Billionaire Energy Investor T. Boone Pickens spoke with FOX Business Network’s (FBN) Brian Sullivan about the energy sector, saying the price of oil will be “over 90” next year and that the Pickens Plan could be passed by the end of the year.
Excerpts from the interview are below:
**MANDATORY CREDIT: FOX BUSINESS NETWORK**
On the price of oil going over $90 next year:
“I think it will be 85 by the end of the year…You’ll be over 90 [next year].”
On the Pickens Plan:
“The Pickens Plan has a lot more in it than wind, so let me speak to the legislation first. On November 17th we’re going to have a procedural vote on the Pickens Plan in the Senate. November 17th, after the recess so that’s going to be interesting to see how that comes along.
On about to start four new wind projects:
“On the wind, no I haven’t abandoned the wind. In fact, I’m very close to starting four wind projects.”
On how President Obama “has done nothing” to curb the US’ dependence on foreign oil:
“Obama said exactly the same thing. He said in ten years we will not import any oil from the Mideast, OK. He’s done nothing. We’ve gone two years, no plan.”
On his advice for President Obama:
“If we could get the president to go back and say, “two years ago, I told you we would not import any oil in ten years from the Mideast and the first step to that, to solving that, will be all federal vehicles purchased in the future will be on domestic fuel. So, that opens up the battery, the hybrid. It opens up everything to play.”
On when the Pickens Plan will pass:
“The house ready to go. I’ve got 145 co-sponsors in the House. So, we’re ready. I mean, this will happen. This will happen…Washington is not easy. It is not easy. And so, I think that we could have it passed this year.”
On the need to get off foreign oil:
“That’s where the money is going out to the Taliban. See, I don’t like our people in Afghanistan. I’m not for that at all. I would not endanger one of our people in Afghanistan. Get the hell out of there and come home.”
On wind projects slowing down:
“They’ve already slowed down. You’re going to add this year probably about 10 or 20% of the megawatts that were built last year…You don’t’ have to slow wind down. It will slow itself down because you just can’t get the financing for it.”
On the impact of the Gulf oil spill on US off-shore drilling:
“Well dependence on foreign oil isn’t going to go down by drilling rigs moving back into the Gulf of Mexico. Will they come back? They’ll come back if the contract price is better here than where they are and so, answer, yes, they will come back at some point.”
Watch the video:
Link 1: http://video.foxbusiness.com/v/4362826
Link 2: http://video.foxbusiness.com/v/4362827
Link3 : http://video.foxbusiness.com/v/4362828
TRANSCRIPT:
BRIAN SULLIVAN, FBN CORRESPONDENT: Robert, thank you very much. That’s right. We are in Dallas. We are at the headquarters of BP Capital, better known maybe as Boone Pickens capital. We are in his office with the man himself. We're going to spend the next hour with Boone. We're going to talk about energy, oil, energy policies, maybe about gold, the dollar, the economy, and whatever else comes out of Boone Pickens’ mind.
We have been so generously invited into you -- literally into your office, Boone. Thanks very much for having FOX Business. Appreciate it.
T. BOONE PICKENS, CHAIRMAN, BP CAPITAL MANAGEMENT: I’ve looked forward to it, Brian. We always have good meetings.
SULLIVAN: Well say that after it is over because we've got a lot to talk about.
PICKENS: Good.
SULLIVAN: Let's get started. What is the status of the Pickens Plan? Are you abandoning wind?
PICKENS: No, you gave me -- Pickens Plan has a lot more in it than the wind. So Let me speak to the legislation first. On November 17th, we're going to have a procedural vote on the Pickens Plan in the Senate.
SULLIVAN: November 17th.
PICKENS: November 17th, after the recess. And, so that's going, that’s going to be interesting to see how that comes along.
On the wind, no, I haven't abandoned the wind. In fact, I'm very close to starting four wind projects. And so I left the wind deal that was in the panhandle of Texas -- the big one -- because we didn't get the transmission. So no --.
SULLIVAN: You just could not get the transmission?
PICKENS: Didn’t get it.
SULLIVAN: Why not?
PICKENS: Oh, it was --
SULLIVAN: State, local issues? Governments getting in the way?
PICKENS: They had too much wind in Texas already, that’s what happened. So they decided not to build a transmission to it. You laugh, but 6,000, we got I think 6,000 megawatts. And we don't need any more wind right now. So --
SULLIVAN: How do we not need more energy? We know from the Department of Energy America needs 30 percent more production of power in next 25 years just to not have blackouts?
How can we not have too much of anything?
PICKENS: Well, you do today. That’s 25 years. Between now and 25 years that project will be done. But you can't do it now. It’s just the transmission. They decided they didn't want to spend the money to build a transmission. And so -- but they will eventually, that’ll happen.
But you have one other big problem as far as wind's concerned. Wind is priced off the margin. The margin is natural gas and you have to have natural gas at about the $6 or higher to finance the wind. And you got natural gas at $4. So --
SULLIVAN: Or less.
PICKENS: Or less. And it’s going to hang around there for a while.
SULLIVAN: All right. Let's get back. November 17th, procedural vote in the Senate?
PICKENS: Yes.
SULLIVAN: Do you have the votes?
PICKENS: Oh, yes. We'll be OK.
SULLIVAN: What exactly are they going to be voting on?
PICKENS: They’ll be voting on two things in that bill. and it's, it's the majority leader, he is sponsoring the bill. But you’ll (AUDIO GAP) but you’ll -- on natural gas and you’ll have the electric vehicle and hybrid will get some help, too.
SULLIVAN: You think so?
PICKENS: Yes. But this is what you've got to do. You've got to go American. You've got to go to all-American and get off the oil you're buying from the enemy.
SULLIVAN: We have been hearing this, Boone, for a while, OK?
PICKENS: From me?
SULLIVAN: From you and from others, too. It’s not just you. It’s not just you.
PICKENS: No. You're dead duck if you're by yourself.
SULLIVAN: Well, that’s true. And I’ll tell you what, though, Congress has by itself not doing anything. What about a broader --
PICKENS: For only 40 years.
SULLIVAN: What about a broader energy plan? What about a broader energy bill? Up go to D.C. all the time. What the heck are they doing in Washington with regards to energy? Doesn't seem like a whole lot.
PICKENS: Well, this will get us started. And if you want to reduce, if you remember, Senator Obama at the time, which was his nomination speech in July of '08 said in 10 years we will -- if I'm president, in 10 years we will not import any oil from the Mideast. In the fourth debate, which was a month later, that Bob Schieffer had it, I had lunch with Schieffer the week before. And he said if you're going to ask a energy question, what would you ask? I said, ask these guys how long we're going to import oil from the enemy.
SULLIVAN: Yes. What’d they say?
PICKENS: OK. Well he said, no, no that’s a little raw. I can’t say that.
SULLIVAN: A little raw?
PICKENS: He can't say enemy. And Bob said about imports of foreign oil. Obama said exactly the same thing. He said in 10 years we will not import any oil from the Mideast. OK. He’s done nothing. We've gone two years, no plan.
SULLIVAN: So we’ve got eight years left, and by the way, we're going in the wrong direction, right? We're now importing 60 plus percent of our oil from overseas.
PICKENS: 67.
SULLIVAN: We were importing, I think, 24 percent in 1970. We have just gone up with our foreign oil imports. Now we've got eight years. Call me a skeptic, it doesn't sound like that's going to happen.
PICKENS: Well, we will fix it because we have plenty much natural gas. So you’ll start out with heavy-duty trucks. But at the same time, if we could get the president to go back and say that, two years ago, I told you we would not import any oil in 10 years from the Mideast. And the first step to solving that will be all federal vehicles purchased in the future will be on domestic fuel. So that gets -- opens up the battery, the hybrid. It opens up everything to play. Now, no, that only 18-wheelers can be moved, they can't be moved with a battery.
SULLIVAN: Yes, the battery doesn't have enough torque to pull the load. But they can be run by natural gas.
PICKENS: Exactly.
SULLIVAN: But where does the president stand now?
Two years ago, 10 years we're off foreign oil.
PICKENS: No, he didn’t say that, he said off of oil from the Mideast.
SULLIVAN: Off of oil from Mideast. Fair enough. Because there’s Canadian oil, Mexican, I understand that. Canada is actually the largest importer of oil to us.
But, where do we stand now, though, with the president? Have you had any communication with him, Senate leaders about what they're doing?
PICKENS: We've got this coming up for a vote on the 17th. Give me a chance. Give me just a little more time. I'm going to get it done. I’m going to get it done. I promise you I will. And we are going to have a plan for America. It’ll be a -- this will not be a total and comprehensive energy plan but it’ll be the first step to accomplishing that.
SULLIVAN: OK. Let's say you get the vote. Sounds like you're confident. You get procedural vote in the Senate, you pass that on the 17th. Then what? What are the next steps?
PICKENS: OK. We’ll get it out of the Senate and over to the House. The House is ready to go. I’ve got 145 co-sponsors in the House. So, we're ready. This will happen. This will happen.
SULLIVAN: When?
PICKENS: Well, I don't know.
SULLIVAN: Isn't that always the question in Washington, Boone, when?
PICKENS: I know but it's hard. Washington’s not easy. It is not easy. And so, I think that we could have it passed this year. It’ll be, of course, lame duck. But a lot of things have happened in a lame-duck session. But if it doesn’t, I’ll suit up next year and I’ll be right --
SULLIVAN: You’re going to keep going until you get it done.
PICKENS: I have to. I don't have any choice. This is a mission. And I spent $82 million working on this.
SULLIVAN: You're 82 million in?
PICKENS: That's right.
SULLIVAN: And you’re going to keep spending?
PICKENS: Hell yes. You can't get out of the pot now. You're in for the final draw.
SULLIVAN: What are the naysayers, right? You said you have 145 co-sponsors. Well, there’s a lot more Congress people than 145. What are people telling you why they might vote no? What do they say?
