Matt Simmons: Peak Oil Will Dwarf Financial Crunch Soon
by Sami Grover, Carrboro, NC, USA on 10. 3.08
Oil Banker Warns of Energy Crisis
James Howard Kunstler is not the only one who sees parallels between the current financial crisis and a coming energy crisis. Matt Simmons, head of the oil investment bank Simmons and Company, has long been a prophet of peak oil, silencing the Fast Money team with his dire warnings to move to the country and grow your own food. And he’s busy stirring things up again, warning in a conversation with Peak Moment TV that gasoline reserves are so low in the US that if everyone topped up their tank we would see “a run on the bank”, literally running dry – running out of food within 5 to 7 days! So, what are the solutions?
“Have you ever heard that great term, ‘could have done, would have done, should have done?’ There are a lot of great things we should have done but didn’t, and now we’re out of time. So we have to hunker down and hope that we get the refineries up quicker than seems likely, we get electricity back up. But what’s happening is the artery that supplies all this stuff has been maimed. What we’re doing is using up our last useable supplies – and that’s what the news was about all weekend – Atlanta out of gas, Nasheville out of gas, Tallahassee out of gas…”
Fortunately it’s not all doom and gloom. Simmons does point out, as most of us TreeHuggers know, that we currently waste fuel at a stunning rate. As Simmons argues, if you take a 40mpg car and put it in heavy traffic, it will still only get 3 or 4mpg. So ultimately our only option, says Simmons, is to beat a fast retreat from over consumption, start working from home, grow our own food, and rethink our entire system. Given the relative silence on such an important issue from our elected leaders and presidential candidates, and given the fact that drilling for oil is not the answer, Transition Towns are looking pretty good right now…
::Peak Moment TV::via press release::
Further Reading on Community Solutions to Climate Change and Peak Oil
Portland Peak Oil Activists and Local Politicians Work Together
The Greenest Village in Britain? Chew Magna’s Go Zero Project
Community Solutions to Coming Challenges: Peak Moment TV
Further Reading on Transition Towns
Transition Towns Reach New Zealand
Transition Town Plants Up Nut Trees for Food Security
Interview with Rob Hopkins, founder of the movement
Transition City Bristol
The Transition Handbook
Transition Towns Reach Australia
The Virtual Orchard Project
And Some Other Ideas for Weaning Us Off Fossil Fuels
Kite Powered Shipping
Backyard Permaculture
Urban Aquaponics
Local Farming Systems
Bikes, Cargo Bikes, Electric Bikes, Electric Scooters, Electric Cars, and Electric Trucks
Telecommuting
New Urbanism
Trains
Vegetarianism and Reduced Meat Diets
Algae and Waste Grease for Biofuels
Community Gardens
DIY Hydroponics
Freecycle
Car sharing
Airships
Turboprop Aircraft
Micro- , Macro- and Bloody-Massive-Scale Wind Turbines
Solar Power to Power a House or to Power the World
Thirsty for more? Check out these related articles:
- Preparing for Peak Oil: Local Authorities and the Energy Crisis
- Era Of Cheap Oil is Over, Prices Will Top $200: International Energy Agency
- Matt Simmons: Peak Oil Will Dwarf Financial Crunch Soon
- Amory Lovins Named One of America’s Best Leaders by US News & World Report





















Simmons is great. You forgot to mention his authorship of the book "Twilight in the Desert", and of course his excellent website which features down-loadable PDFs of the slide-shows from his speeches - a great resource.
It stands to reason that the people to be affected by this crisis first, are the pickup- and SUV-drivin' rednecks in the deep south. Sure, those in the northeast and pacific northwest are gonna be hit eventually, but the wider adoption of public transport and greater general willingness to walk and bike in those 2 areas will buy a little bit of time.
Virgil, I agree.
I live in AR and most people around here would rather pay $$$$ to fill up their suvs and trucks than invest in public transportation. They think it's a waste.
I wonder if they'll be feeling the same way when gas is 5 and 6 a gallon.
I truly hope people wake up and realize we need to fund our public transportation system like crazy.
It will be interesting to see how things play out. (And I mean interesting in the way a biologist means interesting when two cultures of fire ants collide.) I live in Dallas, TX and we have a very good Public Tran system here. Much better than most people give it credit for. But for the surrounding suburbs and Exurbs, they are stranded without their cars. I don't know how this is going to play out, but I'll watch with interest. And we bought a duplex in Dallas Proper near a train station, so were banking on the worst. Got a good deal on it too, land here is so cheep.
