Matthew Simmons’ Latest Wake Up Call on Energy Downright Scary

by StockJockey

Saturday, July 12, 2008 - 1:24 pm

Matt Simmons, fresh from schooling Henry Blodget on the definition of peak oil, is making the rounds and getting his 2 cents in. The legendary head of Simmons & Company International turned a few heads yesterday on CNBC's Fast Money. His thoughts on tele-commuting and other topics make sense, and it is too bad nobody acted on his recommendations years ago, although the panelists looked bewildered by his most strident statements:

Fast Money July 11th

Simmons has not shown up to rip me a new one yet, but set the record straight with Blodget last month, clearing up confusion on the definition of Peak Oil:

You really should research your terminology before you drop it about in your articles.

“On the supply side, we don’t subscribe to the peak-oil view. We don’t think the world has run out of oil. “

Definition of Peak Oil:

“Peak oil, as part of the fossil fuel depletion, is the point in time when the maximum rate of global petroleum production is reached, after which the rate of production enters its terminal decline. “
source - wikipedia.org

Peak Oil is about the “Peak” in oil production… we sir have peaked, we did so in 2006. We are in what’s called an undulating plateau and will soon enter a irreversible decline in oil production.

We will NEVER run out of oil, we simply will run out of CHEAP oil… easy to find and produce oil… I hope this sinks in clearly.

We discovered oil, found large deposits of oil and we produced those first, they were the easiest to get at. Most of those fields are in decline now, we’re now going after the more difficult, smaller deposits…

Please go to The oildrum and do a bit of reading.

Kind Regards,

M. Simmons
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Simmons has been right as rain, and I am not going to cahllenge him on anything, after all, I can’t even get Marshall Adkins to return my calls. But Simmons view 18 months ago has been consistent, if nothing else.

February 2007

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Simmons & Company is the only independent investment bank specializing in the entire spectrum of the energy industry. Founded in 1974, the firm has acted as financial advisor in over $123* billion of transactions, including 511 merger and acquisitions worth over $88 billion. Simmons has served as co-manager on over $30 billion in public debt and equity offerings. During 2007 Simmons closed 49 M&A transactions worth $26 billion and co-managed 10 offerings worth $4.9 billion. The firm’s clients range from small, privately held companies to multi-billion dollar public entities.

Simmons & Company International
Homepage
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Hat Tip The Oil Drum
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The content contained in this blog represents the opinions of 1440 Wall Street. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author. No Position

Comments:

Is it just me or did Simmons say we should all start living in villages? It seems to me this guy took one too many lavitras or something… here I thought the whole reason to prevent an oil crisis was so we don’t have to live in villages.

Anyway, given the current rate of ethanol conversion, we’ll all starve to death from converting our food into fuel long before we starve to death from lack of crude to transport said food. That’s good old American ingenuity, cut out the middleman, Sam Walton would be proud.

Posted by on 07/12/2008 at 11:24 PM