A few days ago Graeme Scott, a New Zealand geologist, wrote to Matthew Simmons, the energy expert and investment banker, some of whose views were reported last week by Al Jazeera.[1]  --  He was surprised when Simmons wrote back at some length.[2]  --  Simmons, who has advised the Bush administration on energy matters, is a widely respected oil analyst (see, for example, Richard Heinberg's The Party's Over (2003), pp. 99-102, and his Powerdown (2004), p. 28; Paul Roberts, The End of Oil (2004), pp. 60, 64, 65; Sonia Shah, Crude: The Story of Oil (2004), p. 134).  --  So it should be news that he now says flatly: "Peak Oil is here."  --  Since Matt Simmons is the author of a new book entitled Twilight in the Desert, to be published by Wiley in May, many will no doubt take comfort in the idea that Simmons could be trying to create a buzz for his book.  --  Time will tell....


From: "graeme.scott"
Date: 2005/02/27 Sun AM 11:12:42 PST
To: This email address is being protected from spambots. You need JavaScript enabled to view it.
Subject: [RunningOnEmpty2] Personal message from Simmons to me about PO -- don't panic!

I emailed the following message to Matthew Simmons:

I would really like to communicate with Matthew Simmons if this is possible.

My name is Graeme Scott. I have a Ph.D. in geothermal geology and my dissertation was on the Tongonan geothermal field, Philippines. If you wish, you can check my latest publications on google.

Recently, I have been interested in peak oil. There is increasing interest in geothermal technology world-wide because of the increasing price of oil. I joined 2 Yahoo newsgroups called "Running on empty"and discovered that there is extreme pessimism about the world economy and just how long Middle East oil will last. Groups are lobbying government here in New Zealand and trying to reach the wider audiences through public meetings about the consequences of peak oil. I have read some of your speeches. You say that oil from Saudi Arabia should last 90 years at current rates of production and that SA has 25% of the world reserves. Do you still subscribe to this view? I have received alternative calculations such as this:

At current rates of world usage, 80 million b/day, these Saudi reserves will last 8.9 years (260 billion/80 million/365 days).

If world reserves are 4 times this, at current usage, this will last 35.6 years. The last 10% of any field is usually not viable, so we are looking at 32.04 years (i.e. 2037).

If world usage goes up (depending on ability to supply any increase) which is likely, we are looking at 25-32 years (ie 2030-2037).

Would you agree with the above calculation?. With your permission (and if you are willing), I would like to publish your reply in the above newsgroups in order to allay the fears about peak oil and stop extreme pessimism from causing panic in communities world-wide. Do we have enough time to change to alternative fuels such as natural gas, fuel derived from coal, or biofuels? I would appreciate any other comments you may have on this subject.

Graeme, NZ

I was actually a little doubtful that he would reply and was very surprised when he did. Here is his reply:


Dear Dr. Scott:

Thanks for your excellent set of questions. I will try and shed some light on what I now think I know about Middle East Oil. When you quote me saying that Saudi Arabia has 260 billion barrels of proven reserves, totaling 25% of global production, which lasts 90 years if you take their straight-line production today and assume it stays level until "the cupboard is bare" . . . these are their official numbers and the general mantra folks use to then ignore the prospect that we might now be approaching peak oil.

Until two years ago, I assumed these numbers were probably true as I had heard them so many times from so many experts. A single six-day trip to Saudi Arabia set off various questions I had as to whether these "facts" were really facts or simply opinions or educated guesses. This led me into the most intense research I have ever done and the effort resulted in my pending book, Twilight in the Desert. John Wiley & Sons are publishing it and publication date is May 27th.

The book will set out hundreds of pages of data on an astonishing story. The myth that Middle East Oil is so abundant at such a low price that there is not even a need for more Middle East exploration was only a thesis. There were educated technicians at Chevron and the other Aramco owners as early as 1972 who were beginning to get concerned that if the handful of key oil fields in Saudi Arabia were produced at a 9 to 10 million b/d rate, these fields would go into irreversible decline by the early to mid-1990's. By early 1979, as the old Aramco owners were packing their bags and Aramco was being taken over by Saudis, the sense that these fields could produce even 12 million b/d without starting into a sharp decline in the early part of the 2000 decade was getting widespread among the real technical experts.

Sadly, this knowledge was kept under wraps and the entire world began to assume that oil was so abundant that we had about 15 to 20 million b/d shut in supply as the price of oil collapsed in the mid-1980's. We then spent two more decades in the comfortable illusion of cheap oil forever.

It was never true. I hope the lengthy two years of work that went into my pending book will finally be a tipping point to begin educating energy planners that Peak Oil is here.

What all this means is also important for people to understand as it does not mean social chaos if everyone understands what the issues are. I spent a great deal of time in my final chapter called "Aftermath" trying to spell out a series of things people need to begin thinking about to avoid the panic your questions implied.

All this sounds like an advertisement for the book but I am hopeful it gets wide readership as its message is of the utmost importance.

Feel free to use any or all of these comments to any others interested in the topic.

Best regards

Matt Simmons