Posted: January 29, 2008

Three billion, famed investor Jim Rogers pointed out during a recent interview with EnergyTechStocks.com, is the number of people “who weren’t even in the game” in the 1970s, the last time oil prices reached record highs.

On top of that, said the creator of the Rogers International Commodities Index (RICI), in the 1970s there were huge amounts of oil that people knew were eventually going to come on line, whereas today the world’s oilfields are in a state of decline.

Finally, Rogers emphasized, despite their rapid economic development, per capita oil consumption in China and India is still only a fraction of that of South Korea and other developed Asian nations.

Put it all together, Rogers indicated, and it should be clear that the bull run in oil is far from over. “It doesn’t look like $90 to $100 will do it,” he said when asked how high oil prices might have to go to dampen surging demand.

Speaking by phone from Singapore, Rogers didn’t predict how high he thinks oil prices will go, but in emphasizing that Asian oil demand hasn’t even gotten started yet, he indicated clearly that he thinks prices could go a lot higher in coming years. “Why not?” he said during a discussion of whether oil prices might hit $200 or possibly even $300 a barrel during people’s lifetimes. He jokingly added that at $200 people will drill on the White House lawn, while at $300 they’ll drill at Buckingham Palace.

Rogers said that one of today’s big hopes – biofuel – has two big drawbacks: it takes too much energy and too much water to produce. In discussing technological changes such as the plug-in electric hybrid vehicle, which some say will relieve the stress on oil supplies, Rogers reiterated a point he often makes, namely, that all commodity booms eventually end. But he added that he doesn’t see big changes coming soon, and that the electricity for all those plug-in vehicles will have to come from somewhere.

Ten months ago Rogers told a Credit Suisse Asian investment conference that current per capita oil consumption in China is about one tenth that of South Korea. In the interview he noted that India’s per capita consumption could double and it would still be only one tenth of South Korea’s. “It is amazing to me,” he told conference attendees, “how many people don’t understand this (Asian energy demand). It’s something we need to understand because it’s going to change the world as we know it.”

Tomorrow, January 30, Part 2 of Rogers interview – Get ready for thousands of new Commodity Funds