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CNBC EXCLUSIVE: CNBC TRANSCRIPT: CNBC'S JIM CRAMER SPEAKS WITH T. BOONE PICKENS, CHAIRMAN & CEO OF BP CAPITAL, TODAY ON CNBC'S "MAD MONEY W/JIM CRAMER"

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WHEN: TODAY, FRIDAY, JUNE 4TH AT 6PM & 11PM ET

WHERE: CNBC'S "MAD MONEY W/JIM CRAMER"

Following is the unofficial transcript of a CNBC EXCLUSIVE interview with T. Boone Pickens, Chairman & CEO BP Capital, today on CNBC's "Mad Money w/Jim Cramer" at 6PM & 11PM ET.

All references must be sourced to "Mad Money w/Jim Cramer."

JIM CRAMER, host: And with that in mind, I'm thrilled to have him on the show. So let's find out what the future looks like for natural gas and for oil, for that matter. Mr. Pickens, it is an honor to have you back on MAD MONEY.

Mr. T. BOONE PICKENS: Good. Thanks, Jim.

CRAMER: Are we about...

Mr. PICKENS: But, you know, we've got to--we've got the legislation in place and it is going to happen. Senator Reid, the majority leader, told me, he said he had to have an energy bill this year, and that's going to happen. I do think I owe you $100, though, because I said we would have it passed by Memorial Day and that didn't happen. But we did get it filed before Memorial Day, so...

CRAMER: Well, I'm going to go double or nothing.

Mr. PICKENS: ...I owe you--I owe you...

CRAMER: I'll go double or nothing to the end of 2010.

Mr. PICKENS: OK, 2010? All right, you got it.

CRAMER: All right, terrific. Terrific. OK. I don't know whether you had a chance to hear the president the other day speak at Carnegie Mellon, but he directly said tapping our natural gas reserves. Am I parsing this too closely, or was that a big breakthrough?

Mr. PICKENS: Well, that's the second time he said it in 10 days, and that's good. He's starting to understand it's the only resource we have in America that will compete against diesel. And it's cleaner, it's cheaper and it's ours. And so it's--you know, we've got to use it. And it's all going to happen. It's going to happen all for the right reasons. But I'm not totally natural gas, you know that.

CRAMER: Right, right.

Mr. PICKENS: What I am is American. I'll take any fuel in America. So when you said something about Navistar and electric, great. I like the battery, I like--I'm even a guy that'll take ethanol. I'll take anything but OPEC oil, that's what I don't want.

CRAMER: Well, let's talk about the price differential. Natural gas, still under $5. You've always been a pretty good predictor of oil. Where do you see oil going and where do you see the differential between oil and natural gas?

Mr. PICKENS: Well, historically they hang around, actually, on a BPU equivalency basis, is 6-to-1. They sort of hang around in an area--if you've got $70 oil, you've got $7 natural gas. And natural gas has been so cheap because we have an--such an abundance of natural gas. But give you a reference point that's very good is one Mcf of natural gas equals seven gallons of diesel. They'll do the same work, they'll move the 18-wheeler the same distance. And so when you look at one Mcf, you're looking at like $4.50, and seven gallons of diesel is $21.00. So here again, it is a steal for America to switch our heavy duty over to natural gas.

CRAMER: Now, let's just switching for a moment to the tragedy in the gulf. I happened to be on "Morning Joe," Joe Scarborough's show, the other day, and he said, `Boy, I wonder what Boone Pickens would do if he were down in the gulf, I wonder what he'd be saying about our natural gas and our oil future.' What would you be doing, Boone, if you were--if you were trying to handle this terrible spill?

Mr. PICKENS: Well, I've had--I've had some experience. I haven't had any experience with a blowout like that. And it's--but I can tell you that BP and Thad Allen over in the Coast Guard, they're doing everything they can to get it fixed. And I would say leave them alone, let them work it out, let them solve the problem and then investigate as to whether there was some mistake made. And if you want to know the details of it, you can find out. But not investigate while they're trying to fix the problem. Leave them alone.

