T. Boone Pickens says global oil production has reached its peak

Legendary Texas oilman T. Boone Pickens sees today's stubbornly high oil price as evidence that daily global production capacity is at - or very near - its peak. If demand for crude oil rises beyond the current global output of roughly 85 million barrels per day, prices will rise to compensate and alternative sources of energy will begin to replace petroleum.

"If I'm right, we're already at the peak," Pickens said in Doha, on the sidelines of the Forbes magazine CEO conference. "The price will have to go up." The 78-year-old former wildcatter, who now heads the Dallas-based hedge fund BP Capital, is credited with a history of prescient predictions about the direction of oil markets. His bets have paid off handsomely. BP Capital's returns have exceeded 800 percent since 2001.

"The world has been looked at," Pickens told Forbes. "There's still oil to be found, but not in the quantities we've seen in the past. The big fields have been found and the smaller fields, well, there's not enough of them to replenish the base." Global consumers, led by the United States, have already burned through 1.1 trillion barrels of oil, or what Pickens described as nearly half of the world's estimated 2.5 trillion barrels of historic oil supply.

From now on, Pickens said, rising demand will be met by higher prices rather than ever-larger crude production. Alternative energy sources will begin to take a share of the energy market until the world evolves from a hydrocarbon-based economy to "something that's a mix of hydrocarbons and something else." Everything from nuclear, coal, wind, solar, hydrogen and biofuels stands a chance to assuage growing demand for energy, Pickens said.

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