PICKENS: Nobody says that. You know why?
SULLIVAN: You're not getting 100 percent of the votes, yes? You’ve got to hear some skeptics. What do they say?
PICKENS: Well, you’re exactly right --
SULLIVAN: Are they environmental? They say, Boone, natural gas is destructive to the environment? What do they say?
PICKENS: OK. Give me -- just say that again.
SULLIVAN: Should I Pretend I'm in Congress.
PICKENS: Yes.
SULLIVAN: I’ve got blue jacket on.
PICKENS: Yes, you’re OK.
SULLIVAN: Mr. Pickens -- and I mean in all seriousness. I mean, this has been one of the complaints, right? I don't want to get technical, but the fracking (ph), the water issues. You know, natural gas, yes, we’ve got a lot of it, yes it’s in America, yes, it’s cheap, but it is harmful to the environment.
PICKENS: OK. Well, forget it then. Let’s just get more foreign oil. Let's get more oil from the enemy. We're paying for both sides of the war. You're buying oil from the Mideast, you're paying the Taliban. If you can't figure that one out you're not very smart.
SULLIVAN: There are people who say it. And I would presume they are relatively smart people.
PICKENS: Look at Jim Woolsey, April 9th, 2010, op-ed piece “Wall Street Journal.” Woolsey, you remember, is head of CIA.
SULLIVAN: Yes.
PICKENS: He makes it real clear of --
SULLIVAN: We were on the panel together at Milken (ph).
PICKENS: That’s right. And Woolsey knows. And I listen to Woolsey, he’s a smart guy. Another guy from Oklahoma.
SULLIVAN: I knew you had to drop the Oklahoma in there somewhere. The Oklahoma Hall of Fame wall over there. We'll get to that.
PICKENS: He didn't go to Oklahoma State, he went to Stanford.
SULLIVAN: We won't hold that against him.
PICKENS: No, it’s probably that he’s smarter than I is the reason why he went to Stanford.
SULLIVAN: Yes, but let's talk about that. I read the op-ed, right? Basically saying, what are we doing here? But nobody seems to, I mean, Saudi Arabia is touchy subject. Isn't it?
PICKENS: Not for me. I mean --
SULLIVAN: What do you think?
PICKENS: What I think what?
SULLIVAN: Do you consider Saudi Arabia an ally? We sell them military gear. We sell them planes.
PICKENS: Well, there were 18 of them on the two planes that hit the World Trade Center. You think that was an accident?
SULLIVAN: No. But that's what we're talking about then, right? We’re talking about --
PICKENS: I'm telling you --
SULLIVAN: All foreign oil -- or Middle Eastern oil we've got to get off it.
PICKENS: That’s where the money is going out to the Taliban.
SULLIVAN: All foreign oil -- or Middle Eastern oil, we've got to get off.
PICKENS: That is where the money is going out to the Taliban. Do you want it -- see, I don't -- I don't like our people in Afghanistan. I'm not for that at all. I would not endanger one of our people in Afghanistan. Get the hell out of there and come home. Get on your own resources, don't be dependent on foreign oil. Don't be dependent on oil from the Middle East.
I mean, get on your own, you know, it's time to sit on your own bottom and we haven't done that in a long, long time. No energy plan for 40 years. We just get deeper and deeper into the problem.
If we don't do anything more than what we've done for 40 years, roll out 10 years, 2020, you know where you are? You're importing 75 percent of your oil and you're paying $300 a barrel for it.
SULLIVAN: You know, I don't want to seem too cynical, I'm too young to be cynical, OK. But we talked about --
PICKENS: Well, but you're a journalists.
SULLIVAN: Well, that's true.
PICKENS: All journalists, you must have been trained to be cynical as a journalist.
SULLIVAN: I'm getting that way I guess. And when you read history, I was a kid in the '70s, but you read so many arguments in the '70s, you know, stories that are analogous to now -- we got to get off foreign oil, we need energy plan, cars are not fuel efficient enough. And I'm thinking, you know, we're talking about the same stuff now that Nixon and Ford and Carter --
PICKENS: Eight of them.
SULLIVAN: -- talked about in the '70s.
PICKENS: That's right. Everyone --
SULLIVAN: And nothing has happened.
PICKENS: Nothing. Now, it's -- now it's --
SULLIVAN: Cars today get less average fuel economy than 30 years ago because of all the SUVs, V8 engines, et cetera, right? So all vehicles together get less.
Why -- I mean, you've been around for awhile, right?
PICKENS: Eighty-two years.
(LAUGHTER)
SULLIVAN: I don't want to say it, Boone. I don't want -- you've been around for awhile, what the hell have we been doing?
PICKENS: We had cheap oil.
SULLIVAN: That's it? That's all it comes down to --
PICKENS: And the leadership --
SULLIVAN: -- people won't pay more at the gas pump?
PICKENS: Every guy that ran for president, back Nixon, Ford, elect me we'll be energy independent.
SULLIVAN: Yes.
PICKENS: And not a one of them did anything.
SULLIVAN: Republican, Democrat, doesn't matter, they've all said it.
PICKENS: This president has a chance to be the president can say, I'm the only president, Barack Obama, that has reduced foreign oil imports. He can do that if he wants to do it. He has the opportunity.
SULLIVAN: What kind of timeline would we be looking at if let's say your plan passes, gets through the House, we start to use natural gas more for transportation, right? How long would it take to roll out in a meaningful way to cut foreign oil imports? It's not going to happen in a year. How long would it take?
PICKENS: No, three years.
SULLIVAN: Three years?
PICKENS: Yes, we'll see it flatten out. We'll see --
SULLIVAN: How many cars then would we have to natural gas (INAUDIBLE)
(CROSSTALK)
PICKENS: But he's got to take another step. I mean, he told us that we would not import any oil from the Middle East in 10 years. Two years have passed, no plan.
Now, if he will come out and do an executive order to say that all federal vehicles purchased in the future will be on domestic fuel, that's all he has to do to get it started.
The second step he does, several months later, he goes to the American people and says, I promised you in 10 years we would not import any oil from the Middle East, now I'm going to have -- I'll show you the plan.
This is the plan, has nothing to do with Democrats or Republicans, it's all about America and it is all about us and this is the way it is going to go. You, Brian, and your family will decide in the next eight years the next time you buy a vehicle, it will have to be on domestic fuel. That's --
SULLIVAN: Could that be ethanol?
PICKENS: Ethanol?
SULLIVAN: Yes.
PICKENS: Sure. Sure.
SULLIVAN: Doesn't have to be natural gas?
PICKENS: Oh no, no, no.
SULLIVAN: Cause again, critics say your plan --
(CROSSTALK)
SULLIVAN: You know, we do live in a weird country. I think we're still capitalists right? And yet people, you read stories, comments that people write in about your plan, oh, Boone Pickens looking to profit off his own plan. Of course, you are. I got no problem with that.
PICKENS: I spent 82 million, so I mean if I was in it for money I wouldn't have spent the 82.
SULLIVAN: All right, we got a lot more to talk about. We're going to --
PICKENS: No, but wait a minute --
SULLIVAN: We got to go to commercial.
PICKENS: Don't leave --
SULLIVAN: We've got an hour together. We have whole hour. Well, now we've got about 44 minutes. So we'll take a break and we're going to come back.
PICKENS: You need to take -- do a commercial.
SULLIVAN: We've got to make our revenue.
PICKENS: OK.
SULLIVAN: We're going to go to commercial break. We're going to be back more with Boone. We'll talk further about energy, wind, natural gas, oil, gold, taxes. We have another billionaire here to join us. We got a lot to do. Don't go anywhere, we're back after this.
(COMMERCIAL BREAK)
SULLIVAN: All right, everybody, welcome back.
We are again here live with Boone Pickens for an entire hour. Just had pretty insightful discussion about energy policy, Boone saying, listen, November 17th, procedural vote in the Senate for his plan. He expects it to pass, go then to the House. We'll see if we can get something done in Washington, D.C. on the Pickens Plan, also just on energy plans in general.
Now we are in -- we were just in Boone's office. This is Boone's boardroom for the hedge funds where a lot of the decisions are made. You got some good channels. Look at that -- we can just sit here and watch ourselves, Boone, wouldn't that be interesting?
PICKENS: Can we do that?
SULLIVAN: Well we could, but it's probably delayed by a bit. All right, let's talk about --
PICKENS: You sure we're going to be on?
SULLIVAN: We're on right now.
PICKENS: I'm looking up there, we're not on.
SULLIVAN: Yes, there -- look at, there is my balding head.
PICKENS: Oh, I see.
SULLIVAN: I should sit down or something.
Anyway, let's get into discussions here. I got -- we got the -- let's talk a little bit more about wind. I like this. Clearly, this is not a life-sized model. How many of these are you going to buy?
PICKENS: Well --.
SULLIVAN: Not these, the real ones. Not the models.
PICKENS: About 200.
SULLIVAN: Where are they going to go?
PICKENS: They're going to go, this has not been announced, and --
SULLIVAN: You can announce right here?
PICKENS: Well, there are still a couple things to sign up.
SULLIVAN: But you are going to get wind turbines, a couple hundred?
PICKENS: Oh, there's no question.
SULLIVAN: Cause people say Boone's abandoned wind. We heard that.
PICKENS: No, no. I will get the turbines. If I don't have a place to put them -- one thing, my garage is not big enough to store them. So I start receiving them in the first quarter of next year.
Now the projects, the four projects we haven't announced yet, but we will within the next 30 days.
SULLIVAN: You will within the next 30 days?
PICKENS: Yes.
SULLIVAN: So we can expect something here in a month on wind?
PICKENS: Yes. Yes.
SULLIVAN: But you just told us that it is very hard to make wind profitable with natural gas prices below six bucks. We're below four bucks.
