Thursday, July 29, 2004

This is the guy!

I mentioned in my previous post that I'd heard 'this guy' talking on CSPAN-radio about the impending depletion of the Saudi oil field. Well, here's an article about him and the claims he's making. Sounds legit to me...

Choice bits:

When oil prices have doubled to $80 and a second Great Depression threatens global political stability, our president will assemble a 9/11-style commission to explain the intelligence and policy failures that led to the crisis. The verdict will be familiar: The stunning blow to the world economy brought about by the sudden, unexpected depletion of fossil fuel should have been anticipated and prevented.

When that day comes -- in five years or perhaps 20, who knows -- many of the key exhibits will have been penned by Matthew Simmons, a Houston energy analyst and banker at Simmons & Co. International.

Simmons is now shouting from the rooftops -- writing think-tank white papers, giving speeches and finishing a book set for publication next year -- that the world is quickly running out of affordable oil and gas, and that no amount of Middle Eastern pumping can bail us out.

While much of the so-called "peak oil" story is well known, what's news is Simmons' startling claim, based on personal analysis, that Saudi Arabia's pumping capacity is in decline.


He believes that production at these mature fields has peaked. While that doesn't mean they'll run out tomorrow, they're becoming much harder and more expensive to exploit efficiently. It's like a person getting older and suffering from arterial sclerosis: They slow down and become increasingly less capable. The Saudis are now using intense water-injection techniques to improve production, he says, a technique that can ultimately lead to catastrophic pressure failure. Aramco disputes his claim, but Simmons notes correctly that its principal answer comes down to an Enron-like "Trust me." There's no solid independent data source of Saudi oil production. "A lack of verified data leaves the world in the dark," he told the Hudson Institute.

More, much more at link.


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