Matthew Simmons

Matthew Simmons

Discussion
Ask a question about 'Matthew Simmons'
Start a new discussion about 'Matthew Simmons'
Answer questions from other users
Full Discussion Forum
 
Encyclopedia
Matthew Roy Simmons was founder and chairman emeritus of Simmons & Company International
Simmons & Company International
Simmons & Company International is a private investment bank based in Houston, Texas, that specializes in energy research, trading, and capital structuring. It was founded in 1974 by Matthew Simmons who was motivated by the 1973 energy crisis to create an investment banking firm catering to oil...

, and was a prominent advocate of peak oil
Peak oil
Peak oil is the point in time when the maximum rate of global petroleum extraction is reached, after which the rate of production enters terminal decline. This concept is based on the observed production rates of individual oil wells, projected reserves and the combined production rate of a field...

. Simmons was motivated by the 1973 energy crisis to create an investment banking firm catering to oil companies. In his previous capacity, he served as energy adviser to U.S. President George W. Bush
George W. Bush
George Walker Bush is an American politician who served as the 43rd President of the United States, from 2001 to 2009. Before that, he was the 46th Governor of Texas, having served from 1995 to 2000....

. He was, up until his death, a member of the National Petroleum Council
National Petroleum Council
The National Petroleum Council is an American advisory committee representing oil and natural gas industry views to the Secretary of Energy.The council was established in 1946 at the request of President Harry S. Truman to represent industry views on any matters relating to oil and natural gas...

 and the Council on Foreign Relations
Council on Foreign Relations
The Council on Foreign Relations is an American nonprofit nonpartisan membership organization, publisher, and think tank specializing in U.S. foreign policy and international affairs...

.

Simmons, who lived in Houston, Texas
Texas
Texas is the second largest U.S. state by both area and population, and the largest state by area in the contiguous United States.The name, based on the Caddo word "Tejas" meaning "friends" or "allies", was applied by the Spanish to the Caddo themselves and to the region of their settlement in...

, died at his vacation home in North Haven, Maine
North Haven, Maine
North Haven is a town in Knox County, Maine, United States, in Penobscot Bay. The town is both a year-round island community and a prominent summer colony. The population was 381 at the 2000 census...

, on August 8, 2010, at the age of 67. The cause of death was ruled "accidental drowning with heart disease a contributing factor".

Simmons was the author of the book Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy, published in 2005. His examination of oil reserve decline rates helped raise awareness of the unreliability of Middle East
Middle East
The Middle East is a region that encompasses Western Asia and Northern Africa. It is often used as a synonym for Near East, in opposition to Far East...

 oil reserves
Oil reserves
The total estimated amount of oil in an oil reservoir, including both producible and non-producible oil, is called oil in place. However, because of reservoir characteristics and limitations in petroleum extraction technologies, only a fraction of this oil can be brought to the surface, and it is...

. He gave numerous presentations on Peak Oil
Peak oil
Peak oil is the point in time when the maximum rate of global petroleum extraction is reached, after which the rate of production enters terminal decline. This concept is based on the observed production rates of individual oil wells, projected reserves and the combined production rate of a field...

 and water
Water
Water is a chemical substance with the chemical formula H2O. A water molecule contains one oxygen and two hydrogen atoms connected by covalent bonds. Water is a liquid at ambient conditions, but it often co-exists on Earth with its solid state, ice, and gaseous state . Water also exists in a...

 shortages.

Simmons believed that the Club of Rome
Club of Rome
The Club of Rome is a global think tank that deals with a variety of international political issues. Founded in 1968 at Accademia dei Lincei in Rome, Italy, the CoR describes itself as "a group of world citizens, sharing a common concern for the future of humanity." It consists of current and...

 predictions are more accurate than usually acknowledged.

Simmons was the founder of the Ocean Energy Institute in Maine. His vision was to make Maine a leader in energy from offshore wind and ocean forces.