CRAMER: Do you think that it's going to be--I know time frame is very difficult to judge. But given the difficulties, do you think that in the end it's going to have to come down to that relief well and the possibility even that they won't be able to hit that same area with a relief well?

Mr. PICKENS: Oh, Jim, there's never been--the solution has never been anything but the relief well.

CRAMER: Yeah.

Mr. PICKENS: All these other things they're doing, they're trying their best to come up with ideas that could give them a little time. But all they're doing is, you know, there's going to be time here until a relief well gets down, and that's probably August. If you're lucky, it'll be August.

CRAMER: Right.

Mr. PICKENS: But it could go beyond that. But the relief well's the only way you're going to kill this well unless you got lucky and somehow that it bridged and shut off. But that's one in 100 or one in 1,000.

CRAMER: Wow.

Mr. PICKENS: So the relief well's the only way out.

CRAMER: All right, Boone, give me a scenario where people are going to begin to understand in Washington that coal, when you dig it out, miners have had tremendous problems getting coal out of the ground in terms of health and then what it does to people when they breathe it. We now see the tragedy in the gulf, offshore drilling. Doesn't this all logically lead to the safest drilling method, the safest extraction method, which also happens to be natural gas?

Mr. PICKENS: Well, I'm not going to--listen, I'll never give up on the coal miners, I'll never give up on the--on the oil and gas industry. We're going to need all of the energy that we can get over time. I'm not talking about tomorrow. There's plenty of natural gas today. But if you extend out 10 years or 20 years on, we're going to need it all. We just need to get safer than what we're doing, we need to be cleaner in how we're--how we're using this energy. But natural gas is here, it's available. You can do it. It's not hard to understand. We're going to go down as the--as the dumbest crowd that ever showed up...

CRAMER: Right.

Mr. PICKENS: ...if we're going to sit here and continue to import oil from OPEC when we have natural gas. It is cleaner, it's cheaper and it's ours. We--the trade deficit today, two-thirds of our trade deficit is the purchase of oil. That does not need to happen. Meaning that if we don't--if we--if we start using our own resources, my God, you know, now we're creating jobs, we're keeping money at home. The oil has cost us $1 billion a day right now. And if we don't do anything, in 10 years we will be paying 3 or $400 a barrel for the oil.

CRAMER: Three to $400 a barrel. Do you think that could happen?

Mr. PICKENS: I think--absolutely think it--there's no question. If you go back and look at the period 2003 to 2008, OPEC's revenues were $250 billion in '03; five years later in '08 they were $1 trillion 250 billion, five times what they were in '03.

CRAMER: Wow. All right, let me ask you one last question. I'm trying to figure out what these big international oil companies know when they buy up in the Marcellus Shale and all these other areas, that most--I'll say the analysts don't know and the government doesn't seem to know. I mean, the other day we saw Royal Dutch pay $4 billion for a Marcellus property. Now, these guys are much--must be looking much more long-term, because even if we get this--the Power Act through, it wouldn't explain all these purchases.

Mr. PICKENS: Well, look at what--look at what Shell did. Yes. Chevron hasn't made a purchase yet...

CRAMER: Right.

Mr. PICKENS: ...but probably will. But look at what--look at what Exxon did, bought XTO for 41 billion. Well, that's, you know, that's chump change for Exxon. Forty-one billion's nothing. And so here what's going to happen, the majors are moving back into the United States. That's good. That is good. I want them back. I want them spending money here. They will figure out a way to get more recovery out of the shale gas, and that's good. They've got excellent research and everything else.

CRAMER: Right.

Mr. PICKENS: So it all works in our direction. I'd like for the majors to come on board and say let's use natural gas for transportation fuel. They have not done that yet.

CRAMER: Right.

Mr. PICKENS: Hopefully they will.

CRAMER: Well, Boone Pickens, you are a delight to have on the show. You just keep the good fight. You've made us a lot of money here. The natural gas stocks have been great performers. You're absolutely right, all sorts of energy, as long as it's domestic, is the right thing to do. Great to see you, sir. Thank you for coming on MAD MONEY.

Mr. PICKENS: Good. Thanks, Jim. Thanks for having me.

CRAMER: Absolutely.

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