T Boone Pickens on the future of Oil..... - Printable Version
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T Boone Pickens on the future of Oil..... - Anhil8tor - 07-13-2010
Why hasn't the BP spill pushed oil prices higher?
A lot of oil is gushing from the blowout, but it wasn't in the system to begin with, so it's not like we're losing supply. But prices could go higher. Goldman Sachs (GS, Fortune 500) and Morgan Stanley (MS, Fortune 500) are both predicting that oil [about $77 a barrel as of late June] will hit $100 next year, and you know that will force equities to move higher too. I think that's a realistic projection because supply is capped at about 85 million barrels a day, and if we have any sort of global recovery, the only way to control the demand will be through price.
I would also mention the moratorium on drilling -- whether or not it holds. Gulf of Mexico production isn't that significant in the overall picture, but it matters at the margins, and every 100,000 barrels of oil or so affects the market. We had 34 rigs operating in the deep water, producing about 1.4 million out of the Gulf of Mexico's daily 1.7 million barrels of oil.
Because it's so complicated to stop and start production, a six-month ban will probably be more like 12 to 18 months. Even after we restart the wells, their capacity to produce will have declined by 25% to 35% over that time. This will also eventually move prices.
Will the spill renew excitement about alternative energy?
It's important to understand that oil and renewables do different things. Wind and solar are for power generation, so they don't replace oil. About 70% of all oil produced is used for transportation fuel. Renewables are good projects, but they don't get us off of foreign oil. That's why I think natural gas will replace oil. It's cleaner, it's cheaper, it's abundant, and it's ours. We believe natural gas will become part of the transportation fuel mix and be used for power generation. It won't happen overnight, but it will happen over time.
T Boone Pickens on the future of Oil..... - BIRD33 - 07-13-2010
[video=youtube;_Y_KLUQJZD0]http://www.youtube.com/watch?v=_Y_KLUQJZD0&feature=player_embedded[/video]
T Boone Pickens on the future of Oil..... - Flumper Barflusterbutt - 07-13-2010
The only problem with natural gas is transporting it. I think you have to transport natural gas by pipleline and no other way. I know they have been drilling the Fort Worth area for several years now, huge natural gas reserve here. but there are fucking gas transmission lines going in everywhere.