Brian O’Keefe writes: If Matt Simmons is right, the recent drop in crude prices is an illusion - and oil could be headed for the stratosphere. He’s just hoping we can prevent civilization from imploding.
Matt Simmons is as perplexed as anyone that it has fallen to him to take on OPEC, Exxon, the Saudis, and all the other misguided defenders of conventional wisdom in the oil patch. Why should one investment banker with a penchant for research be required to point out what he regards as the obvious - that from here on out, oil supplies can’t meet demand, and if we don’t act soon to solve this crisis, World War III could be looming?
Why should a man who scorns most environmentalists have to argue that locally grown produce and wind power are the way of the future? Why should a lifelong Republican need to be the one to point out that his party’s new mantra - “Drill, baby, drill!” - won’t really fix anything and that his party’s presidential candidate is clueless about energy? That the spike in oil prices earlier this year wasn’t a temporary market anomaly and the recent retreat in prices is just a misleading calm before a calamitous storm? That we’re headed toward $500-a-barrel oil?
“I find it ironic that here we have the biggest industry on earth, and I’m one of the few people to figure out that we have a major problem,” he says, in his confident if not quite brash way. “And I did it all in my spare time. How stupid and tragic is that? I shouldn’t be one of the only folks that actually has a handful of ideas of how we can keep from blowing each other up and get through this.” …
Simmons was transformed overnight from an influential industry expert to an A-list pundit by the publication in 2005 of his book “Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy,” a fairly technical read which argues that Saudi Arabia’s oil supplies are much more limited than everyone thinks.
Since then he has moved to the forefront of the peak-oil movement - a once fringe but now growing contingent of oil industry veterans, independent consultants, investors, and academics who believe that world oil production is at or near an inflection point, after which it will fall inexorably and fail to meet projected future demands. According to Simmons, we have already passed that peak. And while we’re not going to run out of it anytime soon, the era of easy oil is over, and the world is about to enter a period of convulsive change. (Hint: Learn to garden, and buy some comfortable walking shoes.)
The soaring price of crude - it has risen from below $20 a barrel in 2002 to as high as $147 earlier this year - has helped thrust Simmons further into the spotlight. He was one of the main voices, for instance, in the recent oil-shock documentary “Crude Awakening,” and his book has now sold more than 100,000 copies. His willingness to make bold predictions about how high crude may go has made him an A-list guest for cable TV news programs and a go-to source for newspaper reporters covering oil and gas. In 2005, when oil was $58 a barrel, he predicted it would be at or above $100 within a few years. Now he sees it climbing to $200, $300, or higher. “There really is no roof on oil prices at this point,” he says. …
“John McCain is energy illiterate,” Simmons is saying. “He’s just
witless about this stuff. As a lifelong Republican, I’m supporting
Obama.” A dozen oil and gas men sitting around a conference table in
Lafayette, La., chuckle nervously as he continues. “McCain says, ‘Oh,
we’re going to wean ourselves off foreign oil in four years and build
45 nuclear plants by 2030.’ He doesn’t have a clue.” …
McCain’s midsummer move to begin campaigning on a platform of more
offshore drilling has only hardened Simmons’s position. “What a
hypocrite,” says Simmons, who supported McCain’s rival Mitt Romney in
the primary - no surprise given Simmons’s history with the Romney
family. “Here’s a man who for at least the past 15 years has
strenuously, I mean strenuously, opposed offshore drilling. And now
it’s ‘drill, drill, drill.’ And he doesn’t have any idea that we don’t
have any drilling rigs. Or that we don’t have any idea of exactly where
to drill.” (As for McCain’s running mate, Sarah Palin, Simmons says:
“She’s a very colorful person, but I don’t think there’s a scrap of
evidence that she knows anything about energy.”)
For the
record, Simmons has been advocating more drilling off the coast of the
United States since the early 1990s, but now he says that treating it
as our salvation is misguided. “I’m not saying we shouldn’t do it,”says Simmons. “We should, and the sooner the better. But we shouldn’t
think that it’ll have any impact for a decade or two.” The exception,
he says, is the reservoir in the hotly debated Arctic National Wildlife
Reserve. “ANWR,” he says, “is the only place that we could drill right
now and it might actually make a difference in a year or two.”
As
for some other currently voguish sources of fuel coming to the rescue,
he’s dismissive. Oil shale? “Buck Rogers stuff. It just can’t work.”Ethanol? “It’s a joke. The numbers just don’t add up.”
Simmons
believes that a radical change in the way we live is inevitable. “We
should basically be going back to creating a village economy, so that
we really reduce the energy intensity of how we live,” he says. “We
need bigtime conservation, not feel-good conservation. Make things
where they’re used. You’ll end long-distance commuting, and we have the
tools to do that now with webcams. Grow food locally. Grow food in your
backyard. If they’re not commuting, people will have time to do that.” (09/25/08)
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