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T. Boone Pickens loses $1 billion on wrong oil bet

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The large hedge fund run by Texas energy king T. Boone Pickens has lost $1 billion this year. He bet that oil would go up. Instead, it went down. That makes his push for wind power and the use of natural gas to run cars look a little silly.

According to The Wall Street Journal," the downturn in energy has blindsided the industry veteran, leaving one of his hedge funds that focuses on energy stocks down almost 30% through August." Pickens says that oil will move back up unless the global economy goes into a very deep recession.






The loss make Pickens look like a fool. He has been lobbying both in Congress and in public that high oil prices are killing the U.S. economy. The U.S., he says, needs to move its energy consumption to natural gas and wind energy. His big push is to cut America's dependence on foreign oil.

His plan relies on converting the auto industry's manufacturing process to one that builds cars that use natural gas. The industry is moving toward electric power. He also wants to set up windmill farms all over the U.S. How these will connect into the current electricity power grid still has to be worked out. In other words, it may not work at all.

If oil prices keep going down, oil may still be the least expensive way to power cars and industry. The huge cost of turning the nation's infrastructure to operating on other energy sources is simply too great. And Pickens is losing his credibility as an energy expert if he can't even forecast the price of crude.

Douglas A. McIntyre is an editor at 247wallst.com.

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Last updated: July 06, 2009: 09:50 PM

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