21 October 2007The Columbus DispatchJohn Porretto
Legendary Texas oilman and billionaire T. Boone Pickens sees the price of oil hitting $100 a barrel perhaps as soon as the fourth quarter but certainly sometime next year, a consequence of daily global production reaching its peak.
The 79-year-old former wildcatter, who now leads the Dallas-based hedge fund BP Capital Management LP, said Friday that he has no doubt worldwide demand has topped the current global output of roughly 85 million barrels a day.
"I think you'll reach $100
(a barrel) before you go back to $80," Pickens said before speaking at a gathering of the Association for the Study of Peak Oil and Gas at a downtown hotel. "It could happen in the fourth quarter, but you'll see it within a year."
Crude prices have climbed 28 percent since late August, passing $90 a barrel for the first time in overnight trading Thursday.
Pickens is credited with a history of prescient predictions about the direction of oil markets, and his bets have paid off handsomely. BP Capital, which focuses on energy-related investments, began a decade ago with $125 million and now manages about $4.5 billion.
Still, many industry and government analysts are far less pessimistic about the prospects for the global-oil supply than Pickens. Experts disagree about when daily oil output will reach its maximum level -- or whether it has done so already. The federal Government Accountability Office reported in March that most studies have found oil production will reach a peak sometime between now and 2040.
Rising demand will be met by higher prices rather than ever-larger crude production, Pickens said. "Any alternative fuel has a chance," he said, although he's betting big on wind.
In June, Pickens announced plans to build the world's largest wind farm in western Texas. He said the gradual switch from fossil fuels to alternative energy sources is going to require a fundamental change in the world, "and it will impact lifestyle."
As for his wind project, which could cost as much as $6 billion, Pickens hopes to have it running in eight years.
Pickens started his career in the 1950s as a petroleum geologist and shaped his reputation in the following decades as the founder of Mesa Petroleum Co.
