Energy magnate T. Boone Pickens says the U.S. oil industry may be “dead in the water,” but gasoline prices are low and the economy is thriving.
“The industry is dead in the water,” he said during a dinner discussion Tuesday night in New York. But at the same time, efforts by the Saudis and the Organization of the Petroleum Exporting Countries to help the struggling sector are comical at best and show that OPEC has become irrelevant, he said.
The dinner was hosted by free-market proponents Committee to Unleash Prosperity. Those in attendance ranged from Wall Street fund managers to conservative commentators and former government officials.
He took a number of questions related to the oil industry. He said the price of oil would have to rise to nearly $60 per barrel for the industry to get back on its feet. The figure jibes with projections BP made earlier Tuesday in issuing a less-than-stellar first-quarter earnings report. The same day, Exxon Mobil’s credit got dinged by Standards and Poor’s, taking away the oil giant’s gold-plated AAA credit rating for the first time since the Great Depression.
Nevertheless, “I think we got a pretty good economy,” he told the Washington Post in an interview on the sidelines of the dinner. “It’s horrible for the oil business, but the rest of America is there doing great off … $2 a gallon gasoline.”
Pickens also had fun ridiculing the Saudis in their fumbled attempts to boost the price of oil and end the ongoing oil supply glut, which is the reason oil companies are taking a hit and hemorrhaging jobs.
He doesn’t see anything that the Saudis cook up as a solution. He told dinner attendees that Saudi Arabia’s idea of selling shares of the national oil company Aramco to raise capital is laughable. “It’s a joke,” he said. “Who the hell would want to own Saudi Aramco?” He said buying a stake in Aramco means buying a stake in Saudi Arabia’s internal politics, and no one wants that.
Pickens floated his own energy plan years ago called the Pickens Plan, which is still in place via pickensplan.com, where he offers commentary on where he thinks the oil industry is headed.
A post from Friday took great pleasure in poking at Saudi Arabia’s failed attempts to stabilize the oil market during a meeting in Doha, Qatar, earlier this month. “Powerful gathering?” he asked in a blog. “Hardly. Laughable is more like it.”
Forty years ago, Middle East oil producers gathered to discuss an embargo against the U.S., which hurt the American economy.
“My, how times have changed,” he said. The Doha gathering “was as fractured as the Mid East itself,” he added. He said there was no agreement to suspend production, but it was entertaining. “It was a comical sideshow on the global energy stage that proves, yet again, just how irrelevant OPEC has become these days.”
