T. Boone Pickens Jr. roiled Los Angeles decades ago with an attempted hostile takeover of Unocal Corp., best known for its orange-ball 76 service stations.
But these days, the Texas oilman is drawn to a different kind of drama. His investment firm, BP Capital Inc., wages battle in the commodities markets, where the wildly volatile prices of crude oil and natural gas can turn big losses into gains in an instant, and vice versa.
After roller-coaster results with his Mesa Petroleum Co., Pickens has found new success with his hedge funds, one of which invests in energy stocks. In fact, at age 78, Pickens says he's making more money now than he ever did in his rough-and-tumble days of drilling for riches in the ground and on Wall Street.
His love of hydrocarbons hasn't waned since the era when he paid 11 cents for a gallon of gas, but Pickens thinks more broadly now. And though he's most at home at his Texas ranch, he also has ties to California. His wife, Madeleine, owns the Del Mar Country Club in San Diego County along with a home overlooking the golf course. Last week, he landed in Beverly Hills to talk about oil prices at a conference sponsored by the Milken Institute. In an interview, Pickens elaborated on his views about oil and other matters.
What is the value of oil, and is it different from the price of oil today?
I'm a great believer in markets. So I think the value of oil is what people will pay for it.
What about the extra boost to oil prices that people say represents a "war premium" or a "terrorism premium"?
I hear people that I have a lot of respect for their opinions talk about a premium. A terrorist premium. I immediately say, do you give it to the terrorists? Is that who gets the premium?
Of course not. I just don't understand how the price can be up because of some fear.
When you come out here to California, are you surprised by the cost of gasoline? Do you look at it?
I look at it. I sure do. Gasoline's cheap in the United States compared to the rest of the world. So it doesn't surprise me.
When was the last time you bought gas?
Why do you ask me, when was the last time? ... I actually bought gas Sunday. I went out to Lone Star racetrack and put $40 worth of gas in my car.
I've heard that you are in favor of something that would increase gas prices in the United States. Do you think that would be a tax?
