Transcribed by Katherine Baldwin
Reporter: Where does the Gulf of Alaska come into this, and offshore?
T. Boone Pickens: Well, I haven't seen anything found in Alaska that was big. You've got ANWR that has been held up by congress and they don't want to release it for exploration. But, you know, the big deal up there is Prudhoe Bay, and that was found, I believe, in '76.
Reporter: And the Gulf? Deepwater?
T. Boone Pickens: Deepwater? You know, the big field out there, Thunderhorse, which is the latest big fish, Thunderhorse, and they now have cut the reserves in half as to what they originally thought they had.
Reporter: It's not a pretty picture.
T. Boone Pickens: No, it's not a pretty picture. No, you're going to go to alternatives, is what's going to happen. Natural gas will be switched over from power generation to a transportation fuel, because it's way too valuable to be... and in the mean time it will be used for power generation. How long it takes to switch it over? Ten years.
Julian Darley: Can you just say again when we've peaked, when we're going to peak?
T. Boone Pickens: When we peaked? I think we peaked last year. Globally.
Julian Darley: And the maximum ever out of the Earth will be?
T. Boone Pickens: The max? Well I think you're producing now eighty-five million barrels a day, and I think that's about all you'll ever be able to do.
Reporter: What's this going to mean for the future of Texas and the Southwest?
T. Boone Pickens: I think will adjust. You go with alternatives and everything will work out. I'm not afraid of it; it's just a fact that you have declining production. There's no question you have declining production in Texas, in the United States, and globally.
Julian Darley: How do you think business will react when this sinks in?
T. Boone Pickens: How business will react? I don't know. I think you'll take care of... as production at eighty-five million barrels, it's been predicted for a year now, that fourth quarter this year would require eighty-eight million barrels a day. I said a year ago, I said fourth quarter of '07 is going to get very interesting if the prediction of eighty-eight million and you only have eighty-five million, the price has to go up. That's exactly what happened.
Reporter: Are we going to go to a hundred dollars in the next few weeks?
T. Boone Pickens: I don't know about the next few weeks. I think you'll go to a hundred dollars a barrel before you go back to eighty. Now what will take you back to eighty would be a global recession. That'll settle things down as far as oil prices are concerned.
Reporter: Mr. Pickens, when you were talking about gas in there, you were saying in the spring of next year, next year's going to be the low point do you think?
T. Boone Pickens: Oh, I-- Tell me what the winter's going to do, and that's-- Natural gas is so dependent on the weather, so if you have a mild winter, as predicted by some, you could very well be at the low point ever. In the future, I know what the low point was for natural gas, because I sold it for eight cents a thousand. But we're not talking about the low point then, but the low point going forward could occur next summer.
Reporter: And you said spring, you said like around six-fifty? Is that what you're thinking about a low point?
T. Boone Pickens: The low point could be six-fifty if you have a mild winter it could even be lower.
Reporter: If you were talking to a high schooler or college student, what would you tell them to study at this point in their career?
T. Boone Pickens: Well, I still recommend and encourage people to take geology. I think there're a lot of things that are going to have to happen, and you're going to need geologists and engineers, petroleum engineers. I believe there's a lot of opportunity in the industry. It's not--The industry's much different than it was when I got out of school in '51 as a geologist, but a lot of the oil in '51 had been found, too.
What we thought was an A prospect in 1970, in the Gulf of Mexico, today you don't see those anymore. They're gone, they've been drilled, and so the quality of the prospects are gone.
Julian Darley: How do you think governments are going to react when a man like you says the world has peaked?
T. Boone Pickens: Well I've been saying it for two years. I haven't seen anybody react other than somebody says I'm crazy. They're getting more and more, I think, in the groove when you see oil prices at $90 a barrel, I think they're thinking, well oh my god, maybe it did peak. Well, that's right, it did.
Reporter: Why do you think they're in denial then?
T. Boone Pickens: Well they don't want to come to grips with that problem. They have enough problems, I think.
If I'm somebody that's in a powerful position, then I don't want to deal with that question. It's a tough question. What're you going to do now that we've peaked? Where's the oil going to come from? What's going to happen to our industry? Where're we going to go? What's going to happen to the country? People don't want to deal with that.
Julian Darley: Isn't that their job, to deal with these things?
T. Boone Pickens: (shrugs) Alright, I'm leaving, guys.
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