WASHINGTON (Reuters) - Oil prices will hit $300 a barrel in 10 years if the United States fails to reduce its dependence on foreign imports, billionaire oil investor T. Boone Pickens told U.S. lawmakers on Tuesday.
The United States imports nearly 70 percent of its oil and Pickens said the world’s top petroleum-consuming nation would import 80 percent in a decade if it does not aggressively tap its own natural gas and renewable resources.
“If we continue to drift, oil will hit $300 a barrel in 10 years,” Pickens testified at a hearing of the U.S. Senate Homeland Security and Governmental Affairs Committee.
He testified as the Senate planned to debate energy legislation amid calls for more oil drilling to help lower oil prices which hit a record this month of over $147 a barrel.
Pickens has been touring the country pushing a plan under which domestic natural gas supplies would be used to power cars instead of electrical power plants. The federal government and private investors would build a massive wind farm system in the middle of the country from Mexico to Canada to provide electricity.
Pickens, who heads the hedge fund BP Capital, stands to benefit from such a program. He’s building a 4,000 megawatt, $10 billion wind farm in northern Texas that should start generating power in 2011.
Industry group the American Wind Energy Association (AWEA) has said the Pickens plan could work if the government renews the production tax credit for renewable energy, preferably for longer than a year or two.
Growth in U.S. wind power has been dramatic. Preliminary figures show the United States in July may have surpassed Germany as the world’s largest generator of wind power, AWEA said.
“We’re on track to doing that, if it hasn’t happened already,” said an AWEA spokeswoman.
Wind could generate 20 percent of U.S. electricity by 2030, only slightly less than natural gas currently fires, the Department of Energy said in a report.
Building transmission lines and securing corridors to bring wind power from the heartland to the coasts would be a major effort.
“I think we’re talking eminent domain,” Pickens told reporters after the hearing, referring to the practice in which the government sometimes seizes private property with monetary compensation. He said bringing the power to the coasts would take an effort similar to former president Dwight Eisenhower’s building of the national highway system during the Cold War.
It could cost hundreds of billions of dollars to develop wind power. Pickens said reduced crude oil imports could pay.
Natural gas analysts were less certain the country can convert quickly from its gasoline- and diesel-based vehicle transport and fueling systems.
Chris Kostas, analyst at Energy Security Analysis Inc in Boston, said growing oil demand from developing countries like China and India could keep crude prices rising even if the United States succeeded in cutting oil imports.
Some 8 million vehicles in the world run on natural gas, with only about 140,000 in the United States, said Pickens, who owns a Honda car that runs on natural gas.
House Democrats were to hold a closed door caucus meeting with Pickens on Tuesday evening to discuss his plan.
Reporting by Timothy Gardner; Editing by David Gregorio