US Could Be Using More Natural Gas: Pickens

The U.S. has more natural gas than any other country but must do more to tap its potential, billionaire investor T. Boone Pickens told CNBC's "Closing Bell" on Monday.

"America has all at once found itself the cheapest energy in the world," Pickens said. There was uncertainty just 10 years ago about whether the U.S. had enough natural gas to be independent, he said.

"Today, we have more natural gas than any country in the world," he said, adding it's the cheapest fuel in the world. "We are using it, but we could be using it in a whole lot of other places."

Transportation is one opportunity for natural gas. Only 200,000 vehicles worldwide used natural gas a decade ago, Pickens said, and now that number is about 20 million. "But the U.S. has been slow to follow," he said.

The trucking and rail industries are starting to use more natural gas because the fuel is so cheap, he said.

Pickens also said the environmental concerns about fracking (a method of extracting natural gas) are overblown.

(Read More: Pressure Mounts on US to Export Natural Gas)

Washington must do more to stoke demand for natural gas in the U.S., according to Pickens. "Use the cleaner cheaper fuel here—don't export it and import less oil," he said.

Investors who think it's time to play natural gas could look at Chesapeake Energy, Exco and Sandridge, he said. For oil investments, Pickens points to Continental Resources and Pioneer as companies that are doing "extremely well."

By CNBC's Justin Menza; Follow him on Twitter @JustinMenza