DO YOU THINK GAS PRICES WILL HIT $3 A GALLON IN THE U.S.?
They could go beyond $3. We're pretty close to peaking on what the oil industry can produce worldwide. It's hard to add production, and we're also dealing with decline curves on some of the big fields. All the refineries around the world are running at full capacity. You have demand going up, and you don't have the refinery capacity to take care of it.
WILL OPEC'S DECISION TO RAISE ITS OIL PRODUCTION MAKE ANY DIFFERENCE?
I think that there's not much more production to come from OPEC. They're basically maxed out. They keep saying they're going to produce more oil, and it doesn't make that much difference.
WHAT ABOUT UNTAPPED OIL RESERVES IN CANADA?
There's no question that tar sands in Canada are probably the largest source of oil available to the U.S. over a long period of time. There's as much oil in the tar sands probably as there is in Saudi Arabia. The problem is, there's a huge capital requirement to develop that. It's really mining oil, not producing it in a conventional way. Consequently, only about a million barrels a day come out of the tar sands. And it takes several years to ramp up that production.
DO YOU THINK THAT AS OIL PRICES RISE, CONSUMERS WILL FIND NEW WAYS TO CONSERVE, LIKE BUYING MORE HYBRID CARS?
Yes, I think the consumer is going to deal with the price of gasoline, probably in several ways. One would be on a new car purchase. A hybrid would have to be a prospect. Two, they'll cut back on their driving. But remember that the price of gasoline in Europe is $5 a gallon. We've had the lowest price for gasoline consistently as long as I can remember.
WILL THE GASOLINE AGE SOON BECOME A THING OF THE PAST, LIKE THE STONE AND BRONZE AGES?
We'll be out of the hydrocarbon era before we get to 2100. We'll phase in other forms of energy by 2050. We've got to use hydrogen someplace in there. For the short term, we've got to use more of our coal reserves in the U.S., and I would suppose we'll go back to looking seriously at nuclear.
DO YOU THINK WE WENT TO WAR IN IRAQ BECAUSE OF ITS OIL FIELDS?
I don't think for a minute we went to Iraq for oil. It just so happened that it had oil. But I think we'll come out of the Iraqi situation with a call on their oil at market price.
DOES IT BOTHER YOU THAT EVERYONE KEEPS REFERRING TO YOU AS A CORPORATE RAIDER?
To me, that was always an unusual way to identify somebody who had gone in and invested a lot of money in a company. I always saw myself as a large stockholder trying to make a difference. I wasn't raiding anybody.
YOU'VE MADE MORE MONEY IN THE PAST FIVE YEARS THAN IN THE PREVIOUS 70. WHAT'S YOUR SECRET?
I think I have more patience now than I did in the past. Maybe it's luck. I don't know. We're managing $675 million in our two hydrocarbon funds and over $1 billion in all of our accounts. Our commodity fund is up 150% this year, and our equity fund is up 27%.
I HEAR YOU'RE A FITNESS FANATIC. HOW OFTEN DO YOU WORK OUT?
Last year I averaged 24.4 days a month.
WHAT KIND OF GAS MILEAGE DOES YOUR CAR GET?
Probably 15 to 18 miles a gallon, but I have a five-year-old BMW with 35,000 miles on it, so I'm not a big factor in the gasoline market.