Apr 24 - McClatchy-Tribune Regional News - Jack Money The Oklahoman

Boone Pickens said in Oklahoma City on Wednesday that the nation never will become energy independent because it imports more than 70 percent of the petroleum it needs today.

And more than 70 percent of that goes into transportation, he noted.

"The only fuel that can help when it comes to transportation is natural gas," he said.

Pickens also said the nation could reduce its dependence on imported oil by 38 percent if it used natural gas to power cars and trucks instead of generating electricity.

Part of that plan would involve developing solar and wind power, and generating more power using nuclear plants, he said.

"If wind plays a bigger part, and you bring solar on, and you take natural gas being used in electricity generation and move it to transportation, then you reduce the imports we need by 38 percent," Pickens said. "That is huge. There hasn't been anyone yet who's come up with a similar plan."

Pickens also talked about how oil prices eventually could climb as high as $150 a barrel before significant demand reductions cool the market.

Natural gas prices approaching $18 per thousand cubic feet could be a reality soon, too, unless the nation experiences a mild winter, he said.

Pickens said prices are being driven strictly by supply and demand, and not by speculators using the market to hedge their investments against a weakening dollar.

He said the U.S. uses about 25 percent of the 85 million barrels of oil that are produced each day in the world, but needs to rely more on renewable powers.

"You are not going to be able to get away from oil, natural gas and diesel. That is going to be going on for some time. But you can relieve the pressure" on those resources, he said.

Wind power alone could meet the nation's future electricity power needs in the next 10 years, Pickens added.

"As natural gas goes up in price, it will make wind even more attractive," he said, noting that electricity from wind could be generated at a fourth of the cost of nuclear-powered electricity. "This is a huge business that is going to happen. There is no question."

Pickens, a Holdenville native who is founder and chairman of BP Capital, talked about those issues and others with Burns Hargis, president of Oklahoma State University, during OSU's annual energy conference in Oklahoma City on Wednesday.

The two discussed the issues in a conversational setting on a stage before hundreds of audience members at the Cox Convention Center downtown.

Hargis started off the discussion by noting that Pickens would be headed to the White House soon to visit with President Bush about the nation's energy problems.

"What are you going to tell him?" Hargis asked.

Pickens said he planned to talk to Bush about how the nation is sending $600 billion a year overseas to other countries to buy oil, and that many of those countries don't like the U.S.

He added, "I think it will become a huge issue as we get into the general election."

Hargis asked Pickens whether subsidies should be offered to encourage use of renewable energy such as wind, or, whether high fuel prices would prompt the market to make a switch on its own.

His answer was that some of both would be factors.

"You have got to get natural gas over to being used as a transportation fuel," Pickens said. "It is a domestic source, and it is cheaper and cleaner, and it can replace the use of gasoline and diesel."

He added that government could help. In California, cars fueled by natural gas can use high occupancy vehicle lanes, saving their drivers and passengers time.

Hargis also visited with Pickens about where he thought oil and natural gas prices were headed.

Pickens said he believed Saudi Arabia is producing all the usable oil it can, and that Russia is, too.

"At some time in the future, they are going to tell us they are going to charge us the same they are today for oil, but will only give us half as much because our appetite is so huge."

Representatives of local oil and natural gas companies had little to say about Pickens' price predictions.

"We welcome all opinions but never get to too vocal about our opinion," said Dirk Van Doren, SandRidge Energy's chief financial officer.

Chesapeake Energy officials said natural gas today would be getting $18 if it were priced based strictly on a British thermal units comparison to the energy contained within a barrel of oil.

Chip Minty, a spokesman for Devon Energy, said it is difficult to predict what oil prices will do in the long-term because of the many variables in play, such as the strength of the U.S. dollar, shifting geopolitical environments in oil-producing regions, weather events and the margin between world oil supply and world oil demand.

As always, weather is a key factor in the U.S. natural gas market, he added.

"One thing we know we can count on is that the oil and natural gas markets will remain volatile," Minty said.

After the event, Pickens reiterated to reporters that using natural gas to fuel vehicles is the way to go.

"That will work," he said. "Absolutely, it is viable. There are 7 million cars and trucks on natural gas today, and we only have 150,000 in the U.S. And what does that tell you? We are behind."