T. Boone Pickens Should Stop With the Oil Forecasting
Watching the cable business news on Wednesday, I nearly fell off my chair listening to T. Boone Pickens describe himself as knowing more about energy than anybody in America, then admitting he couldn't explain falling oil prices given that world demand was 91 million barrels a day and the industry couldn't possibly keep that up.
Anyone who has tried to forecast oil prices as often as Pickens does should certainly have a little more humility (God knows I've gained some), and given some of his own failed bets—on natural gas in the 1990s and wind more recently—he definitely needs a good dose of it.
His inability to understand how the industry can meet demand should provide him with a clue that perhaps he doesn't know as much as he thinks. Instead, he makes the logical leap that it can't be done, and prices must rise. This is reminiscent of Erich von Daniken, who, not comprehending how ancient Egyptians could build the pyramids, concluded that aliens must have been involved.
World oil production in April was estimated to be up nearly 4 million barrels a day year on year with recovery in Libya and soaring production in several places, most notably Iraq, but also the United States, Colombia, and Brazil. The notion that it peaked about 2005 (endorsed by Pickens in Playboy) is driven by a combination of weak oil demand and problems in a number of producers. Recent papers, such as the Nature article and an International Monetary Fund paper have mistaken short-term political problems for immutable trends. They should note that in 2007, Pickens said in Playboy we'd never pass 85 million barrels per day. We're now at 91 and climbing. Oops.
http://www.usnews.com/opinion/blogs/on-energy/2012/05/18/t-boone-pickens-should-stop-with-the-oil-forecasting
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