Matthew Simmons

Matthew R. Simmons
Occupation(s)	Investment Banker, Author
Children	5 daughters

Matthew Simmons, founder and chairman emeritus of Simmons & Company International, is a prominent oil-industry insider and one of the world's leading experts on the topic of peak oil. Simmons was motivated by the 1973 energy crisis to create an investment banking firm catering to oil companies. In his previous capacity, he served as energy adviser to U.S. President George W. Bush.

Matthew Simmons believes the Club of Rome predictions are more accurate than usually acknowledged . Simmons is an adviser to the Oil Depletion Analysis Centre. He is a member of the National Petroleum Council and the Council on Foreign Relations. He believes a careful assessment of Saudi Arabian oil reserves is the most significant issue shaping petroleum politics.

Simmons is the author of the book Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy. His examination of oil reserve decline rates helped raise awareness of the unreliability of Middle East oil reserves as the published reports have never been verified.

Saudi Arabian oil reserves

In his book, Simmons argues that production from Saudi Arabia, and especially from Ghawar, the world's largest oil field, will peak in the near future, if it has not done so already. Simmons bases his case on hundreds of internal documents from Saudi Aramco, professional journals, and other authoritative sources.

"Twilight in the Desert" has been criticized for "turning benign technical matters into crisis-level evidence" and making "numerous technical gaffes", such as misinterpreting fuzzy logic as meaning "fuzzy numbers" (his use of the computer science term was proper but it did not really advance his argument), "dew point" as meaning the pressure that a well stops producing, citing obsolete data on water cuts, and assuming that a pressure drop in a vertical wells has the same implications as in a multilateral well. He is also accused of ghost references and misrepresenting sources.[1]

Oil price wager

In August 2005, Simmons bet John Tierney and Rita Simon, the widow of Julian Simon, $2500 each that the price of oil averaged over the entire calendar year of 2010 will be at least $200 per barrel (in 2005 dollars). This wager has been dubbed "The Simmons-Tierney Bet." Unless there is a significant unforeseen event, it is appears highly unlikely that Simmons will win this bet. However, the world-wide economic collapse created demand destruction that greatly decreased the demand for oil and thus reduced prices. This points out that Simmons theories do not take into account economic effects enough. However, his theories about the difficulties in increasing (or maintaining) production levels have not yet been disproved.

Ocean Energy Institute

Since Matthew Simmons works as an investment banker to the oil and gas industry, there are some that have put forward the theory that his doom-saying is merely a ploy to obtain more business for his business that finances oil and gas drilling rigs. However, Simmons appears quite sincere and has even founded a major alternative energy foundation, the Ocean Energy Institute. The Ocean Energy Institute researches and develops energy sources from the oceans such as wind energy and tidal energy. [2]

Appearances and Interviews

Simmons has made contributions to the films *PEAK OIL - Imposed by NatureThe Power of Community: How Cuba Survived Peak Oil (2006), The End of Suburbia, Crude Impact, and Crude Awakening: The Oil Crash, and appeared on *World Energy Television World Energy Video Interview, August 2008

Deepwater Horizon Oil Spill Hyperbole

Simmons has made various questionable comments and predictions regarding the Deepwater Horizon oil spill and BP's solvency, including:

• During a June 9th, 2010, interview with Fortune, Simmons claimed that BP would "have about a month before they claim Chapter 11". The comment initially contributed to a precipitous drop in BP's market capitalization. However, subsequent events, including BP's establishment of a $20 billion claim fund, have shown Simmons' claim to be highly unlikely, and BP's stock price has begun to recover.

• During a July 7th, 2010, interview on CNBC (which was around the date Simmons originally predicted BP would be filing for bankruptcy), Simmons claimed that scientists were reporting the flow rate from the oil spill was "spewing 120,000 barrels a day into the Gulf" and that there have been estimates that we have "lost oxygen for 40% of the Gulf of Mexico". He further claimed that the relief wells will not stop the oil spill.

• Also, previously, on May 26, 2010, Matthew Simmons was a guest on 'The Dylan Ratigan Show' on MSNBC, where he explained his reasons for believing that the Deepwater Horizon oil spill involved not only the leak being monitored by British Petroleum's video-camera-equipped ROVs [remotely operated vehicles], but another, much bigger leak, several miles away:

SIMMONS: ...when you look at the riser [on the live BP video], you realize that you're looking at a twenty-one-and-a-half inch circumference riser, and there looks like somewhere between a six and seven inch rip on the top. So the stuff coming out -- it looks like a lot, but I actually saw a white fish go through it and come out white. So I said, this isn't the same as this brown, gooey, orange stuff that they found in the plume seven miles away. And I still believe that what happened is that the riser blew off the wellhead, and it's hooked onto the rig; so you've got a mile of oil inside that that's pretty light concentrate. So that's what they're actually trying to get out. So it's not sure that -- luckily they placed the top kill correctly. But now they have to see if it will take mud. It probably will take mud. But then they shouldn't delude themselves that they've stopped the spill; they should now go and say, 'Let's figure out what the plume was all about,' because if THAT'S the hole, and the casing blew out, we have an enormous problem.

RATIGAN: ...so you're saying that the video we're all now looking at right now is not the only leak, is that what you're saying?

SIMMONS: That's a tiny leak, and what the scientists are saying watching this stain spread -- it's now bigger, I gather, than Maryland and Delaware, and several hundred feet thick, and it's gooey stuff -- that's NOT coming out of there; they think that it's flowing at 120,000 barrels a day. It would almost have to be that big to flow that wide.

RATIGAN: And where do you believe the second outlet is relative to what we're seeing on the video, Matt?

SIMMONS: What the research vessel found a week ago Sunday [referring to news reports of May 16, 2010] was this giant plume about six miles away, and then this huge layer of goo on the ocean floor... that's almost certain- I mean, maybe it's a natural fracture -- I think that's where the wellhead is.

Further reading

• Matthew Simmons, Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy 2005 ISBN 0-471-73876-X, The book has been translated into German and Chinese.

See also

• Richard Heinberg
• Jeremy Leggett
• Dale Allen Pfeiffer
• Peak Oil
• The Simmons-Tierney Bet

External links

Articles

• Matt Simmons discusses global trends on World Energy Television World Energy Video Interview, August 2008

• Simmons investigates latest data EVWorld interviews Matthew Simmons, Feb. 2008.
• Matthew Simmons calls on regional oil producers to curb output MEED.

• Matt Simmons discusses global trends on World Energy Television World Energy Video Interview

• Global Crude Supply: Is the Oil Peak Near? World Energy Magazine, by Matthew Simmons.
• Fixing Corrupt Investment Research: It's Not That Hard World Energy Magazine. Matthew Simmons.
• The Case for a Coming Gas Shortage World Energy Magazine. Matthew Simmons.
• Is the Petroleum Pricing System Out of Control? World Energy Magazine. Matthew Simmons.
• The Coming Saudi Oil Crisis
• more articles by Simmons

General

• Jim Jarrell's criticism of Twilight
• ASPO USA Peak Oil conference at Boston University, 27 October 2006
• Financial Sense Newshour: Matthew Simmons, 5 audio interviews: 6 August 2005 - 7 April 2007.
• The Economist: Face Value: Review of Matthew Simmons in The Economist
• Radio Broadcast: True News broadcast on June 28, 2010