PICKENS: Well, these deals were made some time back and the -- I've got very good guys in the wind business. I mean, they have done an excellent job and all. And so, we're going to get --
SULLIVAN: You know, it's interesting too, the critics of wind will say, oh, we saw it off Cape Cod, right? Oh, they're ugly. We don't want these giant --
PICKENS: Well, don't put them there.
SULLIVAN: They will kill birds. But what's interesting, and you and I have spoken before, people that own land love these, right? Cause they get rich in turbine lease, don't they?
PICKENS: It's like having oil or gas wells on your property, there is a royalty paid and that's good.
SULLIVAN: So these, just from living in, say the spine of the country as you call it, windy areas, maybe Wyoming, north Dakota, all the way down --
PICKENS: No, it's from Texas to Canada.
SULLIVAN: You'll get people that can make a couple thousand dollars a month just from having turbines?
SULLIVAN: You’ll get people that can make a couple thousand dollars a month from just from having turbines?
PICKENS: $50,000 a year is what one of those turbines will do on royalty.
SULLIVAN: $50,000 a year just to have somebody install a turbine?
PICKENS: You can put five on section. A section is mile square, 640 acres. So, you know, it’s worth a lot of money to them. And they go ahead and farm around them. They're not in the way.
SULLIVAN: One thing good about wind is that, as we’ve talked about on FOX Business, the turbines have to be made in America because they're too big to ship. Do you believe though that natural gas --
PICKENS: No, that’s not right. Not right. They can ship.
SULLIVAN: Vestas is making them in Minnesota and Colorado. They’re huge, they’re expensive to ship, put it that way, prohibitively.
PICKENS: Right.
SULLIVAN: OK. So you do add some jobs building the turbines; But with nat-gas prices you say where they are, do you think we will see -- you sound like you’re going to go forward because you're already committed.
Do you think, though, that wind projects as a whole, not just yourself, other companies , will slow down because of where natural gas rises are?
PICKENS: It’s already slowed down. I mean, you’re going to add this year probably about 10 or 20 percent of the megawatts that were built last year.
SULLIVAN: But you know I'm a simple guy. I get confused easy. All I hear about is alternative energy, alternative energy, wind is the future, solar is the future. And now I'm hearing we’ve to slow wind down because natural gases prices are down.
PICKENS: You don't have to slow wind down, it’ll slow itself down because you just can’t get the financing for it. So you've got to have a better price for natural gas.
SULLIVAN: There’s no capital right now. If I wanted to go out and spend $200 million on a giant wind farm to power someplace in Oklahoma, right, because I know you like that state, I’ll throw it out there. I couldn't get financing for it today?
PICKENS: Unlikely. Odds would be very poor.
SULLIVAN: So what are we doing?
PICKENS: What are you doing?
SULLIVAN: Again we talked about getting off foreign oil and all I hear is, this can’t be done --
PICKENS: Wait a second, wait a second. Brian. Wait a second. Wind does not get you off foreign oil. Wind is not a transportation fuel.
SULLIVAN: I understand that. And there’s not a lot of oil-fired power plants. But, just I'm saying reduction of any type of that energy isn't going to be, it can be used someplace else?
PICKENS: Well, you're going to, you’ll add it into the overall grid. But look, go back, wind goes into power generation.
SULLIVAN: Yes. That’s what I mean. It’s nat-gas, coal.
PICKENS: 52 percent is coal-fired.
SULLIVAN: Still?
PICKENS: Oh, yes. 22 is natural gas. 20 is nuke. And, wind falls in miscellaneous and hydro. So it is insignificant. And it will be for a long time. It’s going to take a long time.
SULLIVAN: It’s not stopping you.
All right. We’ve got to take a break but guess what we did? I know you're on Twitter. Did you know you’re on Twitter? You’re on Twitter. We tweeted out --
PICKENS: Why’d you laugh at me because I’m on Twitter?
SULLIVAN: Because I saw you wrote back that you weren’t going to wear a tie. I thought that was funny. I appreciate it.
We’re going to ask your questions. We submitted -- you guys wrote in a bunch of questions. We picked five. We could only five, folks for Boon Pickens. Your questions for Boone coming up next. We're live in Dallas, with Boone Pickens himself.
Stick around
(COMMERCIAL BREAK)
SULLIVAN: Welcome back, everybody. Again, Brian Sullivan here with Boone Pickens for an hour.
We asked you to submit questions for Boone to our (INAUDIBLE) Business.com e-mail. And Boone has so graciously agreed to answer your questions.
And you have not seen these questions. I just tried to show them to you and you said, I don't want to see them. I’ve been asked everything.
PICKENS: That’s right. That’s exactly what I’ve said.
SULLIVAN: Well, we’ll see if we can stump you.
The first question comes from Kelly (ph), in San Antonia, Texas. Kelly says, because the moratorium on offshore drilling some rigs have moved to other countries. Will they come back after the moratorium is lifted and how do you think this will this impact our dependence on foreign oil?
PICKENS: Dependence on foreign oil isn’t going to go down much by drilling rigs moving back into the Gulf of Mexico. Will they come back? They’ll come back if the contract price is better here than where they are. So, to answer, yes, they will come back at some point. But don't count on solving any oil import issues by drilling wells in the Gulf of Mexico.
SULLIVAN: What do you think of the moratorium? That’s my question.
PICKENS: Well, you’ve had two blowouts in 50 years. One in Santa Barbara, one in the Gulf of Mexico. I wouldn’t have had any moratorium.
SULLIVAN: Overreaction?
PICKENS: Overreaction.
SULLIVAN: Bad for jobs?
PICKENS: Bad for jobs. If you go back and look at what I said, I’m on the record on that. It won't be as bad as everyone says is. The well will be killed. I told President Clinton that -- he even suggested that you set off a nuclear device on the floor of the Gulf. I have to laugh. I said, this has to be the craziest idea I’ve heard of.
SULLIVAN: People were talking about it for a while. Some Russian scientists saying you got to blow it up with a nuke.
PICKENS: I know. You can get all kinds of answers to things like that.
SULLIVAN: All right. This goes kind of to our first discussion, Boone. It comes from Dave. No town given. Please, give your town name. We like to reference that.
Your idea of converting 18 wheelers to natural gas makes a lot of sense. I can’t believe anybody wouldn’t support it. Can you explain why this idea has not gotten further off the ground?
PICKENS: Well, your leadership has not fully understood the problem we that face in America -- importing 67 percent of oil. And 40 percent of it comes from areas that our State Department recommends we not visit. Does that sound like those are friendly places? Well, of course not. So, the leadership, when they take us in the direction -- I’m trying to provide some leadership here. I’ve spent a lot of time doing it. I know the subject. I know what I’m talking about. And we’ve got --
SULLIVAN: You don't need votes.
PICKENS: That’s right. I’m not running for election.
SULLIVAN: This comes from Mimi (ph) in Atlanta.
Why don't we hear more about solar energy projects for residential and commercial applications? Solar energy technology is available. Won't it create jobs?
In other words, I know the president is putting solar panels on the White House. Do you have a view on solar Boone, as an investment opportunity?
PICKENS: Do it. It’s American. I'm for anything that’s American.
SULLIVAN: That’s not entirely true. We’ve seen solar farms -- and this ticks me off a bit -- made with Chinese-made photovoltaic cells.
PICKENS: Well, I mean, yes --
SULLIVAN: You know what I mean?
PICKENS: Sure. And I have said don't trade Saudi oil for Chinese battery. That’s not very smart. But we can do all that in America and we have the natural resources to replace the oil.
Now, when somebody says, why don't we do solar? Well, that’s fine but you’ve got to understand what these different resources do. Solar does not run a car.
Seventy percent of all the oil produced every day in the world goes to transportation fuel.
PICKENS: Seventy percent of all the oil produced every day in the world goes to transportation fuel. We do not run power generation on oil here; you do in the Mideast. So we have to have a better understanding of our resources and how we're going to use them.
SULLIVAN: All right, this is from Marie. She says, "Maybe the future of energy could be windmills or solar in the near term," right, part of the answer, "but is there any radical new technology that you see that we don't even talk about now that could help us?"
PICKENS: Oh, there's all kind of technology. You know, algae, biomass, everything else is out there. Once we understand what resources we have, then we'll sort out how we're going to use them.
But our leadership has never said, we're going to get on our resources. When our leadership tells us that in Washington, we are going to get on our own resources, then you create jobs, you cut off the billions of dollars a day you're spending for foreign oil and that money is at home, used and recirculated and everything.
I mean, it's so -- to me, it is very simple to see and what a simple conclusion is leadership has to say you're going to do it and then do it.
SULLIVAN: Well, we got to take another break. You have bought companies, you've built, you've created jobs, you've created wealth, you've lost some wealth. I want to talk to after the break about job creation, about our economic policies. Maybe about gold. Obviously, were the price of oil might be headed.
We're going to do all that stuff, folks, coming up as we continue our hour live at BP Capital with Boone Pickens. We are back on FOX BUSINESS right after this.
(COMMERCIAL BREAK)
(NEWS BREAK)
SULLIVAN: All right, Robert, thanks very much.
Well we're here with Boone Pickens and we happened to spring up another billionaire who is in the energy business, Kelcy Warren, chairman and CEO of Energy Transfer Partners and a record company as well, but we won't talk about that but I it's pretty interesting.
So yes, also on "Forbes 400 List", I feel very poor right now, but that's fine. Maybe we'll talk after the show's over.
All right, I want to talk about energy and natural gas. Kelcy, listen, Boone and I have talked about wind has been so tough because the price of nat gas comes down. Your company is a pipeline company, right?
KELCY WARREN, CHAIRMAN & CEO, ENERGY TRANSFER PARTNERS: Correct.
SULLIVAN: You transport natural gas all over the country. Why are nat gas prices so low?
WARREN: Well, we have an abundance of natural gas. We're covered up with it and will be for many, many decades.
SULLIVAN: So where do you think we're going to go then? Do you think we're going to stay four, five bucks in nat gas for the next few years? Cause to Boone's point, that could hurt some other projects that we've talked about.
