By Thomas M. Kostigen
Famous oilman T. Boone Pickens predicts brent crude oil will hit $148 per barrel this summer. Brent North Sea was trading at $125 per barrel at the time of his comments. West Texas Intermediate (WTI) was trading at $103 per barrel.
Pickens spoke at the SkyBridge Alternatives Conference (SALT) conference last week in Las Vegas.
"Oil is going to get tight," Pickens said. This he says despite Saudi Arabia's recent announcement that it could up capacity to between 12 million to 12.5 million barrels a day from the 10.3 million barrels it's producing now.
"I never trust the Saudis to tell the truth," Pickens said.
Oil, the old wildcatter said, has had its day; natural gas is the new, new thing.
"Horizontal drilling is just a giant stride for our country," Pickens said. Horizontal drilling is how natural gas is extracted from reserves.
The ensuing "fracking" that occurs, however, is controversial. Fracking derives from the process of hydraulic fracturing of source rocks that produce natural gas.
Just this week investors and organizations representing nearly $1 trillion in assets under management have coalesced to support "best practices" for the fracking of shale gas. To date, 55 institutional investors and other organizations that have been brought together by Boston Common Asset Management (Boston Common), the Investor Environmental Health Network (IEHN) and the Interfaith Center on Corporate Responsibility (ICCR) to push companies to improve fracking practices and risk disclosure.
Fracking can result in tainted underground water and, some claim, even earthquakes.