On Mon, 30 Jun 2008 07:07:35 -0700 (PDT), Don Tiberone
<s_knight8@[EMAIL PROTECTED]
> wrote:
>http://economictimes.indiatimes.com/Interview/Matthew_Simmons_Chairman_and_CEO_of_Simmons_and_Co/articleshow/3178465.cms
>
>
>He is one who believes future lies in Ratan Tata’s dream car Nano,
>priced at $2,400, and we are not talking about an auto industry
>expert. At the end of the day, it’s all about the gas that goes into
>the car.
>
>In an online interview from London, leading energy maven Matthew
>Simmons spoke to ET on the theories behind the oil prices, the role of
>major consumers like India and China, and where oil prices are set to
>go.
>
>Simmons, chairman and CEO of Simmons and Co, an independent investment
>bank specialising in the entire spectrum of the energy industry,
>believes the era of easy and cheap oil is over. Founded in 1974, the
>firm has acted as financial adviser in $123 billion of transactions,
>including 511 merger and acquisitions worth $88 billion. Simmons is
>also an adviser to the Oil Depletion Analysis Centre.
>
>There are projections that oil may touch $200 a barrel by year-end. Do
>you think we are heading towards such a situation?
>
>There are so many whacky theories swirling around the world on why oil
>prices stunned everyone. Speculators are mostly betting that crude
>will soon crash, so I suspect this group of investors is net short,
>and if they are banned from speculating, oil prices will jump higher.
>
>The oddest question is the one seldom asked: why did 99% of the
>presumptive oil experts have their eyes shut as this earth-shattering
>event played out, and why the busload of sleepers are still so
>confused?
>
>What are the major drivers for the sustained spurt in oil prices?
>
>The prime culprits end up being the consumers in odd places like the
>US, Russia, the raging demand growth in west Asia and, finally, the
>two poster children of demand growth: India and China. The other
>culprits are the 100-odd giant and supergiant oilfields that are far
>too old, most of which are in permanent decline. Bombay High and
>China’s Daqing are examples of fields far past their prime.
>
>What are the measures that gas-guzzling consumers could adopt to
>soften the demand drive?
>
>Our solution is to quickly beat a hasty retreat from our ravenous
>appetite for oil by travelling less, growing food locally, begin
>working close to where we live. I recently had a chat with Mr Tata and
>the $2,400 Nano is the future of cars.
>
>Peak oil was one of the main reasons. How much has it played out?
>
>Oil production is almost certainly past peak output. We are also in
>early stages of a severe shortage of rigs, skilled workers, steel etc.
>Peaking of both oil and gas supply was bound to happen. The only
>uncertainty is pinpointing when it is clear that we have gone past the
>point of growing global supplies. As oil peaks, what it depletes most
>is the lightest grades of oil, which also flow easily from the highly-
>pressurised reservoirs.
>
>While pressures are high, the most difficult aspect of production is
>limiting the flow rate to prevent blowouts that end the pressure and
>waste oil. What is then left behind are all the heavier grades of oil,
>dropping ultimately to bitumen or tar sands, which are almost the
>consistency of coal. The heavier grade oil has to be heated to get the
>oil to a point that it flows, which uses a lot of energy.
>
>
>How will prices play out?
>
>Both oil and gas have been too cheap for too long, which encouraged
>use of a scarce and invaluable energy resource in wasteful ways. I
>think current prices are still far too cheap. I also believe the oil
>today is still dirt cheap as it translates into selling crude to
>refineries for less than 35 cents a cup. Indian and Chinese leaders
>need to lead the whole world into living back in villages so we can
>survive this post-peak oil world!
>
>The leading visionaries of the countries of the world need to come
>together to collectively solve the problem. If we all doubt the
>problem even exists, or worse, assume the marvellous free market will
>sort things out, this will be far worse than laughing at the risk of a
>bird flu pandemic or assuming Y2K would not be a problem, even though
>in the case of Y2K, the world spent billions of needless dollars as
>the problem never occurred.
>
>What is the role for large consumers like India, China and the US?
>
>India, China and the US have the most at stake on this issue as the US
>is the world’s largest energy consumer, and India and China sup****t
>the largest mass of people and the smallest per-capita energy
>consumer. The leader****p of the three countries have much at stake in
>figuring out how we get along with less supply of oil and gas than we
>now enjoy, and still enjoy economic prosperity instead of drifting
>into an awful energy war.
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