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....
1.
From: "graeme.scott"
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.
Regards,
I was actually a little doubtful that he would reply and was very
surprised when he did. Here is his reply:
2.
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
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!
Graeme, NZ