Matthew Simmons, the outspoken investment banker and author best known for championing the concept of peak oil, has died at the age of 67. Considered a maverick in the close-knit world of energy finance but admired by the redoubtable T Boone Pickens, Simmons did more than anyone else to bring to widespread public attention the obscure theory proposed more than half a century earlier by the geophysicist M King Hubbert.
Simmons's 2005 book, Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy, still enjoys brisk sales. After its publication brought him cult-hero status among a motley following of environmentalists, green-energy enthusiasts and conspiracy theorists, he vigorously strode the interview and conference circuit, seizing any opportunity to expound his controversial view that world oil supply was already in decline.
In 2008, as crude surged towards a record US$147 per barrel and consumers feared inundation by a tide of rising fuel prices and surcharges, he gained mainstream fame as a prophet of world economic catastrophe. "I find it ironic that here we have the biggest industry on earth and I'm one of the few people to figure out that we have a major problem," he told Fortune magazine in September 2008, when crude was still above $100 per barrel. "And I did it all in my spare time. How stupid and tragic is that?"
A global economic crisis followed. But instead of blaming the crash on oil shortages, economists instead fingered the greed of a poorly regulated banking industry, which triggered a worldwide credit crunch. OPEC noted that world oil demand had been falling for months before crude reached its all-time price peak and it blamed the rise on market speculation. In many European and American living rooms, however, it had become politically incorrect to question the veracity of "peak oil" forecasts - a testament to Simmons's powers of persuasion.
In recent months, he levered his standing with the public and as a credible oil-industry insider to excoriate BP over its huge Gulf of Mexico oil spill. In June, he predicted the spill would bankrupt BP within a month. He also argued that the company's efforts to plug the gusher were doomed. The US military should take over because a nuclear explosion was needed to seal the well, he said. "There's a lake at the bottom of the Gulf of Mexico that's over 100 miles wide and at least 400 to 500 feet deep of black oil. It's just staying there," Simmons said in June. "If a hurricane comes and blows this to shore, it could paint the Gulf Coast black."
Those dire predictions were not borne out. Last week, BP capped the leak and unveiled a new corporate strategy. Independent scientists said environmental damage from the spill was not as bad as they had originally feared. With the Gulf of Mexico and world markets awash with oil, Simmons's motto could have been "never say die". "What are the lessons learned from this environmental disaster?" Fortune asked.
"That oil peaked. The easy stuff is over," he responded. "We probably need to take a deep breath and step back. Until we develop a new generation of equipment that can respond to these accidents, just don't go into the ultra-deep water and deep formations because it's just too risky." Sadly for his followers and critics alike, Mr Peak Oil proved only too mortal. Simmons died on Sunday after apparently accidentally drowning in a hot tub at his home in North Haven, Maine. He is survived by his wife and five daughters and his latest project, the Ocean Energy Institute, which he founded in 2007 to explore opportunities for tapping clean energy from deep-sea currents.
tcarlisle@thenational.ae
