Energy executive Matthew Simmons, a leading proponent of the theory of Peak Oil, passed away earlier this week in Maine. The 67-year-old had championed the idea that the world’s petroleum production was in a permanent state of decline. Leading energy experts, including T. Boone Pickens, have long supported the concept of Peak Oil, which Pickens described in his 2008 autobiography The First Billion is the Hardest:
“The Peak Oil theory was established by Texas-born Shell geophysicist Marion King Hubbert, who created a model of and a theory about the world’s dwindling oil reserves. In 1956, he told members of the American Association of Petroleum Geologists (AAPG) something nobody wanted to hear, either today or back then: oil production from conventional sources would peak in the U.S. by the early 1970s. He also predicted that global oil production would peak in about 50 years or roughly around 2006. According to Hubbert’s Peak Oil theory, at that time the world’s oil production would then go into a state of permanent decline.
“Hubbert hit it right on the nose. U.S. oil production did in fact peak in 1970. Domestic production was at an all-time high: 10 million barrels a day. Today that number is half that amount.”
According to Bloomberg, Simmons, who founded his own energy firm in 1974, became an advocate of the theory of Peak Oil after a recent visit to the Middle East:
“On a tour of Saudi Arabia’s oil industry in 2003, Simmons was inspired to estimate the world’s largest oil reserves, and from research that included poring through neglected engineering data, determined that the country was close to or nearing peak output, Peter Maass wrote in his book, Crude World: The Violent Twilight of Oil.”
Why does Peak Oil matter to Americans? Because in world where emerging economies in China and India are competing for energy resources, the U.S. must either establish its energy independence by utilizing domestic natural gas as well as renewable energies or face a worst-case scenario similar to the one painted by Pulitzer Prize-winning journalist Paul Salopek:
Permanent fuel shortages would tip the world into a generations-long economic depression. Millions would lose their jobs as industry implodes. Farm tractors would be idled for lack of fuel, triggering massive famines. Energy wars would flare …. This may sound like the plot from a B-grade disaster flick. But with crude prices hitting record highs since 2004, global oil demand outstripping supplies like never before and major discoveries stagnant for 20 years, peak oil has migrated from the fringe to the center of the global energy debate.”
Learn more about The First Billion is the Hardest HERE.