Matthew R. Simmons started an Investment Banking firm in 1974 with a specific focus on the oil service industry. This was the period of time when the first oil shock rippled through the global economy. Simmons & Company International has survived and adapted to the boom of bust cycle of the energy business so when Simmons expresses concerns about the near term ability to produce oil and natural gas, I pay attention. These are the concerns of a businessman and not the fear mongering of power seekers looking for opportunities to advance a social agenda.
I believe I first became aware of Simmons from a C-SPAN program about a year ago. He spoke of reviewing pages of boring and obscure technical literature about the Saudi oil fields, and coming to the conclusion the production processes being utilized were those consistent with flushing residue from increasingly empty chambers. The company website has a similar slide presentation about The Coming Saudi Oil Shock.
Last week Simmons gave a Harvard Energy Lecture addressing the overall energy outlook for the world. The 20th century was a miracle century for human life, but as every good business person understands, past performance does not guarantee future results. A hard truth about oil and gas production is that a steady flow can be maintained by adjustments in pressure, but sooner or later wells run dry. Rational adults deal with the facts of life and plan accordingly. Part of this planning must deal with how to preserve individual liberty when a free populace turns to government for economic protection.
