Pickens: Cut drilling to boost gas price

Stop drilling: T. Boone Pickens says US must cut back on drilling in order to boost natural gas prices

Energy tycoon T. Boone Pickens on Wednesday argued that the only way to bolster US natural gas prices and cut the market's massive oversupply is to stop drilling, according to a report.

Pickens, 83, an outspoken champion of using natural gas for transport, made the comments after his company Clean Energy Fuels announced a deal with truck maker Navistar to make more natural gas vehicles and build more fuelling stations.

Natural gas prices fell to 10-year lows early last week, increasing the attractiveness of the fuel to power vehicles relative to diesel and gasoline, as record high supply swamps the market during one of the mildest winters on record.

But the widespread use of the fuel in transport will not move prices substantially. That is in the hand of producers, the billionaire corporate raider said, Reuters reported.

"The only way to get natural gas prices up is to stop companies drilling," Pickens said during a press conference to promote the Navistar deal, which advances his aim to break US dependence on oil for transport.

The US has enjoyed a drilling boom in recent years, but demand for gas has failed to keep up.

Chesapeake Energy and ConocoPhillips, whose earnings have suffered due to low natural gas prices, announced production cuts to help boost prices and beef up thin profit margins.

Natural gas futures bounced off their lows on the news, but have since trailed gradually downwards again.

Other companies have slowed drilling programmes in dry gas fields by moving rigs to more lucrative oil-based liquids plays.

Top natural gas producer ExxonMobil said on Tuesday that it doubled the proportion of its rigs drilling in liquids plays last year, though it has not actually shut in existing gas production.

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