Without Matt Simmons: Has Peak Oil, Well, Peaked?
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By Michael Corkery
Matt Simmons, the maverick investment banker who championed the concept of peak oil, died of a heart attack in a hot tub in Maine. He was 67.
Simmons is best known for raising the alarm, in books, in lectures, television interviews and to anyone who would listen, that the world’s oil reserves had peaked.
The concept of “peak oil” wasn’t new when Simmons wrote Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy, in 2005. In fact, peak oil was first posited by a geophysicist named M. King Hubbert in the 1950s who predicted that world oil supply would peak in 1995.
But Simmons helped to being the theory to the mass media, after traveling to Saudi Arabia in 2003 to research that nation’s secretive data on oil reserves, or the amount of oil able to be pumped out of the ground. His book became an instant classic among Conspiracy theorists. It gained mainstream exposure when, in the summer of 2008, crude-oil prices began spiking to $147 a barrel and American drivers were getting crushed at the gas pump.
“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,’’ Simmons told Fortune in September 2008. “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’ stood out because of his street credibility, not with environmentalists, but in the oil industry, where he worked for decades as an investment banker. He started his own firm Simmons & Co in 1974. He espoused maverick views, but he was still of the industry establishment (admired by T. Boone Pickens and an energy adviser to George W. Bush)
It was against the backdrop of peak-oil concerns that the industry underwent a consolidation wave, as companies clamored for greater share of a finite resource, and oil giants made plays for natural gas, such as Exxon Mobil’s acquisition of XTO late last year.
Simmons was back in the limelight this spring when BP oil’s rig in the Gulf of Mexico exploded. He went out on a limb (his critics say too far out) by predicting in June that the spill would cause BP to go bankrupt and that “if a hurricane comes and blows this to shore, it could paint the Gulf Coast black.”
In recent weeks, BP has capped the leak and independent scientists have found that environment damage from the spill has been less than initially feared. (Simmons supported offshore oil drilling in 2008, but said Americans need to change their energy-consumption habits because even offshore sources wouldn’t produce enough oil to sustain world demand.)
Peak oil remains hotly contested and the information about reserves from less than forthcoming from such oil-rich nations as Saudi Arabia and Nigeria is incomplete, to say the least. Regardless, peak oil has lost one of its most eloquent adherents.