Web Editor, Mad Money

If US energy policy continues on its present path, legendary oilman T. Boone Pickens told Cramer on Friday, the price for a barrel of crude could jump more than five times its present level in a decade.

Pickens was using OPEC revenues between 2003 and 2008 as a model, he said. Those revenues clocked in at $250 billion in 2003, but just five years later they had skyrocketed to $1.250 trillion, five times that of ’03.

“If we don’t do anything,” Pickens said, “in 10 years we will be paying $300 or $400 a barrel for the oil.”

The US is already paying $1 billion a day for crude, he said, and it accounts for two-thirds of the country’s trade deficit. That doesn’t need to happen, though. If the US used its own resources, Pickens thinks the move would lead to job creation, and those dollars would stay at home.

That’s why he’s so bullish on natural gas, a fuel that’s plentiful here in the US. So much so that Cramer called Pickens “one of the biggest boosters of natural gas out there.” But he endorses more than just that one commodity. As part of the Pickens Plan he announced back in 2008, he called for the utilization of all kinds of energy – wind, electric, even ethanol – as long as it was American.

“Anything but OPEC oil,” Pickens told Cramer. “That’s what I don’t want.”

But, of course, today’s discussion was largely about nat gas, as President Obama this week put the full weight of his office behind the commodity during a speech at Carnegie Mellon in Pittsburgh. Pickens took the statement to mean President Obama finally understands that nat gas is the US’s only viable competitor to diesel fuel, that nat gas is both cleaner and cheaper than crude and coal.

“And it’s ours,” Pickens said. “We’ve got to use it.”

To that end, he fully expects the NAT GAS Act presently in Congress to pass. He said Senate Democratic Majority Leader Harry Reid, of Nevada, told him he wanted an energy bill this year, Pickens said, “And that’s going to happen.”

If so, it’s about time. As Cramer pointed out, the major oil and gas companies – especially foreign firms – already have recognized natural gas’ importance, and they are buying up both smaller players and assets here in the States. Royal Dutch Shell joined in on the action just this week, paying $4 billion for a chunk of the Marcellus Shale.

But Pickens sees that as a good thing.

“The majors are moving back into the United States,” he said. “I want them back. I want them spending money here. They will figure out a way to get more recovery out of the shale gas.”

He hoped the majors would call for the use of natural gas in all transportation vehicles. Compared to the diesel being used now, nat gas is incredibly cheap. One thousand cubic feet of gas will do the same work for an 18-wheeler truck as seven gallons of diesel, but the gas costs just $4.50 per MCF while the diesel fetches $21.

“It is a steal for America to switch our heavy-duty [vehicles] over to natural gas,” Pickens said.

The conversation also touched on BP’s [BP 36.76 -0.40 (-1.08%) ] spill in the Gulf of Mexico. When Cramer asked what Pickens might do if it were his well that burst, he said that the company and the Coast Guard should be left alone to fix the problem. Any investigations into wrong doing should be held until after the well is sealed.

Pickens also said that a relief well was the only real solution that would work, not the “top kill” or any of the other ideas BP has tried so far.

“The relief well’s the only way you’re going too kill this well,” Pickens said, “unless you got lucky and somehow that it bridged and shut off.” But the chances of that are “one in 100 or one in 1,000.”

But Pickens doubted the relief well would be ready before August, “if you’re lucky.”