Thursday, May 12, 2005

Being Matthew Simmons.

There are now a number of people who have used Hubbert's work to try to project the world peak oil date. Many of them are interesting, and the informed ones bear listening to, but I find Matthew Simmons to be the most insightful, mainly because he is focusing a laser light right at the heart of the matter: Saudi Arabia.

In terms of the date of a world oil peak, we can make all the projections we want, but the reality is that since we don't know the actual amount of reserves in the ground, we probably won't be sure we're correct until a few years after the peak.

Matthew Simmons, on the other hand, says: forget calculating a peak and waiting to see how you did, instead focus right at the big dog with the big reserves; it's basically all about Saudi Arabia. If they are peaking (or past peak), the world is peaking (or past peak).

Unfortunately, getting the data needed to make the proper calculations from Saudi Arabia (and most if not all of the other oil exporting countries) is impossible, as they refuse to release the info.

So by collecting the data he could find on Saudi Arabia and writing his latest book, Mr. Simmons is clearly sending a challenge to the Saudis. Even the title "Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy" suggests it. You might even say he's trying to provoke them to reveal their data as a way to disprove his theories. (The folks behind this article clearly don't get this.)

I suspect that Matthew Simmons is the one peak oiler who would be thrilled if he turned out to be wrong, which is to say Saudi Arabia came out with their internal data and revealed they have all the oil (and more!) they claim to have.

The world in the end might dismiss his book and two years of his life's work, but I think he'd be rather happy with himself.