US Manufacturing to Take Off on Cheap Energy: Pickens
Manufacturing in the U.S. could take off right now on the back of "the cheapest energy in the world," BP Capital founder T. Boone Pickens told CNBC on Thursday.
Prices from American supplies are "20 percent cheaper on oil; 75 percent cheaper on natural gas; and 50 percent cheaper on gasoline," he said in a "Squawk Box" interview, adding that companies could pay their factory workers higher wages and still make more money than they would if they outsourced overseas because of lower energy input costs.
Through the "Pickens Plan," the billionaire energy entrepreneur has been advocating for years that the U.S. rely solely on its own resources, instead of foreign oil, as a means of boosting the economy.
"We have more [natural] gas reserve than any other country in the world," he said. In the last three years, he added, America has boosted oil production by about "two million barrels … in spite of the government."
(Read More: OPEC Sees Risks in US Oil Production Forecasts)
But Pickens pointed out the cost of gasoline in the U.S. is still set by how much oil the Organization of the Petroleum Exporting Countries allows on the market. "[The cartel] will keep dropping supply to keep the price up above $100 a barrel," he said.
Meanwhile, gas prices have been rising — now sitting near four-month highs.
The Automobile Association of America reported that national retail prices for regular gasoline are up 13 percent to an average $3.748 a gallon from a month ago; up from $3.604 a week ago; and up 5 percent from the same period a year ago.
Pickens said the only way to bring down gasoline prices would be to introduce "natural gas into the mix."
Many trucking companies are adding natural gas vehicles to their fleets. But equipment costs can run at least $25,000 more than a standard diesel truck, according to the American Trucking Associations — not to mention that natural gas fueling stations are not as abundant.