Matt Simmons, from preceeding article...
Matt Simmons SUPERSTAR!
I have a background within the entertainment industry. The only other place I have seen the type of celebrity status Matt Simmons is now experiencing is backstage at music venues. His profile and importance are rising steadily.
Simmons spoke in Crystal City at the Double Tree Hotel on June 20, 2005 to a predominantly military audience just five days before FTW’s offices were burglarized. Below is a transcript of my interview with Simmons in Boston at the ASPO-USA Conference on October 26th followed by a transcript of the Q&A from Crystal City on June 20th where Simmons was on fire. What impresses me most about Simmons is that he has graduated from proving the problem of Peak Oil to discussing immediate mitigation strategies that can work. Not many people have been able to make that jump. The two transcripts below clearly demonstrate this to be the case, and they complement each other beautifully. Do you want to know what we can do to address Peak right now?
Keep reading…
FTW Interview with Matt Simmons,
Boston World Oil Conference, October 26, 2006
FTW: We are currently in a plateau area of oil production. Jean Laherrere has detailed the “bumpy plateau” of oil production, and FTW has recently written about this. Professor Michael T. Klare says this plateau could last “a decade or more.” What do you think about that?
Matt Simmons: It’s so hard to try and accurately predict this. But what is easy to predict is the fact that there is just no way – with the limitation we have of oil rigs compared to projects – to keep supply growing: That’s an impossibility. But to stabilize the base for some period of time – if we didn’t have such an incredible limitation of drilling rigs that would take at least a decade to correct – I think that would probably be possible. But given the fact that we are not going to have significantly more rigs for at least another decade, and how old the fleet of rigs is, the size of the fleet is going to drop before it goes back up. I’d say sustaining the base for 5 or 10 years is not impossible but extremely long odds.
FTW: I saw you speak in Crystal City recently, but FTW did not publish a report after that because, unfortunately, our offices were burglarized 5 days later and we spun into turmoil. At this speech you brought up a number of ideas that I would say are radical including; 1) liberating the work force, 2) having people live and work in “villages,” and, 3) changing the way we ship goods to the degree that we have to ship them, among other suggestions. Little-to-none of this is being addressed today at this conference. Are we nearing the point where conferences such as these that focus on the problem might be irrelevant or may need to be updated?
MS: First of all we won’t implement any of these changes until our back is against the wall and we realize that we have to. These aren’t things that people say, “OK, 1-2-3, let’s jump in the lake!” I think it’s so important that we educate people that this is coming. I liken this to almost every major war. We could have prevented it five years before it started, but all of a sudden you realize we’re beyond the tipping point, and now we’re at war.
What’s interesting is that liberating the workforce is actually in motion right now in Houston, Texas. Our Mayor has initiated a program in September called “flex in the city.” It’s all about flexible work rules and recognizes companies that figure out programs to start this. It’s really addressing Peak Traffic. Our highways have been expanded as much as they can be and it won’t work anymore. Unless we create a flexible work force and stop this compulsion of long-distance driving, Houston doesn’t have a future. And it’s amazing how popular it has been, and company leadership is saying that this is really a good idea. This is the easiest to do because it’s basically just a mind state change. The key to it is basically paying people by productivity instead of 9 to 5.
FTW: In Crystal City you also said that there needs to be an “end to globalization,” but that this is harder to do than the other suggestions you gave. Do you have any ideas about how we can address this, and if you don’t, can you at least speak to this?
MS: Well by globalization I don’t mean talking to someone in India by telephone. What I mean is the concept that we can get increasingly inexpensive things to purchase because we broke them apart into the simplest unit and we found the cheapest sweatshop economy in the world to have it built in and then we basically ‘zing’ the parts around until finally you’ve built a car. And the energy used up in doing that wasn’t even thought about but it was one more element that gave rise to this astonishing rise in oil demand over the last 15 years. When we finally have to start shrinking the supply we’re going to have to do without something. One of the easiest things to do without is to stop this process in its tracks and start building things very close to where they are used. But none of this will happen until it has to – not until there is a crisis.
Transcript of Q&A, Matt Simmons in Crystal City, June 20, 2006
When asked what actions should be taken immediately to mitigate Peak, Simmons had three of the most valid suggestions I have ever heard that can be implemented over the next five years:
“My three favorites are easy to do, and we don’t need any new technology. I’m sure there are some better suggestions but they are not easy. The first thing I would do is go on a program over a 5-year period of time for zero tolerance of using large trucks to ship goods over roads long distances. Just stop. To the extent that you need to ship goods long distances, put them on rails-to-water. Use the water system to take goods coming from China that come to San Diego, all the way through the Panama Canal, up the water system to Portland, Maine. You can basically move that transport in a shorter period of time – ironically – than using trucks and with 1/35 the amount of oil. So anytime you get a 35 times improvement, that’s a big deal.”
“Then we need to end something that sort of crept into our lives over the past 25 years: The compulsion to be able to visualize fresh food, fresh meat, and exotic fish in every store where there is prosperity all around the world 365 days a year. You just stop that.”
“I rewrote the last chapter of my book called “Aftermath” for the paperback, and one of the interesting facts that I have in there came from the New York Times, December 20th, where they pointed out that now that the fishing fleets are going into such deep water because we’ve depleted shallow water fishing, the fishing fleet in 2005 used more oil than Holland did.2 This compulsion to ship food all over really became energy-intensive and inane – ironically – because Shaws Supermarket has a long-term supply contract: We get blueberries from Chili even during the blueberry season. (laughter)”
“The third thing is really the homerun, and ironically Houston, Texas is beginning to experiment with this as we speak. Liberate the workforce, reward companies that are the most liberated, and start paying by productivity, as opposed to the social contract of having to check in from 9 to 5. And that will basically end up making people work in clusters, in villages, and walk to work; ride a bike to work. So I think those three things can be done in a 5-year period of time and maybe buy us three or four decades.”
“I think ultimately we have to reduce globalization, and get away from this concept that we make things in the cheapest part of the world to make them and then send them around, but that’s harder.” [emphasis added]
***
When asked if he knew anything about the Re-localization, Intentional Community or Eco-Village movements, Simmons said he did not. That is quite ironic considering that many of his statements fall more in line with what these movements are trying to accomplish than what the mainstream is trying to accomplish.
Conference Highlights
The Boston World Oil Conference was where I first found out that Simmons did not know about Peak Oil until 2001 when he participated in a CIA study analyzing global oil production and decline rates. There were about 10 experts analyzing global oil production with various models. Simmons had no model, but how could anyone have any model without knowing the names of the world’s top producing oil fields? Simmons asked if any of the CIA’s experts could name the top ten fields in the world. Ghawar and Burgan were named, but that was it. Not even Cantarell, the gigantic oil field in Mexico that has recently passed its peak, was mentioned. Without this information it is impossible to estimate decline rates no matter what model is used.
This motivated Simmons to get the names of the top producing fields, and what he found was that 50% of the world’s oil is produced by 120 fields. Geologist Kenneth Deffeyes of Princeton told Simmons that his field-by-field analysis brought the first new discipline into the study of Peak Oil since M. King Hubbert; that is, not just looking at reserves, but looking at individual fields by production.
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