of BP Capital’s assets are in energy-company stocks, while the remaining 10% are in oil and gas commodities. BP Capital’s biggest equity holdings at the end of 2007 were in Suncor Energy Inc., Exxon Mobil Corp., and Occidental Petroleum Corp., according to a regulatory filing.

Source:

“Pickens’s BP Capital Energy Fund Fell 14% This Year (Update 4)”
Margot Habiby
Bloomberg, March 11, 2008

Welcome to Investorazzi.com, a new financial weblog that tracks the investment activities of the world’s greatest investors. At the present time, the list of legendary investors includes:

• Tom Barrack, “The World’s Greatest Real Estate Investor”
• Warren Buffett, “The Oracle of Omaha”
• Jeremy Grantham
• Bill Gross, “The King of Bonds”
• Eddie Lampert, “The Next Warren Buffett”
• T. Boone Pickens, Jr., “The Oracle of Oil”
• Jim Rogers
• George Soros, “The Man Who Broke the Bank of England”

See “The Investors” page for more information about these investment legends.

My name is Christopher E. Hill, and I am the creator and editor of this blog. As an independent financial research analyst based out of Chicago, Illinois, I came up with the idea for Investorazzi.com during the 2007 holiday season. Using the Internet and other resources, I will attempt to shadow these legendary investors, much like the dreaded paparazzi and their celebrity targets. Which is, by the way, how the weblog got its name.

The word “paparazzi” is derived from a character in the Fellini film La Dolce Vita. The character, a photographer named Paparazzo, reminded Fellini of “a buzzing insect, hovering, darting, stinging.”

-Source: Howstuffworks

As the creator and editor of Boom2Bust.com, “The Most Hated Blog On Wall Street,” I’ve had prior blogging experience. Boom2Bust is an independent financial blog that seeks to warn and educate readers about a coming U.S. financial crash. Making its debut over the 2007 Memorial Day Weekend, material from Boom2Bust appears regularly on Reuters.com (over 100 posts) and has featured in the online editions of the Wall Street Journal, Fox Business, Chicago Sun-Times, West Orlando News, and Palm Beach Post.

I hope you enjoy reading Investorazzi.com. Please do not hesitate to contact me with any suggestions for improving this blog.

Sincerely,

Christopher E. Hill
Editor
editor(AT)investorazzi(DOT)com