Oh, shit...
Prediction #1 (of 3) from Oil Expert Matt Simmons:‘Real Risk’ Gas Pumps Run Dry This Summer
Posted: July 9, 2007
As energy forecasters go, Matthew R. Simmons, head of a Houston-based energy investment bank that bears his name, has a reputation for gloom and doom predictions about the future of oil.
Still, Simmons doesn’t shoot from the hip, which is why his new prediction that there is a “real risk” that gas stations in the United States will run dry this summer can not be dismissed.
Indeed, Simmons’ logic is disturbingly logical.
Simmons told EnergyTechStocks.com that U.S. refineries simply aren’t capable of running at a sufficiently high capacity to produce enough gasoline for the many millions of American motorists who, despite ever rising pump prices, continue to drive more miles each year. “The refineries are too old,” he said.
Simmons made an analogy between an old house whose plumbing and wiring have been modernized and an old oil refinery which, like U.S. refineries, has had its equipment modernized. “It’s still an old house,” he said.
To be sure, thanks to increasing amounts of refined gasoline imported from Europe, up until now America has been able to quench motorists’ thirst. But Simmons believes that imports can no longer fill the breach. “We’ve pretty well drained that option,” he told EnergyTechStocks.com, adding that it would take years before any new refineries that were built in the U.S. would make a significant difference in available supply.
How might the gas shortage that Simmons fears unfold?
“You won’t see it until it’s happened,” he said. It could start in any region of the U.S., he added, and once the media gets wind of it, Americans everywhere will rush to “top off” their gas tanks, exacerbating the situation until it becomes a full blown emergency.
Despite assurances from industry officials that shortages are unlikely, there have been signs that a gas shortage could develop this summer. A recent Associated Press story filed from Bismarck, ND talked about fuel shortages at pipeline terminals in the region due in part to flooding problems affecting a refinery in Coffeyville, Kan.
If a gas shortage does develop this summer, pump prices will surge, Simmons said, adding that the silver lining in such a crisis would be that it might finally force Congress to take bold steps for solving America’s ever worsening energy problems.
Click Here For Part 2 of 3 (No need...I done did it)
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