Texas oil tycoon T. Boone Pickens said on Tuesday U.S. natural gas prices were unlikely to “run away” in 2010 but that he was long on the fuel after this year as the economy picks up.

In a video interview with Reuters Insider, the billionaire said he
expects natural gas prices, currently around $5.50 per million British
thermal units, to reach between $6 and $6.50 per mmBtu this year.

“(Natural gas) prices are not going to run away (this year) because we have too much natural gas,” Pickens said.

The United States is estimated to have some 2,000 trillion cubic feet
of technically recoverable natural gas reserves, or enough gas at
current production rates to supply the country for more than 90 years,
thanks to recent increases in production from unconventional plays like
shale.

Pickens was bullish on natural gas after this year as he sees a recovery in the economy boosting demand for the clean fuel.

“I’m long natural gas, not in 2010, but out beyond 2010,” he said. “As
economic recovery occurs, demand will go up for natural gas. It is
going to happen, it is just going to take a little while to get there.”

Pickens also said oil prices, currently near $79 a barrel, could hit $90 a barrel this year and reach $100 a barrel in 2011.

“I think (oil) could get to $90 this year, and in 2011 $100,” he said.

BETTING ON GAS

Pickens has launched a television advertisement campaign in support of
his plan to convert automobiles and trucks to run on natural gas to cut
dependence on foreign oil and boost domestic jobs.

Last July, U.S. lawmakers unveiled legislation that would provide
incentives for the use of vehicles fueled by natural gas. The bill,
which Pickens supports, may be taken up with climate or energy
legislation some time this year.

“I think that legislation will pass before Memorial Day (May 31),” Pickens said.

The potential increase in natural gas as a transport fuel in future
years could help boost Pickens’ own returns for BP Capital Management,
the fund he founded, adding to gains last year.

“Last year, we were up 17 percent on our equity fund, we were up 110
percent on one of our commodity funds and 43 percent on the other,” he
said.

“We think we will do well in 2010, but the really big years could be
2011, 2012 and 2013 because of demand for natural gas for one thing.”

Source: Reuters

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