WARREN: Well, first of all, the very best thing that ever happened to the nation that's in relation to natural gas prices is the fact that they went high and they stayed high for awhile. We developed technology that we would not have developed producing gas from all these shell plates (ph).
PICKENS: That's correct.
WARREN. We would not have done that. It would have never happened.
So we incented the producer, the independent like Mr. Pickens, the people that know what they're doing, we incented them to go explore, go discover. And they did and now we've got a market that's just -- we're covered up with natural gas.
SULLIVAN: Isn't that the quandary, though? I mean, that's the paradox, I guess, is that nat gas prices -- people like them because their heating bills go down, because of power plant costs, et cetera, but at the same time it then dissuades us from building out things like Boone's trying to work on.
WARREN: Absolutely. I mean, you know, it's funny how supply/demand still kind of works.
(LAUGHTER)
PICKENS: It's unusual, ain't it?
WARREN: It's a strange thing, isn't it, Boone?
PICKENS: Oversupply means cheap, undersupply means expensive.
WARREN: Exactly, exactly.
SULLIVAN: Well, I know you can't see it, I'm going to show a chart to our viewers, Boone, but I know it's in your head anyway, right?
So the price of oil where it is -- 82, 83 bucks -- and the price of natural gas have gone in different directions. Usually the spread is about 10 to 1, right?
PICKENS: Yes, that's -- that's down --
SULLIVAN: Now we're at -- what -- why is there such a huge gap between the price of oil and price of natural gas right now?
PICKENS: Cause, like Kelcy said --
(LAUGHTER)
PICKENS: -- we have too much natural gas, so the price goes down.
SULLIVAN: And not enough oil?
PICKENS: But you know, what a bargain for this country right now that there's no question natural gas is cleaner, right? Thirty percent cleaner than diesel.
SULLIVAN: OK.
PICKENS: OK. It's ours. It's abundant. And what I want to do is replace dirty porn.
SULLIVAN: And Kelcy would like to help you do that, I would imagine, with your company.
WARREN: Everyone in our industry applauds what Mr. Pickens is doing -- everyone -- but nobody seems to get it. You know, I routinely go to Washington D.C. and you get the correct nods at the correct time, but nothing ever really happens.
PICKENS: Look at this, one Mcf of natural gas is equal -- equal to -- to the same amount of work, it's the same amount of energy. One Mcf of natural gas equals seven gallons of diesel. One Mcf of natural gas is $4; seven gallons of diesel is $21.
SULLIVAN: That's it.
PICKENS: Diesel comes from the Mideast, $21, and we could replace it with four.
If we allow this opportunity to pass, you are going to get stuck more than I am and you are too because you are younger than I am, you're a lot younger than I am. Well you are, too. But anyway, you guys, you are going to get stuck with the dumbest crowd that ever showed up in town if you pass up the opportunity to use clean, abundant and cheap.
SULLIVAN: What would you like to see happen, Kelcy? Obviously, you're company, like we talked about, is in the pipeline for natural gas business, what do you think Washington is going to do?
WARREN: Well that is a wonderful question. Unfortunately, natural gas is a fossil fuel, we know that, and so therefore it gets coupled with all these other less-clean fuels that Mr. Pickens was referring to.
I applaud what Mr. Pickens has done on using compressed natural gas for vehicles.
WARREN: I applaud what Mr. Pickens has done using compressed natural gas for vehicles. I’ll tell you, when I was in college or even before that, my little home town -- we were required to use unleaded gasoline. We didn’t do it voluntarily. We were required to. And the reason we were required, first of all, they started putting these little, bitty nozzles in your car tanks. Someone in my little hometown figured out how to cut those out. So we tricked them.
But then later, you couldn't find anything but unleaded gasoline at the pump. The point being, the government got involved. The government got involved and they did the right thing. It improved our quality of life from an emissions standpoint. If we were to simply take that view and say this is right thing for this country, we’d have an abundance on this. Why are we relying on imported crude when we can be pretty much self-sustainable here?
SULLIVAN: Quickly I want to ask you something I asked Boone earlier. What do you say to the critics of natural gas that way, yes it’s here, but it’s environmentally destructive because of the fracking and the way that you get natural gas out of the ground? Because you know, people -- they do. The environmentalists say, yes it’s here, and it’s clean emissions but you hurt things to get it out?
WARREN: You know, without a more specific question, I’m not so sure I can address that other than maybe if it’s the treating of the water they’re referring to --
SULLIVAN: That’s it. Yes.
WARREN: -- the disposable water. Well, there’s many to treat the water. There’s many, many ways. You can dispose of the water in reservoirs, but you can also treat it. We’re in that business. We’re in the business of pipelining the water, rather than hauling it by trucks which tears up the highways and you have other consequences of that. We’re in the business of pipelining it to treatment plants, taking the effluent (ph), the treated water back for reusable water for fracturing. It can be done. It’s just a cost.
PICKENS: Well, let me comment about that.
SULLIVAN: Quickly.
PICKENS: OK. The largest aquifer in North America is Ogallala. It extends from Midland, Texas to South Dakota, across eight states. We’ve been drilling through that and down to producing zones that we fracked for over 50 years. I’ve never heard anybody complain about messing up the aquifer, yet I’m now hearing Pennsylvania, New York, hey, they’re messing up the aquifer.
SULLIVAN: Well it’s a loud minority.
Kelsey Warren. Hey, it was a real pleasure to meet you.
WARREN: Thank you.
SULLIVAN: Thank you very much for coming out. I should thank him, it’s his office.
(LAUGHTER)
WARREN: It’s a matter of being here, especially with Mr. Pickens.
SULLIVAN: All right. Cool. So we got a little more to go. We’re going to get your view on gold and the dollar coming up. All right.
We’re going to take a quick break here on FOX Business, try to bring people together. I don’t think they’d met before today. We’re back right after this short break.
(COMMERCIAL BREAK)
SULLIVAN: You know, it wouldn't be a day without Boone Pickens without a white board and a quiz. So we’re going to pop a quiz on Boone Pickens here. You’re not prepared for this. Let’s see if you can handle this, Boone.
PICKENS: I’m prepared for anything.
SULLIVAN: Here’s what I’m going to do. I’m going to write some numbers on the screen and I want you to tell me which ones are overpriced or underpriced. OK? So that’s the name of this game. Overpriced or underpriced.
First one, 82. And we’re talking, of course, about oil. We are talking about oil. Overpriced or underpriced right now?
PICKENS: That’s the market price.
SULLIVAN: Come on, don't give me that. Overpriced or underpriced?
PICKENS: Well, it’s going up.
SULLIVAN: How much?
PICKENS: You’ll be 85 by the end of the year.
SULLIVAN: 85 by the end of the year. So you think oil is underpriced. Fair enough? You think we’ll hit triple digits next year?
PICKENS: We could. You’ll be over 90. You’ll be over 90. That’s global recovery is what you’re at. And it’ll be led by the Chinese.
SULLIVAN: I better write this out so people know what I’m talking about. Underpriced. OK, so there you go. $82 oil is underpriced.
Let’s throw out another number. Call it 3.50 MCF, right?
PICKENS: NO.
SULLIVAN: B, it’s billion, right?
PICKENS: Yes. No. MCF, MCF.
SULLIVAN: I was right the first time.
(CROSSTALK)
SULLIVAN: I knew you were going to commandeer the white board, Boone.
PICKENS: Four dollars.
SULLIVAN: But it’s under four right now.
PICKENS: Slightly, but not much.
SULLIVAN: All right. So is that overpriced or underpriced?
PICKENS: It’s right on the mark.
SULLIVAN: I’ll write that. I want to feel like I’m contributing. This is on the mark. So you don’t think that that is too cheap?
PICKENS: No.
SULLIVAN: That’s the market price.
PICKENS: You can get all you want for four.
SULLIVAN: We’ll just call that equal, fair-priced. How about that? Fair-priced.
Here’s another number for you, Boone. 1,350. We’re talking about gold. Overpriced or underpriced?
PICKENS: Oh, man, I missed this one so bad. I almost put it on at 1,100. I mean, serious.
SULLIVAN: You almost put a serious gold trade on 11? How serious are we talking about?
PICKENS: Oh, I don’t know. I’d been rich. But anyway, I didn't do it.
SULLIVAN: Why not?
PICKENS: I was looking for a pull back. I didn’t get it. This, I would say is more likely to go up than down. But I’m not a gold expert. So I can’t tell you --
SULLIVAN: Yes, but you’ve got a team of traders that sit around this table --
PICKENS: No, no, no. They aren’t either.
SULLIVAN: You’ve got to talk about it. Everybody’s talking --
PICKENS: We don't talk about gold.
SULLIVAN: At all?
PICKENS: It doesn’t get five minutes a day.
SULLIVAN: Why not? Everybody else is talking about gold.
PICKENS: Well, maybe that’s why we’re different from everybody else.
SULLIVAN: Maybe you could figure out a way to make a gold powered car. Might be a little expensive.
PICKENS: You know what Jon Steward told me. He said, what if I told you mayonnaise would work in your Honda GX-Civic? I said, hell, I’d give her a try. Just so it’s American.
SULLIVAN: So we should by Miracle Whip? You’re long mayonnaise, short Miracle Whip. So gold, you think, if you had to make a bet, is underpriced. A little bit?
PICKENS: If I had to go buy or sell, I’d buy.
SULLIVAN: But you’re not buying gold.
PICKENS: No, I am not. This is got to -- this will have a pretty good adjustment in the next 12 months down. But I’m not ready to --
SULLIVAN: Well, you just said it’s underpriced but --
PICKENS: Now, today. But I say in a year’s time I think that it will be below 1,350.
SULLIVAN: In a year’s time so, OK, because you’ve got the momentum,. Gold has basically done this, right?
PICKENS: Yes.
SULLIVAN: So you think that gold is going to -- could do a little bit of this but then next year -- that?
