U.S. energy policy makers should offer incentives to convert trucks to run on natural gas to promote energy independence, billionaire T. Boone Pickens said.
The U.S. has a larger amount of potential energy in natural gas under its soil than Saudi Arabia’s stated oil reserves, according to Pickens, chairman of BP Capital LLC, a Dallas-based energy trading partnership. Gas is currently selling at about one-fourth the cost of oil when measured by British thermal units of energy.
“The cheapest fuel you’ve got in the United States is natural gas,” Pickens, 84, said today at the Milken Institute Global Conference in Beverly Hills, California. “There’s going to be a lot of money made on the demand side.”
At $90.97 a barrel, oil costs about $15.63 per million British thermal units compared with $4.33 for natural gas, according to data compiled by Bloomberg.
Pickens, whose Clean Energy Fuels Corp. has 400 natural gas filling stations, wants the federal government to offer incentives to convert 8 million 18-wheeler long-haul trucks to run on natural gas, raising money for the plan by selling some of the 700 million barrels of oil now in the U.S. strategic petroleum reserve.
For investors looking to make money on natural gas, Pickens’ picks are what he called “midstream operators,” such as Enterprise Products Partners LP and Kinder Morgan Energy Partners LP, which provide services including pipelines and transportation for the industry.
Pickens said it’s impractical for people, such as former U.S. Vice President and Nobel Peace Prize laureate Al Gore, to oppose consumption of natural gas and other fossil fuels, because most of that is used for transportation.
“Seventy percent of all the oil produced goes to transportation,” Pickens said. “If you want to shut down the world, shut down fossil fuels.”