Saudi Arabian oil reserves


In his book, Simmons argues that production from Saudi Arabia
Saudi Arabia
The Kingdom of Saudi Arabia , commonly known in British English as Saudi Arabia and in Arabic as as-Sa‘ūdiyyah , is the largest state in Western Asia by land area, constituting the bulk of the Arabian Peninsula, and the second-largest in the Arab World...

 and especially from Ghawar – the world's largest oil field – will peak in the near future, if it has not done so already. Simmons bases his case on hundreds of internal documents from Saudi Aramco
Saudi Aramco
Saudi Aramco , officially the Saudi Arabian Oil Company, is the national oil company of Saudi Arabia.Saudi Aramco is the world's largest and most valuable privately-held company, with estimates of its value in 2011 to be $7 trillion USD.Saudi Aramco has both the largest proven crude oil reserves,...

, professional journals and other authoritative sources.

Oil price wager


In August 2005, Simmons bet John Tierney
John Tierney (journalist)
John Marion Tierney is a journalist and author who has worked for the New York Times since 1990.-Career and background:...

 and Rita Simon, the widow of Julian Simon
Julian Lincoln Simon
Julian Lincoln Simon was a professor of business administration at the University of Maryland and a Senior Fellow at the Cato Institute at the time of his death, after previously serving as a longtime business professor at the University of Illinois at Urbana-Champaign.Simon wrote many books and...

, $2500 each that the price of oil averaged over the entire calendar year of 2010 would be at least $200 per barrel (in 2005 dollars). Simmons would have lost this bet by a very wide margin: 2010 average oil prices did not even reach $100. A factor in this, however, was that the world-wide economic collapse created demand destruction
Demand destruction
Demand destruction is an economic term used to describe a permanent downward shift in the demand curve in the direction of lower demand of a commodity such as energy products, induced by a prolonged period of high prices or constrained supply....

 that greatly decreased the demand for oil causing prices to fall. The decline in price is evidence supporting some critics who contend that Simmons' theories did not take adequate account of economic effects on the oil supply. However, his theories about the difficulties in increasing (or maintaining) production levels have not yet been disproved.

Ocean Energy Institute


The Institute researches and develops energy sources from the oceans such as wind energy
Wind energy
Wind energy is the kinetic energy of air in motion; see also wind power.Total wind energy flowing through an imaginary area A during the time t is:E = ½ m v2 = ½ v 2...

 and tidal energy. http://www.oceanenergy.org/

Appearances and interviews


Simmons made contributions to the films Peak Oil – Imposed by Nature, The Power of Community: How Cuba Survived Peak Oil
The Power of Community: How Cuba Survived Peak Oil
The Power of Community: How Cuba Survived Peak Oil is an American documentary film that explores the Special Period in Peacetime and its aftermath; the economic collapse and eventual recovery of Cuba following the fall of the Soviet Union in 1991...

(2006
2006 in film
- Highest-grossing films :Please note that following the tradition of the English-language film industry, these are the top-grossing films that were first released in the United States in 2006...

), The End of Suburbia
The End of Suburbia
The End of Suburbia: Oil Depletion and the Collapse of The American Dream is a 2004 documentary film concerning peak oil and its implications for the suburban lifestyle, written and directed by Toronto-based filmmaker Gregory Greene....

, Crude Impact
Crude Impact
Crude Impact is a 2006 film written and directed by James Jandak Wood. It is a documentary about the effect of fossil fuels on issues such as global warming, the environmental crisis, society and the questionable practices of oil companies...

, and Crude Awakening: The Oil Crash
Crude Awakening: The Oil Crash
A Crude Awakening: The Oil Crash is an award-winning documentary film about peak oil, produced and directed by Basil Gelpke and Ray McCormack.-Overview:...

, and appeared on World Energy Television World Energy Video Interview, August 2008

Deepwater Horizon oil spill conjectures


Simmons made several controversial comments and predictions regarding the Deepwater Horizon oil spill
Deepwater Horizon oil spill
The Deepwater Horizon oil spill is an oil spill in the Gulf of Mexico which flowed unabated for three months in 2010, and continues to leak fresh oil. It is the largest accidental marine oil spill in the history of the petroleum industry...

 and BP
BP
BP p.l.c. is a global oil and gas company headquartered in London, United Kingdom. It is the third-largest energy company and fourth-largest company in the world measured by revenues and one of the six oil and gas "supermajors"...

's solvency, including:
  • Talking with Bloomberg TV's Mark Crumpton, Lizzie O'Leary and Julie Hyman about BP Plc's oil leak in the Gulf of Mexico.

