T. Boone Pickens to natural gas drillers: stand down until prices rebound

Texas oilpatch veteran T. Boone Pickens has some advice for natural gas drillers: put the rigs away and wait for dismal prices to pass.

“I’d kill the drilling, let the supply go down and then get a better price for the gas,” he told a Calgary business audience Wednesday.

In his speech, Pickens also voiced staunch support for Alberta’s oilsands, which he said are key to the United States weaning itself off crude from unfriendly Middle Eastern countries.

When the 82-year-old oilman spoke to the Calgary Chamber of Commerce more than a year ago, he said he had bet on natural gas prices of US$7 per 1,000 cubic feet.

He admits now that was a bad call.

“I was wrong,” he quipped.

This time around, Pickens has a more bearish outlook. He said there’s a good chance natural gas prices will linger in their current sub-US$4 range well into next year, barring an unusually cold winter.

“Right now if I was running a drilling program in the United States, I would stop drilling wells. I wouldn’t drill any wells for US$4 gas,” he said.

Using natural gas in heavy-duty vehicles instead of diesel is a key plank of the Pickens Plan, a blueprint he devised in 2008 to help the United States achieve energy independence. The plan also calls for major investment in wind and other forms of renewable energy.

Pickens wants to see Canada and the United States form an energy alliance, which could take the form of a bilateral commission to work on energy policy.

“I just think a better understanding, knowing each other would help the relationship,” Pickens told reporters.

“I think you could clear a lot of the oilsands issue up. That would be No. 1 on the agenda.”

That oilsands issue — or “dirty oil” as some environmentalists south of the border have dubbed Alberta crude — is something the media have blown out of proportion, Pickens said.

He said the United States welcomes every drop of oil from Canada it can get, especially if it means his country relies less on its enemies.

U.S. dependence on foreign oil, he said, is aiding and abetting the Taliban in Afghanistan.

“We cannot continue to buy oil from the enemy, and pay for both sides of a war unless we’re going to go down as the dumbest generation that ever came to town. And that’s the way we look to the rest of the world, I’m convinced,” Pickens said.

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