Pickens on natural gas: You can't beat it

The oilman talks tough about Washington, the Iraq war, and our energy future.

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By Josh Glasser, contributor

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T. Boone Pickens, who conceived of the Pickens Plan, an initiative to end America's dependence on foreign oil
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NEW YORK (Fortune) -- Texas oil magnate T. Boone Pickens may have postponed his plans to build the world's largest wind farm in Texas, but he's come closer to accomplishing another goal: Pickens visited the nation's capitol last week to help Senate Majority Leader Harry Reid (D-Nev.), Senator Orrin Hatch (R-Utah), and Senator Robert Menendez (D-N.J.) introduce a bipartisan bill designed to bring natural gas vehicles to the mainstream American market.

Pickens's Washington, D.C., trip marked the conclusion of his "Pickens Plan" -- a much-discussed yearlong crusade to end America's dependence on foreign oil. Now convinced that natural gas's low price makes it more viable than expensive wind technology, Pickens stopped by Fortune's offices to reflect on his $60 million campaign to promote alternative sources of energy. The takeaway message: Natural gas must replace petroleum. "It's cleaner, it's cheaper, it's ours, and it's abundant," Pickens told Fortune staffers. "And boy, you can't beat that."

Excerpts follow:

On Washington's failures...

"Washington did not understand the problem [with relying on foreign oil], and they don't understand energy. They don't understand what it's doing to the country, they don't understand the addiction. It just kind of goes along because of one thing: For forty years you had no leadership and you had cheap oil. So what'd you do? You keep using more and more oil....

"When we kicked off [the Pickens Plan] this time last year, you had $4.11 gasoline, which helped the kick-off. And you were importing 68% of the oil in this country. If you're going to pay $140 a barrel, it's going to cost you $700 billion.... Now, fortunately, that $140 didn't hold up, and the price dropped. But it's still the greatest transfer of wealth from one group to another group."

On how natural gas will become the future...

"[Natural gas is] 50% cleaner than diesel and gasoline. So you're getting all kinds of pluses with the natural gas. What are the minuses? The infrastructure isn't quite there. But it will get there. Don't worry about it. The government doesn't have to put any infrastructure in. If the cars are still there, people will build stations to fuel the cars.

"The [natural gas vehicle] technology is there. It's in place. It works. There's 10 million vehicles in the world today on natural gas, and 142,000 of them are in the United States. What the fuel is is a bridge to [newer alternative energy technologies]. It's what you have. It's not forever."

On why natural gas must become the future...

"This is going to have to happen because it's a security issue for the country. I mean, you're buying oil from your enemy. With people around the world, our credibility isn't worth a hoot because of that reason. They cannot understand why we're funding both sides of the war."

On how the world views America...

"[An Irish colleague told me,] 'You are the biggest importer of oil of any country in the world.... Out of 85 million barrels a day, the United States uses 21 million. They're using 25% of all the oil produced in the world every day with 4% of the population. How do you justify that?' I said, 'I don't. I don't even try to justify it.'

"And I said, 'How do you think the rest of the world sees us?' And he said, 'I can tell you how we feel about it. We think you're stupid to buy your oil from the enemy.'

"See, I don't understand why the other side of this equation doesn't pin it on us, America, and say, 'Hey, you're using 25% of the world's oil with 4% of the population. You're the problem. Just cut yours down in line with the rest of the world, and hell, we'll have all the oil anybody could ever want.'"

On Iraq...

"We got nothing out of Iraq. We've lost 4,000 people and spent $2 trillion, and we have goddamn nothing. Okay, well, we can get a call on the oil [at the market price]. And I took that to the White House last April, a year ago, when Bush was there, and I said, 'Don't leave office without getting a call on the Iraqi oil.'

"Bush said, 'They'll accuse me of doing the Iraq war [for oil].' And I said, 'Hey, that was a long time ago. Since then we've lost 4,000 people and spent $2 trillion. We're entitled to it now.'"

On what we can learn from Iran...

"Iranians have already switched everything to natural gas. Why? Because they have an abundance of natural gas. It's cheaper, it's cleaner, and it's theirs. We have the same dynamics going for us, and we're sitting here not doing it. You keep saying, 'Well if it's so good, why aren't we doing it?' And I'm saying we haven't had the leadership to promote it."

On a gas tax...

"They all ask me in Washington, 'How do you feel about a gas tax?' I said, 'I can stand it a lot easier than you can -- I'm not running for reelection.' Sure, go ahead and put a gas tax on....

"You sell [natural gas] on the patriotic angle, and say we can get it cleaner, we can get it for the same price, and it's ours. Hell, you're creating jobs. Every time you do it you're creating jobs. Right now, when you buy foreign oil, your money's gone. You [do] see it again: It comes right back in and buys your assets."

On why American energy, no matter what...

"The way I look at it, everything that's made here is good. Because it creates jobs and pays taxes, and it gets [us away] from foreign oil. So everything I can do here helps the country....

"I've had the coal guys come to me and say, 'Hey, don't knock our product.' And I say, 'Look, I'm for anything that's American.' Would I rather have natural gas power than coal power? Yeah, because it's much cleaner than coal. But at the same time, you can't. That's not realistic to shut down all your coal power. You can't do that."

On changing the social climate in America...

"This is all about a move, a tipping point, where everyone says we've got to get off foreign oil. We need to get on our own resources. And then it's 20 minutes before Sunday School class -- when everybody's drinking coffee and talking about how to straighten the world out -- and somebody says, 'I notice you're still driving a car using foreign gasoline.' ... You're going to feel embarrassed. At some point you will be challenged, 'Why are you continuing to use foreign oil?'"

On where we go from here...

"You need to conserve; you have to conserve. We could be much better than we are. I can't even believe SUVs.... If we were into wind, then in ten years we'd be so much more efficient, we'd know more about it, we'd do a better job. And solar, too. People say that solar will never work. It won't work with that attitude, I'll tell you that.

"You gotta realize where we are and what we're doing to ourselves. We have actually set up a trap, we crawled in the trap, and we're real close to closing the door on the trap. And we cannot do that when we have resources here that can replace what's gotten us into the problem." To top of page

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