PICKENS: I don’t think it falls like that, but yes, right.
SULLIVAN: OK. And then you might be a buyer.
Excerpts from the interview are below:
**MANDATORY CREDIT: FOX BUSINESS NETWORK**
On the price of oil going over $90 next year:
“I think it will be 85 by the end of the year…You’ll be over 90 [next year].”
On the Pickens Plan:
“The Pickens Plan has a lot more in it than wind, so let me speak to the legislation first. On November 17th we’re going to have a procedural vote on the Pickens Plan in the Senate. November 17th, after the recess so that’s going to be interesting to see how that comes along.
On about to start four new wind projects:
“On the wind, no I haven’t abandoned the wind. In fact, I’m very close to starting four wind projects.”
On how President Obama “has done nothing” to curb the US’ dependence on foreign oil:
“Obama said exactly the same thing. He said in ten years we will not import any oil from the Mideast, OK. He’s done nothing. We’ve gone two years, no plan.”
On his advice for President Obama:
“If we could get the president to go back and say, “two years ago, I told you we would not import any oil in ten years from the Mideast and the first step to that, to solving that, will be all federal vehicles purchased in the future will be on domestic fuel. So, that opens up the battery, the hybrid. It opens up everything to play.”
On when the Pickens Plan will pass:
“The house ready to go. I’ve got 145 co-sponsors in the House. So, we’re ready. I mean, this will happen. This will happen…Washington is not easy. It is not easy. And so, I think that we could have it passed this year.”
On the need to get off foreign oil:
“That’s where the money is going out to the Taliban. See, I don’t like our people in Afghanistan. I’m not for that at all. I would not endanger one of our people in Afghanistan. Get the hell out of there and come home.”
On wind projects slowing down:
“They’ve already slowed down. You’re going to add this year probably about 10 or 20% of the megawatts that were built last year…You don’t’ have to slow wind down. It will slow itself down because you just can’t get the financing for it.”
On the impact of the Gulf oil spill on US off-shore drilling:
“Well dependence on foreign oil isn’t going to go down by drilling rigs moving back into the Gulf of Mexico. Will they come back? They’ll come back if the contract price is better here than where they are and so, answer, yes, they will come back at some point.”
Watch the video:
Link 1: http://video.foxbusiness.com/v/4362826
Link 2: http://video.foxbusiness.com/v/4362827
Link3 : http://video.foxbusiness.com/v/4362828
TRANSCRIPT:
BRIAN SULLIVAN, FBN CORRESPONDENT: Robert, thank you very much. That’s right. We are in Dallas. We are at the headquarters of BP Capital, better known maybe as Boone Pickens capital. We are in his office with the man himself. We're going to spend the next hour with Boone. We're going to talk about energy, oil, energy policies, maybe about gold, the dollar, the economy, and whatever else comes out of Boone Pickens’ mind.
We have been so generously invited into you -- literally into your office, Boone. Thanks very much for having FOX Business. Appreciate it.
T. BOONE PICKENS, CHAIRMAN, BP CAPITAL MANAGEMENT: I’ve looked forward to it, Brian. We always have good meetings.
SULLIVAN: Well say that after it is over because we've got a lot to talk about.
PICKENS: Good.
SULLIVAN: Let's get started. What is the status of the Pickens Plan? Are you abandoning wind?
PICKENS: No, you gave me -- Pickens Plan has a lot more in it than the wind. So Let me speak to the legislation first. On November 17th, we're going to have a procedural vote on the Pickens Plan in the Senate.
SULLIVAN: November 17th.
PICKENS: November 17th, after the recess. And, so that's going, that’s going to be interesting to see how that comes along.
On the wind, no, I haven't abandoned the wind. In fact, I'm very close to starting four wind projects. And so I left the wind deal that was in the panhandle of Texas -- the big one -- because we didn't get the transmission. So no --.
SULLIVAN: You just could not get the transmission?
PICKENS: Didn’t get it.
SULLIVAN: Why not?
PICKENS: Oh, it was --
SULLIVAN: State, local issues? Governments getting in the way?
PICKENS: They had too much wind in Texas already, that’s what happened. So they decided not to build a transmission to it. You laugh, but 6,000, we got I think 6,000 megawatts. And we don't need any more wind right now. So --
SULLIVAN: How do we not need more energy? We know from the Department of Energy America needs 30 percent more production of power in next 25 years just to not have blackouts?
How can we not have too much of anything?
PICKENS: Well, you do today. That’s 25 years. Between now and 25 years that project will be done. But you can't do it now. It’s just the transmission. They decided they didn't want to spend the money to build a transmission. And so -- but they will eventually, that’ll happen.
But you have one other big problem as far as wind's concerned. Wind is priced off the margin. The margin is natural gas and you have to have natural gas at about the $6 or higher to finance the wind. And you got natural gas at $4. So --
SULLIVAN: Or less.
PICKENS: Or less. And it’s going to hang around there for a while.
SULLIVAN: All right. Let's get back. November 17th, procedural vote in the Senate?
PICKENS: Yes.
SULLIVAN: Do you have the votes?
PICKENS: Oh, yes. We'll be OK.
SULLIVAN: What exactly are they going to be voting on?
PICKENS: They’ll be voting on two things in that bill. and it's, it's the majority leader, he is sponsoring the bill. But you’ll (AUDIO GAP) but you’ll -- on natural gas and you’ll have the electric vehicle and hybrid will get some help, too.
SULLIVAN: You think so?
PICKENS: Yes. But this is what you've got to do. You've got to go American. You've got to go to all-American and get off the oil you're buying from the enemy.
SULLIVAN: We have been hearing this, Boone, for a while, OK?
PICKENS: From me?
SULLIVAN: From you and from others, too. It’s not just you. It’s not just you.
PICKENS: No. You're dead duck if you're by yourself.
SULLIVAN: Well, that’s true. And I’ll tell you what, though, Congress has by itself not doing anything. What about a broader --
PICKENS: For only 40 years.
SULLIVAN: What about a broader energy plan? What about a broader energy bill? Up go to D.C. all the time. What the heck are they doing in Washington with regards to energy? Doesn't seem like a whole lot.
PICKENS: Well, this will get us started. And if you want to reduce, if you remember, Senator Obama at the time, which was his nomination speech in July of '08 said in 10 years we will -- if I'm president, in 10 years we will not import any oil from the Mideast. In the fourth debate, which was a month later, that Bob Schieffer had it, I had lunch with Schieffer the week before. And he said if you're going to ask a energy question, what would you ask? I said, ask these guys how long we're going to import oil from the enemy.
SULLIVAN: Yes. What’d they say?
PICKENS: OK. Well he said, no, no that’s a little raw. I can’t say that.
SULLIVAN: A little raw?
PICKENS: He can't say enemy. And Bob said about imports of foreign oil. Obama said exactly the same thing. He said in 10 years we will not import any oil from the Mideast. OK. He’s done nothing. We've gone two years, no plan.
SULLIVAN: So we’ve got eight years left, and by the way, we're going in the wrong direction, right? We're now importing 60 plus percent of our oil from overseas.
PICKENS: 67.
SULLIVAN: We were importing, I think, 24 percent in 1970. We have just gone up with our foreign oil imports. Now we've got eight years. Call me a skeptic, it doesn't sound like that's going to happen.
PICKENS: Well, we will fix it because we have plenty much natural gas. So you’ll start out with heavy-duty trucks. But at the same time, if we could get the president to go back and say that, two years ago, I told you we would not import any oil in 10 years from the Mideast. And the first step to solving that will be all federal vehicles purchased in the future will be on domestic fuel. So that gets -- opens up the battery, the hybrid. It opens up everything to play. Now, no, that only 18-wheelers can be moved, they can't be moved with a battery.
SULLIVAN: Yes, the battery doesn't have enough torque to pull the load. But they can be run by natural gas.
PICKENS: Exactly.
SULLIVAN: But where does the president stand now?
Two years ago, 10 years we're off foreign oil.
PICKENS: No, he didn’t say that, he said off of oil from the Mideast.
SULLIVAN: Off of oil from Mideast. Fair enough. Because there’s Canadian oil, Mexican, I understand that. Canada is actually the largest importer of oil to us.
But, where do we stand now, though, with the president? Have you had any communication with him, Senate leaders about what they're doing?
PICKENS: We've got this coming up for a vote on the 17th. Give me a chance. Give me just a little more time. I'm going to get it done. I’m going to get it done. I promise you I will. And we are going to have a plan for America. It’ll be a -- this will not be a total and comprehensive energy plan but it’ll be the first step to accomplishing that.
SULLIVAN: OK. Let's say you get the vote. Sounds like you're confident. You get procedural vote in the Senate, you pass that on the 17th. Then what? What are the next steps?
PICKENS: OK. We’ll get it out of the Senate and over to the House. The House is ready to go. I’ve got 145 co-sponsors in the House. So, we're ready. This will happen. This will happen.
SULLIVAN: When?
PICKENS: Well, I don't know.
SULLIVAN: Isn't that always the question in Washington, Boone, when?
PICKENS: I know but it's hard. Washington’s not easy. It is not easy. And so, I think that we could have it passed this year. It’ll be, of course, lame duck. But a lot of things have happened in a lame-duck session. But if it doesn’t, I’ll suit up next year and I’ll be right --
SULLIVAN: You’re going to keep going until you get it done.
PICKENS: I have to. I don't have any choice. This is a mission. And I spent $82 million working on this.
SULLIVAN: You're 82 million in?
PICKENS: That's right.
SULLIVAN: And you’re going to keep spending?
PICKENS: Hell yes. You can't get out of the pot now. You're in for the final draw.
SULLIVAN: What are the naysayers, right? You said you have 145 co-sponsors. Well, there’s a lot more Congress people than 145. What are people telling you why they might vote no? What do they say?
PICKENS: Nobody says that. You know why?
SULLIVAN: You're not getting 100 percent of the votes, yes? You’ve got to hear some skeptics. What do they say?
