This is a rush transcript from "Your World with Neil Cavuto," June 4, 2008. This copy may not be in its final form and may be updated.

NEIL CAVUTO, HOST: All right, well, crude oil dropping now near $122 a barrel, but if my next guest is right, get ready for $150 oil. He has been right every single step of the way. I guess that is why he is a billionaire. Texas oilman Boone Pickens joins me now, in a FOX exclusive.

He has got a new book coming out as well. It`s entitled "The First Billion Is the Hardest."

You know, I have always said the same thing.

Boone, good to have you.

BOONE PICKENS, FOUNDER & CHAIRMAN, BP CAPITAL: Thanks.

Video: Watch Neil's interview

CAVUTO: I was thinking of you, my friend, when we had George Soros on Capitol Hill yesterday, saying there's a lot of — I'm paraphrasing — speculative froth built into the oil markets, treating this like the Internet stocks, so, way, way overpriced, way, way overdone, big comeuppance to come.

PICKENS: I don't agree.

I think it is very simple. But you know this. I am a simple guy, Neil, an old geologist from Oklahoma State. I am not a financial guy. But when — I understand about oil markets, though. And when you have 85 million barrels of supply globally, and 86.4 million demand, that does not have anything to do with manipulation or anything else.

CAVUTO: But do you think, to his point, Boone, about average folks who can stock up oil-related stocks and funds and ETFs and targeted mutual funds, that that does sort of gun this?

PICKENS: No, I don't.

I think it is, 85 won't cover 86.4.

CAVUTO: All right, but we're — how much more are we using vs. a year ago? Because the price seems to have gone up a heck of a lot more than what we were using a year ago.

PICKENS: Well, any time that the demand is more than the supply, it becomes, who is going to pay the most to get the oil?

CAVUTO: And that is what is going on here?

(CROSSTALK)

PICKENS: Well, yes. You saw what Naimi when — when Bush was over in Saudi Arabia, what was it, two weeks ago, or a week ago.

(CROSSTALK)

PICKENS: The day after he was there, he said, if you want more oil, pay for it. They're just telling that — that you are going to pay up, is what is going to happen.

CAVUTO: All right. Now, they also were critical of the United States, saying, if you really feel this serious about our opening up more oil to you, do it yourselves. And the president really was at a loss to address that, because, while he has been urging that, he has been stopped by Congress on that.

PICKENS: Sure.

Here we are over, trying to get somebody else to sell us their oil. They're telling us, it is a finite resource. And Abdullah said that he — this was weeks ago — he said, we are going to keep this finite resource into the future for generations and our own country.

At the same time, we are saying, produce more oil, and we can't open up ANWR. We can't get in the OCS. And we don't have the federal lands in the West. I mean, I don't see how we go out and ask somebody to do something we won't do ourselves.

CAVUTO: Well, you know, on the same show I had you on FOX Business Network, I remember we had Donald Trump on. He said, there — there comes a time to have a Tony Soprano moment and to let them know how much they need as and how important we are to them. What do you think of that?

PICKENS: I think that Donald Trump should stick to real estate. I don't think he knows anything about the oil business. And he just doesn't understand.

But he is a smart guy. I know what his net worth is, so he is smart. But oil ain't his game. Real estate is not my game.

CAVUTO: All right.

So, let's talk a little bit about this move, this climate change bill on Capitol Hill that would, almost invariably, lead to higher prices, the dispute is just on how much. Do you think that the bill itself could effectively double gas prices?

PICKENS: Oh, gosh. The bill itself? I don'`t know the bill.

I mean, you're talking about the one that Warner and Lieberman came up with today?

CAVUTO: Right. Right.

PICKENS: I have not seen any details on that. And I don`t know. You know what they came out with won't pass. It will be something much different than what they have. And, so, I don't pay any attention to those opening shots. Let it get...

CAVUTO: But I know you know the possibilities. You try to ignore it, and you see what is going on, but you can clearly see that oil guys, natural gas guys, energy guys in general, have sort of like a target on them.

And if we see a Democratic president elected, emboldened by Democratic majorities in the House and Senate, it might be a tough environment, right?

PICKENS: Well, let me tell you what the tough environment is — and the spotlight ought to shift, just like it does on health care — is the price we are paying for imported oil, which is $700 billion, when we're at $125 a barrel, out of this country goes to friends — and questionable friends. That's $700 billion a year.

Now, focus on that just for one second — $700 billion a year is five times what the Iraqi war will cost us in 12 months. We can't afford this. I mean, this is not sustainable. If you want to break the United States, you just keep pouring out $700 billion a year, and you will do it.

CAVUTO: Now, you would like to see us looking not only for more oil here, but also alternatives here. You're big on wind power and the like, right?

PICKENS: Right.

CAVUTO: So, you think we can do it all?

PICKENS: Well, I say this. There's only one.

If you list all of the resources that we have to work with in the United States, there's one only that can actually replace foreign oil. That's natural gas. So, natural gas moved into the transportation fuel market could replace — and you can go through the numbers — and I know the numbers — but you could — you could reduce foreign imports by 38 percent if you went to natural gas as a transportation fuel.

CAVUTO: Real quickly, John McCain, looks like he is the guy against Barack Obama. I know you are a McCain man. But he has got an uphill fight.

PICKENS: He's got what?

CAVUTO: An uphill fight.

PICKENS: Well, when did we have an uphill fight? That is the way it is every time.

CAVUTO: And you think he can win it all?

PICKENS: I think John McCain can win, yes.

CAVUTO: What will be key to his victory?

PICKENS: I don't know. I'm not — honestly, I am kind of taking a hands-off on this. I have got another idea. And, so, you will see, I mean, what I have in mind.

CAVUTO: Are you talking politically?

PICKENS: Thinking about running. No.

(LAUGHTER)

PICKENS: No. No, I just — I just am kind of going to sort of step aside on this one.

CAVUTO: It sounds like you are not an enthusiastic backer of McCain.

PICKENS: Oh, I am enthusiastic. I have never voted for a Democrat for president in my 80 years. Of course, I have not voted 80 years. I think the first time I voted, it was 21 then. So — and I voted for Tom Dewey.

(LAUGHTER)

CAVUTO: That was then. This is now.

PICKENS: A long time ago.

CAVUTO: And, real quickly, we should say that "Forbes" has come out with a piece on you that you — you have the brain set and skill set of a guy half your age, right?

PICKENS: That — I got a good report from U.T. BrainHealth and also from Cooper Clinic. They wanted to do a deal on me, see, how are you really?

CAVUTO: And you defied the odds. See, they did the same thing on me, Boone, and I was double my age. It was the...

(CROSSTALK)

PICKENS: Oh, you didn`t double your age.

CAVUTO: All right. Boone Pickens, great seeing you again my friend.

Boone Pickens, the energy maestro.

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