Washington (Platts)--8Jul2008

Legendary oilman T. Boone Pickens, saying the US' dependence on imported
oil has reached the level of a national crisis, Tuesday unveiled a plan he
said will cut imports by a third within five to 10 years.

To reach this goal, he proposed backing out natural gas-fired generation
with renewable resources and using gas to displace oil as transportation fuel.

Pickens said he will fund an "aggressive" multimedia advertising and
Internet education campaign that will push the need for investment in domestic
renewable energy resources such as wind and use of the US' "abundant" supplies
of natural gas as a transportation fuel.

Pickens said the US spends about $700 billion annually on its oil
imports, noting that figure could be cut by at least one-third, with
investment in domestic renewables. He said his plan -- dubbed "The Pickens
Plan" -- can be accomplished within a decade or less.

Pickens called on the next president and Congress to take action within
the first 100 days of the new administration to make his plan a reality.

His plan calls for private industry to fund the installation of
"thousands" of wind turbines that would generate enough power to provide 20%
or more of the US' electricity supply.

Private sector funds would then pay for transmission lines that would
carry the electricity generated by the wind turbines to load centers in the
eastern and western US. Pickens added that the US government would need to
ensure the lines can be built under a program modeled on the Eisenhower
administration's effort to build a national interstate highway system.

By using renewable energy sources to back out natural gas that is now
used to meet about 22% of US power demand, Pickens said his plan would free
gas to be used as transportation fuel, cutting US oil imports by up to 38%.

"Today, the US imports a quarter of the world's oil production with just
4% of the world's population and just 3% of the world's reserves," Pickens
added. "This is not sustainable, certainly not at today's prices."

Pickens said the US has "plenty of natural gas" to fulfill his plan,
adding that the country has in recent years doubled its reserves because of
its ability to tap previously unobtainable gas from shale formations. He said
gas reserves in the Marcellus and Haynesville shales will exceed those in the
prolific Barnett Shale in Texas.

"It's divine intervention for us to show up with these kinds of resources
at such a critical time for our country," he said.

Pickens also said opening all of the US Outer Continental Shelf to energy
development -- something he does not oppose -- will not solve the problem. He
said that while some government forecasts suggest that 86 billion barrels of
oil may be recoverable off the east and west US coasts, such a total is
unlikely.

The US Gulf of Mexico, he added, has "far superior geology" to either the
east or west coast OCS and it has only produced 40 billion barrels of oil over
the last 60 years.

While he was unable to say how much oil prices would fall if his plan
were adopted and the US were able to cut its imports by 38%, he said he
believes prices would come down "substantially" from $140/barrel. But, he
added, that "I don't think you'll ever see oil much below $100/barrel."

And while Pickens acknowledged that his plan would lead to higher natural
gas prices, he said that given 1 Mcf of natural gas has the energy equivalent
of 8 gallons of gasoline, natural gas prices would have to exceed $32/Mcf to
be more expensive than gasoline, something he does not expect to happen.