$400 A Barrel Oil in Ten Years?

Legendary energy executive Boone Pickens brought up the possibility of $400 a barrel oil by the end of the decade. Speaking on CNBC’s Mad Money, Pickens explained to host Jim Cramer that his forecast was based on OPEC’s revenues over the last decade

Pickens was using OPEC revenues between 2003 and 2008 as a model, he said. Those revenues clocked in at $250 billion in 2003, but just five years later they had skyrocketed to $1.250 trillion, five times that of ’03.

“If we don’t do anything,” Pickens said, “in 10 years we will be paying $300 or $400 a barrel for the oil.”

At present, the U.S. pays $1 billion a day to import crude oil. This enormous expenditure accounts for two-thirds of the country’s trade deficit. As Pickens pointed out, the U.S. doesn’t lack domestic alternatives, ones that he said would keep American dollars at home and help stimulate job creation.

That’s why he’s so bullish on natural gas, a fuel that’s plentiful here in the US. So much so that Cramer called Pickens “one of the biggest boosters of natural gas out there.” But he endorses more than just that one commodity. As part of the Pickens Plan he announced back in 2008, he called for the utilization of all kinds of energy – wind, electric, even ethanol – as long as it was American.

“Anything but OPEC oil,” Pickens told Cramer. “That’s what I don’t want.”