Oil’s Cassandra dies but his questions live on
Peak Oil has lost its leading prophet with the death of Houston banker Matt Simmons. Since many nations refuse to share detailed oil data it may be years before his warnings of ebbing production are vindicated — or discredited. But his crusade for more information on supplies is as urgent as ever.
The founder of Simmons & Co added plenty of gravitas to the “peak oil” movement — which contains more than its share of wing-nuts. His 2005 book “Twilight in the Desert” took on the biggest oil producer of all, Saudi Arabia. Drawing on 200 technical papers, he concluded that the kingdom’s largest oil field Ghawar would soon top out. As a result, oil’s friendly giant would soon start to struggle to keep pace with rising oil demand.
Unlike the founding father of the peak oil theory, M. King Hubbert, Simmons was a financier and not a geologist. Thus his scientific grasp was sometimes questioned. Aramco’s former head of reservoir management, Nansen Saleri, quipped that he could read 200 studies on neurology and nobody would want him to perform brain surgery.
Recent developments have cast doubt on the notion that geology will be the key immediate problem. Advances in deep sea drilling have brought huge reservoirs within reach off the coasts of West Africa, Brazil and the Gulf of Mexico. As prices have risen, Canada’s trove of oil sands becomes economical to extract. And, politics permitting, huge reserves of cheap oil may be drilled in Iraq.
This does not invalidate Simmons’ arguments. With the fate of the global economy hinging on a reliable energy supply, it is dangerous to blindly trust big oil producers’ own estimates of their reserves. Any transition away from oil, after all, would need to be planned for decades in advance. In that respect Simmons’ quest for more information should not die with him.