What really got me about the comments in the Kunstler article is the number of people coming down on him for being such a curmudgeon and claiming that his vision would never happen. In fact, his vision is exactly what will happen if we maintain our current course. There's no guarantee that have the willpower, the foresight, the resources, or the time as a nation to make the changes necessary to prevent a collapse of our economy and society. There is no example in history of an empire (and don't kid yourself that the US isn't an empire) that didn't fail to change in response to environmental, political, or societal changes and collapse. The entrenched interests that would like to maintain the current course are incredibly powerful and mostly in control of the government. Even with Obama as president, it will take an incredible amount of time and effort to turn the ship away from the impending collision with the iceberg that is oil depletion. No oil is the US in 1850, but with four times the population. People need to be optimistic, but also realistic about the scope and difficulties of transitioning off oil. It's going to be extremely difficult, and there's a very large chance we won't do it right, leading to poverty, hunger, and a complete loss of our current lifestyle.
To be sure, most of my local rednecks stand a better chance than I of surviving a paleolithic existence. We should not discount the skill sets of the F150 crowd, many have gardens that put mine to shame. Recall Ruby in the novel/film Cold Mountain. Who is your Ruby? I talk to mine about peak oil every chance I get.
Mr. Simmons was predicting doom earlier this year. Oil was at $145 a barrel and he was predicting $200. He has money in oil. What an opportunist. It's now below $95 a barrel and the Saudi's would like to keep it at $100.
Here's a good link I got from evworld if you'd like to be more informed:
http://www.evworld.com/article.cfm?storyid=1535
They're predicting peak oil, but not for ten years or more and I think they're under-estimating the ramp up in alternative oil and renewables. Their best estimate for several of the largest OPEC producers is stable production till 2040. Both solar and wind grew by 48% last year. Solar has been doing that since 2003. That's more than doubling production every two years.
Volt (E-REV) 4 person, due in 2010
40 miles all-electric, 50 mpg after that:
90 miles: 1 gal used = 90 mpg
140 miles: 2 gal used = 70 mpg
240 miles: 4 gal used = 60 mpg
440 miles: 8 gal used = 55 mpg
Aptera (E-REV) 2 person, due in early 2009!
120 miles all-electric, 130 mpg after that:
250 miles: 1 gal used = 250 mpg
380 miles: 2 gal used = 190 mpg
510 miles: 3 gal used = 170 mpg
60% of USA oil goes to car and light truck transportation.
78% of USA drivers average less than 40 miles per day.
We can generate electricity cleanly from Nuclear, Solar, Wind, Geothermal, and Waves. Any one, except waves, can do the job on its own. There is several ways of storing energy at a relatively low cost.
OBVIOUSLY, VERY VERY OBVIOUSLY EXTENDED-RANGE ELECTRIC VEHICLES (E-REVs) ARE THE ANSWER. WAKE UP AMURICA!
Vote for Obama and let's put $150 billion into Renewables and Electric Ground Transport instead of into military expenses in the middle east.
"Twilight in the Desert" may have been a great book, but Simmons is a bottom feeder now. Doomsayers suck. Strive for a better world!
We can make the transition before it's too late.
The technology IS there NOW.
btw USA gasoline consumption has been going down for what 6 months now?
Here's a better answer to Mr. Chickenlittle:
http://www.pcworld.com/businesscenter/article/151773/google_proposes_44_trillion_clean_energy_plan.html
"The plan involves weaning the U.S. off of coal for producing its electricity and turning to wind, solar and geothermal power instead. It would also cut oil use in cars by 40 percent and use electricity for personal transportation. "
It is NOT "What might happen to us if...?"
It IS "What can we do that will work?"
AND there are good answers.
The only viable alternative to oil shortages in the past was wood and coal gasification, used in Europe during WW2.
If you take this guy seriously, then visit http://Wood-Gasification.com and start researching how gasification can supply your family with the energy they need, all from waste biomass. Free plans in the resource section.
I'm a big Simmons fan and have read most of what he has written. However I think people make way too big a deal out of "Peak Oil", which by the way probably already happened. OK, so the price went up and everyone is complaining, but the world didn't end. The result is people trying harder to find more oil or find an alternative. Just because oil production may have peaked, doesn't mean we are out. Guess what, we used to rely on oil from whales until that got scarce and petroleum became a better option. I see the same thing happening. Petroleum will phase out slowly as production declines and prices rise. Eventually we will decide that petroleum is no longer worth the cost to the environment and it will no longer be used, and just like the whales, we will still have some left. That there are real gas shortages in parts of the Southeast simply means that gas was underpriced.
Also, note that Simmons advocates moving to the country, not a city with a nice mass transit system. Don't knock the "rednecks" too hard, because many of them either grow your food or support farming communities. If the manure really does hit the fan, I doubt the rednecks will be plowing their fields by hand and biking your food to the cities so you can walk to work.
@ MDS
Yeah, right, OPEC will be able to produce the same amount for the next 30 years, until 2040. Did you even read Simmons book? All those OPEC countries hide their reserves to prevent the world from developing alternatives. Their reserves are half or less of what they state. Ghawar was 35% water injection FIVE YEARS AGO. Even if supply remains the same, demand continues to rise. We've had static oil supply for the past 3 years and the result was a tripling in the price of oil. And according to the EIA only 50% of usage goes to cars and light trucks. EVs rely on lithium 90% of which is imported. Oil Prices are coming down, because gasoline purchases are off 10% year over year, and other oil uses have been reduced as well. That will cause the price to fall.
