T. Boone Pickens States We Have Hit Global Conventional Oil Peak - AP

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DOHA, Qatar — Legendary Texas oilman T. Boone Pickens sees today's stubbornly high oil price as evidence that daily global production capacity is at — or very near — its peak. If demand for crude oil rises beyond the current global output of roughly 85 million barrels per day, Pickens told The Associated Press, prices will rise to compensate and alternative sources of energy will begin to replace petroleum.

"If I'm right, we're already at the peak," Pickens said earlier this week in Doha, on the sidelines of the Forbes magazine CEO conference. "The price will have to go up." The 78-year-old former wildcatter, who now heads the Dallas-based hedge fund BP Capital, is credited with a history of prescient predictions about the direction of oil markets. His bets have paid off handsomely. BP Capital's returns have exceeded 800 percent since 2001, he said.

Still, most industry and government analysts are far less pessimistic than the straight-talking Texan. Most believe petroleum will be a growing energy source for decades. The U.S. government expects oil demand to rise to 120 million barrels a day by 2030 and says a peak in output — the point at which half of the world's reserves are depleted — won't arrive until mid-century. Forbes publisher Steve Forbes challenged Pickens' assumptions during an exchange in the conference, saying political — not technological, or geological — roadblocks stood in the way of increasing the world's oil output. With the right incentives in places such as Mexico more oil could be brought to market and prices could drop, Forbes said.

Pickens responded by saying that Mexico is a declining producer of oil, as are most other countries, naming the United States, Norway, Britain, Canada and soon, Russia. "The world has been looked at," Pickens told Forbes. "There's still oil to be found, but not in the quantities we've seen in the past. The big fields have been found and the smaller fields, well, there's not enough of them to replenish the base." Pickens predicted oil prices will rise this year to an annual average of around $70 per barrel. On Wednesday, prices settled at $61.79 on the New York Mercantile Exchange.

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