Offshore Drilling's Payoff May Not Be Energy

This week, President Obama ended a ban on oil and gas drilling along some parts of the U.S. Atlantic coast and northern Alaska. His decision has staggered some of the president's own environmental supporters, but others say the decision is necessary to help decrease U.S. dependence on foreign oil or win bipartisan support for an energy and climate change bill. Host Scott Simon speaks with energy mogul T. Boone Pickens, who has pushed for more investment in alternative energy sources.

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SCOTT SIMON, host:

This week, President Obama ended a ban on oil and gas drilling along some parts of the U.S. Atlantic coast and northern Alaska. The president's decision has staggered some of his own environmental supporters, but others say the decision is necessary to help decrease U.S. dependence on foreign oil or win bipartisan support for an energy and climate change bill.

We're joined now by T. Boone Pickens. He's chairman, CEO of BP Capital, which runs energy-related commodity and equity funds. Of course, he's earned billions in investing in oil and natural gas and has pushed for more investment in alternative energy sources. He joins us from his office in Dallas. Mr. Pickens, thanks so much for being with us.

Mr. T. BOONE PICKENS (Chairman, CEO, BP Capital): Sure.

SIMON: There seems to be some skepticism over the past couple of days that there is a whole lot of oil to be found out there in those fields off the Atlantic and northern Alaska. How do you feel about that?

Mr. PICKENS: Well, I mean, people would like to think that off the east coast of the United States you might have another Gulf of Mexico, and that's not even prospective. Geologically, it does not have that kind of opportunity at all. So, I heard some guy on TV said it accesses you to 14 billion barrels immediately. What's he talking about? There's not 14 billion barrels there to be accessed to.

I would say that east coast, Anwar and the eastern Gulf of Mexico, all added up, I would be surprised if you could get one to two million barrels a day out of it.

SIMON: Then why do it if the yield is that low?

Mr. PICKENS: That would be my thought but I don't want to shut down any drilling, you know, let's drill if that's what they want to do. And that creates jobs and money spent. And there'll be some oil and gas found but you're not going to...see, we're importing daily 14 million barrels of oil and we're producing seven in the United States. So, we're importing two-thirds of what we use.

And there's 85 million barrels a day produced in the world every day and we're using 21 million barrels of that. So, we're using 25 percent of all the oil with 4 percent of the population. I don't think that's sustainable.

SIMON: But it's interesting, Mr. Pickens, I would hazard to guess that the president and his administration are grateful to have your verbal support. But I must say the arguments you're citing to explain your support might not give them much comfort at all.

Mr. PICKENS: Well, if they're counting on solving imports...now, the president, he clearly said no oil will be imported from the Mideast in 10 years. So, it's very clear he knows what he's saying but I have not seen a plan yet that's going to solve the problem.

SIMON: Well, let me ask you also as someone who has invested in the future of wind energies. Does a decision like this, given the scale of commitment it represents, detract or distract from investing in alternative energies like wind?

Mr. PICKENS: I don't think he said anything that hurt wind energy. You're going to have to pass some legislation to get wind and solar kicked off. It's moving slowly but there will be, I think, legislation passed this year that will give So, I think that, you know, that's going to move along fine. I'm not concerned about that. But if you want to reduce the five million barrels that we import from OPEC - and I consider that oil to be, in some cases, you're actually buying oil from the enemy and I think you're probably paying for both sides of a war. And I don't think it's smart for us to do that. And we do have a resource in America that we could use.

If we don't get on our own resource when we have the opportunity to do it, this generation could go down as probably the dumbest crowd that ever came down the street.

SIMON: T. Boone Pickens, chairman and CEO of BP Capital, speaking from Dallas. Thanks so much for your time, sir.

Mr. PICKENS: You bet. Thank you.

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