NEW YORK – T. Boone Pickens dropped by Fortune’s offices last Thursday, and not surprisingly the billionaire oilman had oil on his mind as gas prices hit yet another new high.
“The only way you’re going to kill demand is with price increases,” Pickens, 80, told a group of editors and writers. “But demand is not as easy to kill as you think.”
The legendary Dallas wildcatter and corporate dealmaker believes the world is approaching “peak oil” – meaning we’ve pumped out more oil than remains in the ground – and he’s looking beyond the petroleum age by placing some big bets on wind. His $12 billion Pampa Wind Project in Texas will generate enough electricity to power some 1.3 million homes when completed in 2014. (Last week Pickens’ Mesa Power placed an order for 667 turbines with General Electric (GE) for the project’s $2 billion first phase.)
For Pickens, wind is key to weaning the U.S. from the petrol pump. “The only transportation fuel we have in the U.S. to replace oil is natural gas,” he said.
Here’s how it would work, according to Pickens. Replace the natural gas power plants that generate about a quarter of the electricity in the United States with wind farms. Use the freed-up natural gas to power cars, trucks and other vehicles. “We could reduce oil imports by 38 percent,” Pickens declared.
The U.S Department of Energy earlier this month released a report estimating that wind power could supply up to 20 percent of the nation’s electricity by 2030. Huge hurdles stand in the way of achieving that target, such as the need for a massive upgrade to the transmission system and the fact that the wind blows intermittently. And natural gas-powered cars won’t be as clean as, say, electric vehicles powered from solar.
Wind isn’t the only green energy source on Pickens’ horizon. I ask him about large-scale solar and he pulls out a map illustrating the best spots for solar power plants in the U.S. “I like it,” he says. “We’re looking at all renewable energy.”
As he put it earlier in the conversation, “I’ve been too early on a lot of things, but now I have enough money to be as early as I want.”