Pickens was one of several speakers at the Greater Phoenix Chamber of Commerce event held to address energy security.
It's the second Phoenix appearance for the Oklahoma-born tycoon in as many months as he makes near-daily pitches across the country to increase the use of wind for electricity and natural gas to run vehicles, both technologies that he has a stake in developing.
He said that the dependence on foreign oil to meet nearly 70 percent of U.S. fuel demand threatens security because the nation sends so much money to other countries.
"We're paying for both sides of this war," he said. "We pay them (for oil). They pay the terrorists to get them off their backs. And we fight the terrorists."
Pickens often cites the fact that the United States contains 3 percent of the world's oil reserves but uses 25 percent of the supply.
He says he favors using all domestic energy options, including Arizona's solar power, but that the government must step in to help the country reduce oil imports.
"Drill (for oil), sure, but that is not going to solve the problem," he said. "This oil geologist has been around a long time. I don't care who you meet, nobody's drilled as many dry holes as I have."
Pickens is trying to build a huge Texas wind farm and has a stake in a natural-gas-refueling business.
He said that using natural gas for transportation, starting with semi-trucks, will give the nation 20 or 30 years of fuel until better technology is developed.
Much of the current U.S. supply of foreign oil comes from Mexico and Canada, but the majority of oil reserves are in places such as the Middle East, which Pickens said will exert increasing influence over the United States if new fuel sources aren't developed.
"We are in a bad spot today," Pickens said. "We will be (a) dead duck by 2018 if we don't come up with a plan."
Col. Dave Belote, a commander from Nellis Air Force Base in Nevada who commanded an air component in the war in Iraq in 2003, followed Pickens' presentation and said that about three-fourths of the world's oil production comes from places the military considers "unstable."
Belote, emphasizing that he was speaking for himself, said he agreed with Pickens' message of risk.
"We are in nearly perfect G with what we are saying," Belote said, using fighter-pilot slang that means in perfect alignment.
"This becomes a security issue if so much of what we depend on comes from unstable sources."
Belote gave a presentation that highlighted how the Defense Department is focusing on reducing its energy demand and using alternative energy.
That includes a massive solar array at Nellis, which can supply enough electricity when the sun shines to power more than 3,500 homes.
"We make energy a consideration in all that we do," he said.
Many people attended the half-day session for a chance to see Pickens and said afterward that they support his plan.
"I was impressed," said Rick Wiley, a vice president with Essco Wholesale Electric Inc. in Chandler, who worked in the Houston oil and gas industry for 20 years. "That's what I'm here (in Arizona) for, to look at alternative energy."
Others agreed.
"We're sitting on this huge natural-gas resource that we could be using more than we are," said Janet Parisian, a research assistant helping a local author with a book on energy.
"To get off foreign oil is so important for our country," said Marsha Falco, CEO of Set Enterprises Inc. in Fountain Hills, which makes card games.
In his introduction of Pickens, Arizona Public Service Co. Executive Vice President Steve Wheeler referred to his plan as "elegant" and "gutsy."
"Whether you agree or disagree with his plan, you have to applaud his grit," he said. The likelihood of President-elect Barack Obama promoting alternative energy once he takes office surfaced during the talk.
Obama's support seems all the more likely following his appointment this week of Nobel Prize-winning physicist and alternative-energy advocate Steven Chu as Energy secretary. Chu is director of the Lawrence Berkeley National Laboratory.
Pickens said he is glad Obama won the election. He emphasized that while he believes in global warming and realizes his plan would help address that phenomenon, his No. 1 concern is security.
"We've seen the enemy, and it is foreign oil," Pickens said.