World oil output has already peaked, and prices that have surged to record highs above $90 a barrel are a sign of things to come, said investor Boone Pickens, chairman of Dallas-based BP Capital LLC.
Global production has peaked at 85 million barrels a day, Pickens, 79, said in an interview today at a Houston conference sponsored by the Association for the Study of Peak Oil & Gas, a non-profit think tank. Oil will rise to $100 a barrel before falling to $80 again, he said. Earlier this week, he said crude would reach $100 by year's end.
``As this unfolds, you're going to have to find alternatives that are going to do the job that oil is doing,'' Pickens said. ``Everyone is going to have to come to grips with this in the next two or three years. People are going to have to figure it out.''
Peak oil is the theory that world production has reached or is about to reach its zenith, after which it will begin an unstoppable decline. Critics say it's impossible to know when petroleum output has peaked, given uncertainties estimating global reserves. Previous efforts to peg a date for peak output have been wrong, they say.
Investors such as Pickens and analysts like Matthew Simmons of Houston investment bank Simmons & Co. International support the peak oil theory. Executives from companies such as Exxon Mobil Corp. have downplayed the possibility.
``They talked like $50 was going to be difficult, and $60 and $70. We went through those like a knife through hot butter,'' Pickens said.
Last month, Pickens predicted that oil would reach $100 a barrel after falling to $78. Futures in New York dropped as low as $78.35 on Oct. 8, and touched a record high of $90.07 today. - Bloomberg
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