Paul Kedrosky: Pickens Picks a Peak of Petrol

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March 2, 2007

Pickens Picks a Peak of Petrol

At a Forbes conference in Doha, Oilman T. Boon Pickens has picked the current global oil production capacity of 85-million barrels a day as the peak of petroleum production.

... most industry and government analysts are far less pessimistic than the straight-talking Texan. Most believe petroleum will be a growing energy source for decades. The U.S. government expects oil demand to rise to 120 million barrels a day by 2030 and says a peak in output - the point at which half of the world's reserves are depleted - won't arrive until mid-century.

Forbes publisher Steve Forbes challenged Pickens' assumptions, saying political - not technological or geological - roadblocks stood in the way of increasing the world's oil output. With the right incentives in places such as Mexico, more oil could be brought to market and prices could drop, Forbes said.

Pickens responded by saying that Mexico is a declining producer of oil, as are most other countries, naming the United States, Norway, Britain, Canada and soon, Russia.

"The world has been looked at," Pickens told Forbes. "There's still oil to be found, but not in the quantities we've seen in the past. The big fields have been found, and the smaller fields, well, there's not enough of them to replenish the base."

Pickens predicted oil prices would rise this year to an annual average of around $70 per barrel. On Wednesday, prices settled at $61.79 on the New York Mercantile Exchange.

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