PICKENS: Well, you’re exactly right --
SULLIVAN: Are they environmental? They say, Boone, natural gas is destructive to the environment? What do they say?
PICKENS: OK. Give me -- just say that again.
SULLIVAN: Should I Pretend I'm in Congress.
PICKENS: Yes.
SULLIVAN: I’ve got blue jacket on.
PICKENS: Yes, you’re OK.
SULLIVAN: Mr. Pickens -- and I mean in all seriousness. I mean, this has been one of the complaints, right? I don't want to get technical, but the fracking (ph), the water issues. You know, natural gas, yes, we’ve got a lot of it, yes it’s in America, yes, it’s cheap, but it is harmful to the environment.
PICKENS: OK. Well, forget it then. Let’s just get more foreign oil. Let's get more oil from the enemy. We're paying for both sides of the war. You're buying oil from the Mideast, you're paying the Taliban. If you can't figure that one out you're not very smart.
SULLIVAN: There are people who say it. And I would presume they are relatively smart people.
PICKENS: Look at Jim Woolsey, April 9th, 2010, op-ed piece “Wall Street Journal.” Woolsey, you remember, is head of CIA.
SULLIVAN: Yes.
PICKENS: He makes it real clear of --
SULLIVAN: We were on the panel together at Milken (ph).
PICKENS: That’s right. And Woolsey knows. And I listen to Woolsey, he’s a smart guy. Another guy from Oklahoma.
SULLIVAN: I knew you had to drop the Oklahoma in there somewhere. The Oklahoma Hall of Fame wall over there. We'll get to that.
PICKENS: He didn't go to Oklahoma State, he went to Stanford.
SULLIVAN: We won't hold that against him.
PICKENS: No, it’s probably that he’s smarter than I is the reason why he went to Stanford.
SULLIVAN: Yes, but let's talk about that. I read the op-ed, right? Basically saying, what are we doing here? But nobody seems to, I mean, Saudi Arabia is touchy subject. Isn't it?
PICKENS: Not for me. I mean --
SULLIVAN: What do you think?
PICKENS: What I think what?
SULLIVAN: Do you consider Saudi Arabia an ally? We sell them military gear. We sell them planes.
PICKENS: Well, there were 18 of them on the two planes that hit the World Trade Center. You think that was an accident?
SULLIVAN: No. But that's what we're talking about then, right? We’re talking about --
PICKENS: I'm telling you --
SULLIVAN: All foreign oil -- or Middle Eastern oil we've got to get off it.
PICKENS: That’s where the money is going out to the Taliban.
SULLIVAN: All foreign oil -- or Middle Eastern oil, we've got to get off.
PICKENS: That is where the money is going out to the Taliban. Do you want it -- see, I don't -- I don't like our people in Afghanistan. I'm not for that at all. I would not endanger one of our people in Afghanistan. Get the hell out of there and come home. Get on your own resources, don't be dependent on foreign oil. Don't be dependent on oil from the Middle East.
I mean, get on your own, you know, it's time to sit on your own bottom and we haven't done that in a long, long time. No energy plan for 40 years. We just get deeper and deeper into the problem.
If we don't do anything more than what we've done for 40 years, roll out 10 years, 2020, you know where you are? You're importing 75 percent of your oil and you're paying $300 a barrel for it.
SULLIVAN: You know, I don't want to seem too cynical, I'm too young to be cynical, OK. But we talked about --
PICKENS: Well, but you're a journalists.
SULLIVAN: Well, that's true.
PICKENS: All journalists, you must have been trained to be cynical as a journalist.
SULLIVAN: I'm getting that way I guess. And when you read history, I was a kid in the '70s, but you read so many arguments in the '70s, you know, stories that are analogous to now -- we got to get off foreign oil, we need energy plan, cars are not fuel efficient enough. And I'm thinking, you know, we're talking about the same stuff now that Nixon and Ford and Carter --
PICKENS: Eight of them.
SULLIVAN: -- talked about in the '70s.
PICKENS: That's right. Everyone --
SULLIVAN: And nothing has happened.
PICKENS: Nothing. Now, it's -- now it's --
SULLIVAN: Cars today get less average fuel economy than 30 years ago because of all the SUVs, V8 engines, et cetera, right? So all vehicles together get less.
Why -- I mean, you've been around for awhile, right?
PICKENS: Eighty-two years.
(LAUGHTER)
SULLIVAN: I don't want to say it, Boone. I don't want -- you've been around for awhile, what the hell have we been doing?
PICKENS: We had cheap oil.
SULLIVAN: That's it? That's all it comes down to --
PICKENS: And the leadership --
SULLIVAN: -- people won't pay more at the gas pump?
PICKENS: Every guy that ran for president, back Nixon, Ford, elect me we'll be energy independent.
SULLIVAN: Yes.
PICKENS: And not a one of them did anything.
SULLIVAN: Republican, Democrat, doesn't matter, they've all said it.
PICKENS: This president has a chance to be the president can say, I'm the only president, Barack Obama, that has reduced foreign oil imports. He can do that if he wants to do it. He has the opportunity.
SULLIVAN: What kind of timeline would we be looking at if let's say your plan passes, gets through the House, we start to use natural gas more for transportation, right? How long would it take to roll out in a meaningful way to cut foreign oil imports? It's not going to happen in a year. How long would it take?
PICKENS: No, three years.
SULLIVAN: Three years?
PICKENS: Yes, we'll see it flatten out. We'll see --
SULLIVAN: How many cars then would we have to natural gas (INAUDIBLE)
(CROSSTALK)
PICKENS: But he's got to take another step. I mean, he told us that we would not import any oil from the Middle East in 10 years. Two years have passed, no plan.
Now, if he will come out and do an executive order to say that all federal vehicles purchased in the future will be on domestic fuel, that's all he has to do to get it started.
The second step he does, several months later, he goes to the American people and says, I promised you in 10 years we would not import any oil from the Middle East, now I'm going to have -- I'll show you the plan.
This is the plan, has nothing to do with Democrats or Republicans, it's all about America and it is all about us and this is the way it is going to go. You, Brian, and your family will decide in the next eight years the next time you buy a vehicle, it will have to be on domestic fuel. That's --
SULLIVAN: Could that be ethanol?
PICKENS: Ethanol?
SULLIVAN: Yes.
PICKENS: Sure. Sure.
SULLIVAN: Doesn't have to be natural gas?
PICKENS: Oh no, no, no.
SULLIVAN: Cause again, critics say your plan --
(CROSSTALK)
SULLIVAN: You know, we do live in a weird country. I think we're still capitalists right? And yet people, you read stories, comments that people write in about your plan, oh, Boone Pickens looking to profit off his own plan. Of course, you are. I got no problem with that.
PICKENS: I spent 82 million, so I mean if I was in it for money I wouldn't have spent the 82.
SULLIVAN: All right, we got a lot more to talk about. We're going to --
PICKENS: No, but wait a minute --
SULLIVAN: We got to go to commercial.
PICKENS: Don't leave --
SULLIVAN: We've got an hour together. We have whole hour. Well, now we've got about 44 minutes. So we'll take a break and we're going to come back.
PICKENS: You need to take -- do a commercial.
SULLIVAN: We've got to make our revenue.
PICKENS: OK.
SULLIVAN: We're going to go to commercial break. We're going to be back more with Boone. We'll talk further about energy, wind, natural gas, oil, gold, taxes. We have another billionaire here to join us. We got a lot to do. Don't go anywhere, we're back after this.
(COMMERCIAL BREAK)
SULLIVAN: All right, everybody, welcome back.
We are again here live with Boone Pickens for an entire hour. Just had pretty insightful discussion about energy policy, Boone saying, listen, November 17th, procedural vote in the Senate for his plan. He expects it to pass, go then to the House. We'll see if we can get something done in Washington, D.C. on the Pickens Plan, also just on energy plans in general.
Now we are in -- we were just in Boone's office. This is Boone's boardroom for the hedge funds where a lot of the decisions are made. You got some good channels. Look at that -- we can just sit here and watch ourselves, Boone, wouldn't that be interesting?
PICKENS: Can we do that?
SULLIVAN: Well we could, but it's probably delayed by a bit. All right, let's talk about --
PICKENS: You sure we're going to be on?
SULLIVAN: We're on right now.
PICKENS: I'm looking up there, we're not on.
SULLIVAN: Yes, there -- look at, there is my balding head.
PICKENS: Oh, I see.
SULLIVAN: I should sit down or something.
Anyway, let's get into discussions here. I got -- we got the -- let's talk a little bit more about wind. I like this. Clearly, this is not a life-sized model. How many of these are you going to buy?
PICKENS: Well --.
SULLIVAN: Not these, the real ones. Not the models.
PICKENS: About 200.
SULLIVAN: Where are they going to go?
PICKENS: They're going to go, this has not been announced, and --
SULLIVAN: You can announce right here?
PICKENS: Well, there are still a couple things to sign up.
SULLIVAN: But you are going to get wind turbines, a couple hundred?
PICKENS: Oh, there's no question.
SULLIVAN: Cause people say Boone's abandoned wind. We heard that.
PICKENS: No, no. I will get the turbines. If I don't have a place to put them -- one thing, my garage is not big enough to store them. So I start receiving them in the first quarter of next year.
Now the projects, the four projects we haven't announced yet, but we will within the next 30 days.
SULLIVAN: You will within the next 30 days?
PICKENS: Yes.
SULLIVAN: So we can expect something here in a month on wind?
PICKENS: Yes. Yes.
SULLIVAN: But you just told us that it is very hard to make wind profitable with natural gas prices below six bucks. We're below four bucks.
PICKENS: Well, these deals were made some time back and the -- I've got very good guys in the wind business. I mean, they have done an excellent job and all. And so, we're going to get --
SULLIVAN: You know, it's interesting too, the critics of wind will say, oh, we saw it off Cape Cod, right? Oh, they're ugly. We don't want these giant --
PICKENS: Well, don't put them there.