All the EV electronics rely on heavy metals that are also peaking and getting more expensive. The Aptera and the Volt are $40,000, and the cost of lithium batteries for all products will go up if the vast majority of the stuff is going to EVs. It's great that solar and wind are growing, but they currently rely on an underlying fossil fuel infrastructure. Obama needs to put in $500b, not $150b.
There are huge obstacles to overcome, and major changes in both US infrastructure and culture need to occur to get it right, or we will end up in Kunstler land. I don't see those changes occuring in any scope. A few 1000 PHEVs and EVs produced, when tens of millions of vehicles are sold each year is nothing. We're not laying 1000's of new rail lines per year. We're not building 10s of gigawatts of solar or wind installations per year (wind is getting better). We've got one major political party denying global warming and oil depletion and the other major party being cowed by the first.
Russia by itself could throw the world into a depression that would make the 1930s look like a Sunday picnic if it pulled its 10m barrels of oil off the world market. Both Russia and Saudi Arabia have growing domestic oil consumption and will start exporting less in the next few years. Mexico, the North Slope, and the North Sea are all in decline. Venesuela hates us. Do you think we'll be replacing Americas 300m vehicles with electrics in the next few years? You're dreaming.
@ Ben
The forests would be stripped clean in a decade if we did that for any kind of significant number of people.
@ Jim
The price went up and demand remained static. That's why the world hasn't ended. The problem comes when the supply begins to diminish. We were able to reduce consumption by picking the low hanging fruit: consolidate errands, go to the beach every OTHER weekend, carpool, etc. There's a base level of mobility that can't be changed: you HAVE to go to work everyday, you have to go shopping every week, your kids have to go to school. Economic growth directly parallels the number of miles driven by Americans, since trips result in business done.
I was in m classroom today and i wanted to show this video to my philosophy students. What a surprise to understand that it as been removed. Why? Was it a decision of Matt Simmons? Who else f not? Is there any transcript of the content?
Thanks in advence!
François Privé
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Author's Comment:
Indeed François - I was disappointed to see that too. I have emailed Peak Moment TV and will see if the video is likely to be up again, and/or if a transcript is available. According to the message on YouTube, it looks like the copyright dispute is coming from ASPO (Association for the Study of Peak Oil), at whose conference Simmons was speaking - it might be worth contacting them to see if they have their own video footage and/or if they are planning to publish transcripts of Matt Simmons' talk.
If I find anything out I will post an update.
Matt Simmons did a very interesting interview with www.WorldEnergy.TV where he covers much of this. He also predicts a severe gasoline shortage, talks about the candidates, describes his new offshore wind project, and basically tells us to "pray". Good interview.
JSDreyer,
Thanks for your response and sorry for late counter. I was gone for a while.
1. Aptera costs $30,000 not $40,000. Cost of Volt has not been announced yet, although you'll probably be close on that one. Recent Federal tax credits will help with Volt sales.
2. You may be correct about 50% of oil use for light cars and trucks. Thought I'd read this was closer to 60% now but do not have a source. I could be wrong. My point still stands: Our oil use can be dramatically reduced by switching to E-REVs.
3. A potential Lithium shortage is non-sense. Knowledgeable authorities on the subject say there is plenty of the it around. (I do have a few links to info on that.) There is even sources within the USA. They just aren't as cheap. They're not much more expensive either and if the price goes up a little...
4. GM will start Volt production with over 100,000 per annum. The Prius will be over 1 million per annum soon. Boeing built three times as many airplanes per year during WW2 as they do now. We can provide incentives and government backed loans to scale up E-REV production faster than you know ...and bring manufacturing jobs back to the USA in the bargain.
5. It doesn't matter what Saudi oil production does. If it is close to good for 10 to 20 years that's enough.
(a) There are two Saudi Arabias of tar sand oil in Alberta.
(b) There are three Saudi Arabias of heavy oil in Venezuela.
(c) There are two Saudi Arabias of shale oil in the USA.
(d) There are many Saudi Arabias of coal, in USA, Australia, China, and India. Billions are being spent on coal to liquids (CTL) right now.
ALL OF THESE ARE PROFITABLE FOR MUCH LESS THAN $100 PER BARREL.
I'm not saying (a) through (d) are good sources to exploit. I am saying they will be exploited if E-REVs are not given some development incentives to move them along faster. I am also saying (a) through (d) should limit oil price increases. The former may be hard for conservative brains to grasp, but the latter should be obvious to all but the most challenged thinkers.
Most of all I'm saying this CAN be done!
Simmons is wrong!
You are wrong!
In respectful disagreement,
mds
BTW
Oil is now roughly $70 per barrel.
I didn't think it would drop that far that fast and am pleased it has leveled off. $100 per barrel would be better for E-REV progress ...for jatropha and algae oil sources too.