The Handwriting on the Wellhead?
By EV World
One doesn't usually associate a prophet of gloom as wearing an pinstripe suit and hailing from Houston, Texas, the oil capital of America. But just because Matthew Simmons doesn't wear a hair shirt or carry a sign reading, "Repent, the end is near", doesn't mean his prognostications aren't any less troublesome.
EV World has followed the public appearances of the founder and chairman of Simmons International, a leading energy investment banking firm, for sometime now, finally meeting him in person in the Spring of 2004 at Global Windpower 2004 in Chicago. It seems that the higher the price of oil, the more Simmons is in demand as a speaker, one of the most recent events being a more than hour long presentation on July 9, 2004 at the Hudson Institute in Washington, D.C.
|Fortunately, CSPAN was on hand to record the event and has archived a streaming video copy of it.||
Even if you are not conversant in oil industry terminology, you'll find his presentation enlightening and, like an Old Testament prophet, just a little worrisome, especially if his analysis of the state of Saudi oil fields is correct.
Clearly Simmons has done his homework and knows the lingo, though oil economists and the industry in general tends to dismiss his warnings, asserting there is still lots of oil to be extracted, enough to carry us well into the middle of the century. Simmons shrugs off this criticism with the acknowledgement that he hopes he is wrong, though he continues to urge for a global accounting of how much oil has been extracted, what the current rate of extraction is and how much recoverable oil is estimated to remain in the ground. He also calls for a global "Plan B" in case his predictions turn out to be right.
Interestingly, in the Q&A session at the end of the address, an unidentified individual stands up and tells Simmons and the audience that his group has done a similar analysis of Iraq's oil fields. Like the Saudi fields, Iraq's also appear in serious trouble.
He concludes by stating, "I just think we have a lot of big changes we have to make. If we make them now and then it turns out that we didn't have to, it's kind of like our preoccupation for the last fifty years with thermonuclear war - we didn't have one. I'm glad it worked."
As we go online with this article, the Energy Institute in the UK reports that global oil production is going flat out and that there is essentially no reserve capacity any more in the event of a major disruption in Russia, Saudi Arabia or Venzuela. Oil futures closed at a record $43.80 a barrel on Friday, July 31, 2004.
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