SULLIVAN: They will kill birds. But what's interesting, and you and I have spoken before, people that own land love these, right? Cause they get rich in turbine lease, don't they?
PICKENS: It's like having oil or gas wells on your property, there is a royalty paid and that's good.
SULLIVAN: So these, just from living in, say the spine of the country as you call it, windy areas, maybe Wyoming, north Dakota, all the way down --
PICKENS: No, it's from Texas to Canada.
SULLIVAN: You'll get people that can make a couple thousand dollars a month just from having turbines?
SULLIVAN: You’ll get people that can make a couple thousand dollars a month from just from having turbines?
PICKENS: $50,000 a year is what one of those turbines will do on royalty.
SULLIVAN: $50,000 a year just to have somebody install a turbine?
PICKENS: You can put five on section. A section is mile square, 640 acres. So, you know, it’s worth a lot of money to them. And they go ahead and farm around them. They're not in the way.
SULLIVAN: One thing good about wind is that, as we’ve talked about on FOX Business, the turbines have to be made in America because they're too big to ship. Do you believe though that natural gas --
PICKENS: No, that’s not right. Not right. They can ship.
SULLIVAN: Vestas is making them in Minnesota and Colorado. They’re huge, they’re expensive to ship, put it that way, prohibitively.
PICKENS: Right.
SULLIVAN: OK. So you do add some jobs building the turbines; But with nat-gas prices you say where they are, do you think we will see -- you sound like you’re going to go forward because you're already committed.
Do you think, though, that wind projects as a whole, not just yourself, other companies , will slow down because of where natural gas rises are?
PICKENS: It’s already slowed down. I mean, you’re going to add this year probably about 10 or 20 percent of the megawatts that were built last year.
SULLIVAN: But you know I'm a simple guy. I get confused easy. All I hear about is alternative energy, alternative energy, wind is the future, solar is the future. And now I'm hearing we’ve to slow wind down because natural gases prices are down.
PICKENS: You don't have to slow wind down, it’ll slow itself down because you just can’t get the financing for it. So you've got to have a better price for natural gas.
SULLIVAN: There’s no capital right now. If I wanted to go out and spend $200 million on a giant wind farm to power someplace in Oklahoma, right, because I know you like that state, I’ll throw it out there. I couldn't get financing for it today?
PICKENS: Unlikely. Odds would be very poor.
SULLIVAN: So what are we doing?
PICKENS: What are you doing?
SULLIVAN: Again we talked about getting off foreign oil and all I hear is, this can’t be done --
PICKENS: Wait a second, wait a second. Brian. Wait a second. Wind does not get you off foreign oil. Wind is not a transportation fuel.
SULLIVAN: I understand that. And there’s not a lot of oil-fired power plants. But, just I'm saying reduction of any type of that energy isn't going to be, it can be used someplace else?
PICKENS: Well, you're going to, you’ll add it into the overall grid. But look, go back, wind goes into power generation.
SULLIVAN: Yes. That’s what I mean. It’s nat-gas, coal.
PICKENS: 52 percent is coal-fired.
SULLIVAN: Still?
PICKENS: Oh, yes. 22 is natural gas. 20 is nuke. And, wind falls in miscellaneous and hydro. So it is insignificant. And it will be for a long time. It’s going to take a long time.
SULLIVAN: It’s not stopping you.
All right. We’ve got to take a break but guess what we did? I know you're on Twitter. Did you know you’re on Twitter? You’re on Twitter. We tweeted out --
PICKENS: Why’d you laugh at me because I’m on Twitter?
SULLIVAN: Because I saw you wrote back that you weren’t going to wear a tie. I thought that was funny. I appreciate it.
We’re going to ask your questions. We submitted -- you guys wrote in a bunch of questions. We picked five. We could only five, folks for Boon Pickens. Your questions for Boone coming up next. We're live in Dallas, with Boone Pickens himself.
Stick around
(COMMERCIAL BREAK)
SULLIVAN: Welcome back, everybody. Again, Brian Sullivan here with Boone Pickens for an hour.
We asked you to submit questions for Boone to our (INAUDIBLE) Business.com e-mail. And Boone has so graciously agreed to answer your questions.
And you have not seen these questions. I just tried to show them to you and you said, I don't want to see them. I’ve been asked everything.
PICKENS: That’s right. That’s exactly what I’ve said.
SULLIVAN: Well, we’ll see if we can stump you.
The first question comes from Kelly (ph), in San Antonia, Texas. Kelly says, because the moratorium on offshore drilling some rigs have moved to other countries. Will they come back after the moratorium is lifted and how do you think this will this impact our dependence on foreign oil?
PICKENS: Dependence on foreign oil isn’t going to go down much by drilling rigs moving back into the Gulf of Mexico. Will they come back? They’ll come back if the contract price is better here than where they are. So, to answer, yes, they will come back at some point. But don't count on solving any oil import issues by drilling wells in the Gulf of Mexico.
SULLIVAN: What do you think of the moratorium? That’s my question.
PICKENS: Well, you’ve had two blowouts in 50 years. One in Santa Barbara, one in the Gulf of Mexico. I wouldn’t have had any moratorium.
SULLIVAN: Overreaction?
PICKENS: Overreaction.
SULLIVAN: Bad for jobs?
PICKENS: Bad for jobs. If you go back and look at what I said, I’m on the record on that. It won't be as bad as everyone says is. The well will be killed. I told President Clinton that -- he even suggested that you set off a nuclear device on the floor of the Gulf. I have to laugh. I said, this has to be the craziest idea I’ve heard of.
SULLIVAN: People were talking about it for a while. Some Russian scientists saying you got to blow it up with a nuke.
PICKENS: I know. You can get all kinds of answers to things like that.
SULLIVAN: All right. This goes kind of to our first discussion, Boone. It comes from Dave. No town given. Please, give your town name. We like to reference that.
Your idea of converting 18 wheelers to natural gas makes a lot of sense. I can’t believe anybody wouldn’t support it. Can you explain why this idea has not gotten further off the ground?
PICKENS: Well, your leadership has not fully understood the problem we that face in America -- importing 67 percent of oil. And 40 percent of it comes from areas that our State Department recommends we not visit. Does that sound like those are friendly places? Well, of course not. So, the leadership, when they take us in the direction -- I’m trying to provide some leadership here. I’ve spent a lot of time doing it. I know the subject. I know what I’m talking about. And we’ve got --
SULLIVAN: You don't need votes.
PICKENS: That’s right. I’m not running for election.
SULLIVAN: This comes from Mimi (ph) in Atlanta.
Why don't we hear more about solar energy projects for residential and commercial applications? Solar energy technology is available. Won't it create jobs?
In other words, I know the president is putting solar panels on the White House. Do you have a view on solar Boone, as an investment opportunity?
PICKENS: Do it. It’s American. I'm for anything that’s American.
SULLIVAN: That’s not entirely true. We’ve seen solar farms -- and this ticks me off a bit -- made with Chinese-made photovoltaic cells.
PICKENS: Well, I mean, yes --
SULLIVAN: You know what I mean?
PICKENS: Sure. And I have said don't trade Saudi oil for Chinese battery. That’s not very smart. But we can do all that in America and we have the natural resources to replace the oil.
Now, when somebody says, why don't we do solar? Well, that’s fine but you’ve got to understand what these different resources do. Solar does not run a car.
Seventy percent of all the oil produced every day in the world goes to transportation fuel.
PICKENS: Seventy percent of all the oil produced every day in the world goes to transportation fuel. We do not run power generation on oil here; you do in the Mideast. So we have to have a better understanding of our resources and how we're going to use them.
SULLIVAN: All right, this is from Marie. She says, "Maybe the future of energy could be windmills or solar in the near term," right, part of the answer, "but is there any radical new technology that you see that we don't even talk about now that could help us?"
PICKENS: Oh, there's all kind of technology. You know, algae, biomass, everything else is out there. Once we understand what resources we have, then we'll sort out how we're going to use them.
But our leadership has never said, we're going to get on our resources. When our leadership tells us that in Washington, we are going to get on our own resources, then you create jobs, you cut off the billions of dollars a day you're spending for foreign oil and that money is at home, used and recirculated and everything.
I mean, it's so -- to me, it is very simple to see and what a simple conclusion is leadership has to say you're going to do it and then do it.
SULLIVAN: Well, we got to take another break. You have bought companies, you've built, you've created jobs, you've created wealth, you've lost some wealth. I want to talk to after the break about job creation, about our economic policies. Maybe about gold. Obviously, were the price of oil might be headed.
We're going to do all that stuff, folks, coming up as we continue our hour live at BP Capital with Boone Pickens. We are back on FOX BUSINESS right after this.
(COMMERCIAL BREAK)
(NEWS BREAK)
SULLIVAN: All right, Robert, thanks very much.
Well we're here with Boone Pickens and we happened to spring up another billionaire who is in the energy business, Kelcy Warren, chairman and CEO of Energy Transfer Partners and a record company as well, but we won't talk about that but I it's pretty interesting.
So yes, also on "Forbes 400 List", I feel very poor right now, but that's fine. Maybe we'll talk after the show's over.
All right, I want to talk about energy and natural gas. Kelcy, listen, Boone and I have talked about wind has been so tough because the price of nat gas comes down. Your company is a pipeline company, right?
KELCY WARREN, CHAIRMAN & CEO, ENERGY TRANSFER PARTNERS: Correct.
SULLIVAN: You transport natural gas all over the country. Why are nat gas prices so low?
WARREN: Well, we have an abundance of natural gas. We're covered up with it and will be for many, many decades.
SULLIVAN: So where do you think we're going to go then? Do you think we're going to stay four, five bucks in nat gas for the next few years? Cause to Boone's point, that could hurt some other projects that we've talked about.
