• With: T. Boone Pickens, Founder & Chairman, BP Capital

    This is a rush transcript from "Your World," October 20, 2011. This copy may not be in its final form and may be updated.

    NEIL CAVUTO, HOST OF “YOUR WORLD”: Well, Libyans are celebrating today the end of their dictator, who we now found out moments ago was ultimately killed in crossfire after he was apprehended alive.

    Boone Pickens looking at all of this. And if you think that probably one of the world’s most celebrated energy giants thinks that this at all changes the energy equation, you’re arguing, Boone, it really doesn’t.

    But whether we are talking oil or whether it changes how much more is on the oil market friendly to us, unfriendly to us, nothing changes?

    T. BOONE PICKENS, FOUNDER & CHAIRMAN, BP CAPITAL: Well, when they shut off the Libyan oil, the Saudis immediately said, we will take care of the problem. And it has been taken care of. So, Libya at one time produced over three million barrels a day. At the time they were shut off on the problem they have had in the last few months, they were 1.7. And they went down to, I don’t know...

    CAVUTO: One-point-seven million barrels a day.

    PICKENS: Yes.

    CAVUTO: But at their height, three million?

    PICKENS: Yes, they were over three million at one time several years ago.

    CAVUTO: Saudi Arabia made up for that.

    You say, bottom line, though, whoever comes in now, it doesn’t matter to us. Explain what you meant.

    PICKENS: Right. It just gets absorbed back into the market.

    OPEC produces 30 million barrels a day. And the world produces about 90 million. So 30 is in the 90. The total is 90 million. So, 1.7 million was taken off. It’s back up to 300,000 now. And they will take it on up to -- I don’t think you will get to 1.7 million. Historically, mature oil fields do not go back to the level they were when they were shut down.

    CAVUTO: What about oil prices themselves? Will they back to highs that seem in the distant memory now, or what? What are we looking at?

    PICKENS: Well, I think the global market is Brent North Sea crude, not West Texas intermediate. So when you are looking at the world, look at Brent North Sea.

    CAVUTO: Over which Libya for a while at least had a much more direct impact, right?

    PICKENS: Well, it just meant that the Saudis cut back a little bit and made room for Libya. Libya goes off, the Saudis produce more, and it’s all taken of.

    (CROSSTALK)

    PICKENS: The balance is very fast.

    CAVUTO: Right. We could produce more here. It’s been a problem. But what do we do now?

    PICKENS: Here in the United States? We are producing oil out from the United States. And if you want to produce more in the United States...

    CAVUTO: Governor Rick Perry, I think you are endorsing him, right, or you like him?

    PICKENS: Well, he is my governor.

    CAVUTO: OK. All right.

    He thinks that we should be exploring and aggressively after more oil here. Do you agree with that?

    PICKENS: Well, I would broaden it. I would say get on your own resources. And we have resources to get on.

    CAVUTO: Oil is among them. But you also believe in gas?

    PICKENS: Well, natural gas, we are the largest producer in the world. We have more reserves than anybody else, natural gas reserve. Natural gas is 30 percent cleaner and a fraction of the cost of oil. One MCF of natural gas is $4.

    CAVUTO: What is a MCF?

    PICKENS: A million cubic feet.

    CAVUTO: Gotcha.

    PICKENS: But one MCF, $4, that is equivalent to seven gallons of diesel.

    CAVUTO: So why aren’t we going on a gas parade?

    PICKENS: The leadership is not taking us that direction, but natural gas in the United States, at $4, is four times that in the Middle East and it’s three times that in Europe.

    CAVUTO: What about solar? Why aren’t you on the solar bandwagon?

    PICKENS: It’s too expensive.

    (CROSSTALK)

    CAVUTO: Wind?

    PICKENS: Sure. I’m for wind, but it’s too expensive. See, wind is priced on the margin. The margin is natural gas for power generation. And natural gas at $4, you can’t finance a windmill. You have got to have $6 natural gas to finance a windmill.