I am not sure this country should follow the advice of a man that has lost over $2 billion so far this year. But then again, some of the nation’s most powerful men have lost far more than that in just the past few weeks.

If you spend any time watching your living room television set, you have seen T. Boone Pickens discussing his proposed energy plan. The 80-year old has spent over $58 million of his own money to tell the nation it must lose its dependence on foreign oil.

What the white-haired oil barren does not tell you is that his money is not where his mouth his. While Pickens was telling you and I to fund his $100-billion idea, the fund he manages, BP Capital, was invested heavily in crude. And thanks to Pickens’ investing decisions, the fund has dropped in value by over 60% so far this year.

It is no wonder the investing firm’s phones are ringing off their hooks with folks looking to pull their money out of the fund. About half of BP Capital’s investors want out of their positions. Their capital withdraw has taken the fund’s size down to just $400 million.

It is a strong blow to the oil maverick’s ego.

Pickens promises to make the $2 billion back, but it is going to be much, much harder now that he has less funding to work with.

Should have known better

Investing in the energy business is a hard racket. After all, it is one of the most cyclical industries out there. But with decades of experience and several boom-to-bust cycles under his belt, one would expect Pickens to be able to avoid his current situation.

With so much negativity surrounding the investor and his picks, it will be hard for folks to get onboard with his newly proposed plans. As oil prices drop with the slowing economy, expensive prospects like wind, geothermal, and solar power are going to look far less attractive than they did when Pickens started his campaign.

While Pickens is pushing his alternative-energy agenda on the mainstream networks, his philanthropy is much more indicative of the investor’s true thoughts.

Instead of adding more money to his energy investments, Pickens is donating it to his beloved Oklahoma State and its football team. He just wrote a $65 million check earmarked to help finish the school’s football stadium.

Plus, Pickens said he would be returning the $125 million he managed in a hedge fund for the school. When he started the investment, it was worth $165 million.

Oh well, it is the thought that counts.

Source: T. Boone Pickens shows his cards

Conservatively, plan for US$200/barrel by 2010, but don’t be surprised if a recession somewhere drops price back to US$100, for a short while, or sudden war in the Middle East sends prices skyrocketing.

Expect the fundamentals of fading supply growth and growing demand to push prices ever higher in the 5 year horizon, perhaps well beyond US$300/barrel.

In May of this year Goldman Sachs energy strategist Argun Murti famously made his oil price prediction that the black goo would “super-spike” past $200 in six months to two years’ time.

Turns out Murti knows a thing or two about the oil price prediction game. In 2005 he correctly predicted — when oil was at about $55 a barrel — that it would pass $100, which it duly did in January.

“Murti is getting the last laugh,” says Justice Litle in Taipan Daily. “When he first predicted oil could reach a $105 a barrel, way back in March of 2005, oil was trading below $60. The prediction was scorned and laughed at, even as it caused a bump in crude prices… some thought it was just a Goldman Sachs publicity stunt.

“But it was no stunt. Murti’s call was dead right, and all the naysayers were wrong. For the past three years, many have been predicting that the bottom would fall out for oil prices. As crude passed through each new threshold — $70, $80, $90, $100 — there were loud drumbeats for how the price of crude would collapse ‘any day now.’”

Another oil price prediction that is proving scarily accurate is Keith Fitz-Gerald’s forecast that oil prices will reach $187 a barrel within three years. Read on here to find out why Keith thinks oil is heading for $187 a barrel and why the energy ‘experts’ have it wrong again.

Compared to $200 in two years, Fitz-Gerald’s $187 per barrel prediction seems quite conservative.
For more about oil price projections and Peak Oil, visit our Peak Oil Guide.