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Pickens: Expect $70 Per Barrel Oil in 2007

2 min read

T. Boone Pickens on Monday said to expect oil averaging $70 per barrel in 2007, as producers in the Middle East cut back on an oversupply that has allowed lower prices in the latter half of the year.
The Texas oilman, entrepreneur and philanthropist was the featured speaker at the Little Rock Regional Chamber of Commerce’s 140th annual meeting at the Statehouse Convention Center in Little Rock. In a conversation in front of the group with friend and business associate Joe Ford, chairman of Alltel Corp. of Little Rock, Pickens talked about oil prices and alternative fuels and dispensed advice to young professionals just getting started in the business world.
Pickens, responding to questions about who controls the world’s oil prices, noted that the Organization of Petroleum Exporting Countries would be meeting soon and would likely cut back on supply, thereby raising prices. He noted that bringing the United States’ oil executives to Washington, D.C., for congressional hearings on price control strikes him as a “waste of time,” considering U.S. oil companies only produce a fraction of the world’s supply. Countries such as Saudi Arabia, he said, “drive the train.”
Pickens said the country will have to increase its use of alternative fuels. Biofuels, coal-to-liquid processes and wind will all work, although he noted that ethanol based on corn will be less successful, since the process must be subsidized. He said it will take about five years for alternative fuels to make any noticeable mark on energy usage.
Pickens said that if he were appointed the nation’s energy czar, he would invest in biofuels immediately, encourage hybrid automobiles and ask Congress to force U.S. automakers to get more miles per gallon out of automobiles. He also said he would move natural gas away from being a source of energy production and into the realm of fuel for transportation.
The 78-year-old also had advice for young professionals: “Play hard.” He said people who plan to work hard in their profession can usually meet the goals they have.
“I can’t believe the opportunity that exists,” he said.
Pickens founded Mesa Petroleum Co. in 1956 with only $2,500 in capital. From 1956-96, when he was CEO, the company produced more than 3 trillion cubic feet of gas and 150 million barrels of oil.
Upon leaving Mesa in 1996, Boone founded BP Capital with $37 million. The company has more than $4 billion under management today.
A prominent philanthropist, his 2005 giving — $220 million in all — earned him the fifth spot on the Chronicle of Philanthropy’s list of top U.S. philanthropists.

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