WARREN: Well, first of all, the very best thing that ever happened to the nation that's in relation to natural gas prices is the fact that they went high and they stayed high for awhile. We developed technology that we would not have developed producing gas from all these shell plates (ph).
PICKENS: That's correct.
WARREN. We would not have done that. It would have never happened.
So we incented the producer, the independent like Mr. Pickens, the people that know what they're doing, we incented them to go explore, go discover. And they did and now we've got a market that's just -- we're covered up with natural gas.
SULLIVAN: Isn't that the quandary, though? I mean, that's the paradox, I guess, is that nat gas prices -- people like them because their heating bills go down, because of power plant costs, et cetera, but at the same time it then dissuades us from building out things like Boone's trying to work on.
WARREN: Absolutely. I mean, you know, it's funny how supply/demand still kind of works.
(LAUGHTER)
PICKENS: It's unusual, ain't it?
WARREN: It's a strange thing, isn't it, Boone?
PICKENS: Oversupply means cheap, undersupply means expensive.
WARREN: Exactly, exactly.
SULLIVAN: Well, I know you can't see it, I'm going to show a chart to our viewers, Boone, but I know it's in your head anyway, right?
So the price of oil where it is -- 82, 83 bucks -- and the price of natural gas have gone in different directions. Usually the spread is about 10 to 1, right?
PICKENS: Yes, that's -- that's down --
SULLIVAN: Now we're at -- what -- why is there such a huge gap between the price of oil and price of natural gas right now?
PICKENS: Cause, like Kelcy said --
(LAUGHTER)
PICKENS: -- we have too much natural gas, so the price goes down.
SULLIVAN: And not enough oil?
PICKENS: But you know, what a bargain for this country right now that there's no question natural gas is cleaner, right? Thirty percent cleaner than diesel.
SULLIVAN: OK.
PICKENS: OK. It's ours. It's abundant. And what I want to do is replace dirty porn.
SULLIVAN: And Kelcy would like to help you do that, I would imagine, with your company.
WARREN: Everyone in our industry applauds what Mr. Pickens is doing -- everyone -- but nobody seems to get it. You know, I routinely go to Washington D.C. and you get the correct nods at the correct time, but nothing ever really happens.
PICKENS: Look at this, one Mcf of natural gas is equal -- equal to -- to the same amount of work, it's the same amount of energy. One Mcf of natural gas equals seven gallons of diesel. One Mcf of natural gas is $4; seven gallons of diesel is $21.
SULLIVAN: That's it.
PICKENS: Diesel comes from the Mideast, $21, and we could replace it with four.
If we allow this opportunity to pass, you are going to get stuck more than I am and you are too because you are younger than I am, you're a lot younger than I am. Well you are, too. But anyway, you guys, you are going to get stuck with the dumbest crowd that ever showed up in town if you pass up the opportunity to use clean, abundant and cheap.
SULLIVAN: What would you like to see happen, Kelcy? Obviously, you're company, like we talked about, is in the pipeline for natural gas business, what do you think Washington is going to do?
WARREN: Well that is a wonderful question. Unfortunately, natural gas is a fossil fuel, we know that, and so therefore it gets coupled with all these other less-clean fuels that Mr. Pickens was referring to.
I applaud what Mr. Pickens has done on using compressed natural gas for vehicles.
WARREN: I applaud what Mr. Pickens has done using compressed natural gas for vehicles. I’ll tell you, when I was in college or even before that, my little home town -- we were required to use unleaded gasoline. We didn’t do it voluntarily. We were required to. And the reason we were required, first of all, they started putting these little, bitty nozzles in your car tanks. Someone in my little hometown figured out how to cut those out. So we tricked them.
But then later, you couldn't find anything but unleaded gasoline at the pump. The point being, the government got involved. The government got involved and they did the right thing. It improved our quality of life from an emissions standpoint. If we were to simply take that view and say this is right thing for this country, we’d have an abundance on this. Why are we relying on imported crude when we can be pretty much self-sustainable here?
SULLIVAN: Quickly I want to ask you something I asked Boone earlier. What do you say to the critics of natural gas that way, yes it’s here, but it’s environmentally destructive because of the fracking and the way that you get natural gas out of the ground? Because you know, people -- they do. The environmentalists say, yes it’s here, and it’s clean emissions but you hurt things to get it out?
WARREN: You know, without a more specific question, I’m not so sure I can address that other than maybe if it’s the treating of the water they’re referring to --
SULLIVAN: That’s it. Yes.
WARREN: -- the disposable water. Well, there’s many to treat the water. There’s many, many ways. You can dispose of the water in reservoirs, but you can also treat it. We’re in that business. We’re in the business of pipelining the water, rather than hauling it by trucks which tears up the highways and you have other consequences of that. We’re in the business of pipelining it to treatment plants, taking the effluent (ph), the treated water back for reusable water for fracturing. It can be done. It’s just a cost.
PICKENS: Well, let me comment about that.
SULLIVAN: Quickly.
PICKENS: OK. The largest aquifer in North America is Ogallala. It extends from Midland, Texas to South Dakota, across eight states. We’ve been drilling through that and down to producing zones that we fracked for over 50 years. I’ve never heard anybody complain about messing up the aquifer, yet I’m now hearing Pennsylvania, New York, hey, they’re messing up the aquifer.
SULLIVAN: Well it’s a loud minority.
Kelsey Warren. Hey, it was a real pleasure to meet you.
WARREN: Thank you.
SULLIVAN: Thank you very much for coming out. I should thank him, it’s his office.
(LAUGHTER)
WARREN: It’s a matter of being here, especially with Mr. Pickens.
SULLIVAN: All right. Cool. So we got a little more to go. We’re going to get your view on gold and the dollar coming up. All right.
We’re going to take a quick break here on FOX Business, try to bring people together. I don’t think they’d met before today. We’re back right after this short break.
(COMMERCIAL BREAK)
SULLIVAN: You know, it wouldn't be a day without Boone Pickens without a white board and a quiz. So we’re going to pop a quiz on Boone Pickens here. You’re not prepared for this. Let’s see if you can handle this, Boone.
PICKENS: I’m prepared for anything.
SULLIVAN: Here’s what I’m going to do. I’m going to write some numbers on the screen and I want you to tell me which ones are overpriced or underpriced. OK? So that’s the name of this game. Overpriced or underpriced.
First one, 82. And we’re talking, of course, about oil. We are talking about oil. Overpriced or underpriced right now?
PICKENS: That’s the market price.
SULLIVAN: Come on, don't give me that. Overpriced or underpriced?
PICKENS: Well, it’s going up.
SULLIVAN: How much?
PICKENS: You’ll be 85 by the end of the year.
SULLIVAN: 85 by the end of the year. So you think oil is underpriced. Fair enough? You think we’ll hit triple digits next year?
PICKENS: We could. You’ll be over 90. You’ll be over 90. That’s global recovery is what you’re at. And it’ll be led by the Chinese.
SULLIVAN: I better write this out so people know what I’m talking about. Underpriced. OK, so there you go. $82 oil is underpriced.
Let’s throw out another number. Call it 3.50 MCF, right?
PICKENS: NO.
SULLIVAN: B, it’s billion, right?
PICKENS: Yes. No. MCF, MCF.
SULLIVAN: I was right the first time.
(CROSSTALK)
SULLIVAN: I knew you were going to commandeer the white board, Boone.
PICKENS: Four dollars.
SULLIVAN: But it’s under four right now.
PICKENS: Slightly, but not much.
SULLIVAN: All right. So is that overpriced or underpriced?
PICKENS: It’s right on the mark.
SULLIVAN: I’ll write that. I want to feel like I’m contributing. This is on the mark. So you don’t think that that is too cheap?
PICKENS: No.
SULLIVAN: That’s the market price.
PICKENS: You can get all you want for four.
SULLIVAN: We’ll just call that equal, fair-priced. How about that? Fair-priced.
Here’s another number for you, Boone. 1,350. We’re talking about gold. Overpriced or underpriced?
PICKENS: Oh, man, I missed this one so bad. I almost put it on at 1,100. I mean, serious.
SULLIVAN: You almost put a serious gold trade on 11? How serious are we talking about?
PICKENS: Oh, I don’t know. I’d been rich. But anyway, I didn't do it.
SULLIVAN: Why not?
PICKENS: I was looking for a pull back. I didn’t get it. This, I would say is more likely to go up than down. But I’m not a gold expert. So I can’t tell you --
SULLIVAN: Yes, but you’ve got a team of traders that sit around this table --
PICKENS: No, no, no. They aren’t either.
SULLIVAN: You’ve got to talk about it. Everybody’s talking --
PICKENS: We don't talk about gold.
SULLIVAN: At all?
PICKENS: It doesn’t get five minutes a day.
SULLIVAN: Why not? Everybody else is talking about gold.
PICKENS: Well, maybe that’s why we’re different from everybody else.
SULLIVAN: Maybe you could figure out a way to make a gold powered car. Might be a little expensive.
PICKENS: You know what Jon Steward told me. He said, what if I told you mayonnaise would work in your Honda GX-Civic? I said, hell, I’d give her a try. Just so it’s American.
SULLIVAN: So we should by Miracle Whip? You’re long mayonnaise, short Miracle Whip. So gold, you think, if you had to make a bet, is underpriced. A little bit?
PICKENS: If I had to go buy or sell, I’d buy.
SULLIVAN: But you’re not buying gold.
PICKENS: No, I am not. This is got to -- this will have a pretty good adjustment in the next 12 months down. But I’m not ready to --
SULLIVAN: Well, you just said it’s underpriced but --
PICKENS: Now, today. But I say in a year’s time I think that it will be below 1,350.
SULLIVAN: In a year’s time so, OK, because you’ve got the momentum,. Gold has basically done this, right?
PICKENS: Yes.
SULLIVAN: So you think that gold is going to -- could do a little bit of this but then next year -- that?
PICKENS: I don’t think it falls like that, but yes, right.
SULLIVAN: OK. And then you might be a buyer.