  • During a June 9, 2010, interview with Fortune, Simmons claimed that BP would "have about a month before they claim Chapter 11". The comment initially contributed to a precipitous drop in BP's market capitalization. However, subsequent events, including BP's establishment of a $20 billion claim fund, have shown Simmons' claim to be highly unlikely, and BP's stock price has begun to recover.

  • On June 9, 2010, Simmons was interviewed by Barron's journalist Tieman Ray. Simmons disclosed that he personally held an 8,000 share short position in BP stock. As BP's stock price went lower, Simmons was benefitting financially amid fears of bankruptcy.

  • During a July 7, 2010, interview on CNBC (which was around the date Simmons originally predicted BP would be filing for bankruptcy), Simmons claimed that scientists were reporting the flow rate from the oil spill was "spewing 120,000 barrels a day into the Gulf" and that there have been estimates that we have "lost oxygen for 40% of the Gulf of Mexico". He further claimed that the relief wells will not stop the oil spill.

  • A week later, during a July 15, 2010 interview with KPFK
    KPFK
    KPFK is a listener-sponsored radio station based in North Hollywood, California, United States, which serves the Greater Los Angeles Area, and also streams 24 hours a day via the Internet...

     – Pacifica
    Pacifica Radio
    Pacifica Radio is the oldest public radio network in the United States. It is a group of five independently operated, non-commercial, listener-supported radio stations that is known for its progressive/liberal political orientation. It is also a program service supplying over 100 affiliated...

     Los Angeles, Simmons asserted that the relief wells and the capping process on the Macondo wellhead are publicity stunts and that the real vent is up to ten miles (16 km) away. He said that an enormous pool of crude is accumulating below the sea floor, releasing poisonous gases and waiting to be whipped up by a hurricane.

  • Also, previously, on May 26, 2010, Matthew Simmons was a guest on 'The Dylan Ratigan
    Dylan Ratigan
    Dylan Jason Ratigan is an American television host primarily covering financial markets, the global economy, and politics. He is host of The Dylan Ratigan Show which airs weekday afternoons on MSNBC. He is also a frequent contributor on The Huffington Post.- Early life :Ratigan was born in the...

     Show' on MSNBC
    MSNBC
    MSNBC is a cable news channel based in the United States available in the US, Germany , South Africa, the Middle East and Canada...

    , where he explained his reasons for believing that the Deepwater Horizon oil spill involved not only the leak being monitored by BP's video-camera-equipped ROVs [remotely operated vehicles], but another, much bigger leak, several miles away.

Wikileaks Cable Mention


The Guardian
The Guardian
The Guardian, formerly known as The Manchester Guardian , is a British national daily newspaper in the Berliner format...

 reported that Simmons was mentioned in a leaked U.S State Department
United States Department of State
The United States Department of State , is the United States federal executive department responsible for international relations of the United States, equivalent to the foreign ministries of other countries...

 cable dated November 2007:

COMMENT: While al-Husseini believes that Saudi officials overstate capabilities in the interest of spurring foreign investment, he is also critical of international expectations. He stated that the IEA's expectation that Saudi Arabia and the Middle East will lead the market in reaching global output levels of over 100 million barrels/day is unrealistic, and it is incumbent upon political leaders to begin understanding and preparing for this "inconvenient truth." Al-Husseini was clear to add that he does not view himself as part of the "peak oil camp," and does not agree with analysts such as Matthew Simmons. He considers himself optimistic about the future of energy, but pragmatic with regards to what resources are available and what level of production is possible. While he fundamentally contradicts the Aramco company line, al-Husseini is no doomsday theorist. His pedigree, experience and outlook demand that his predictions be thoughtfully considered. END COMMENT.

Death


Simmons’ lifeless body was found August 8, 2010, in his hot tub. An autopsy by the state medical examiner’s office the next day concluded that he died from accidental drowning with heart disease as a contributing factor.
Many conspiracy theorists believe Simmons was killed for his views on the "cover up" concerning both B.P.s' and the U.S.A's deception about the Gulf oil spill, claiming it had never really been cleaned up nor the leak ever stopped.

Further reading

  • Matthew Simmons, Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy 2005 ISBN 0-471-73876-X, The book has been translated into German and Chinese.

See also

  • Richard Heinberg
    Richard Heinberg
    Richard Heinberg is an American journalist and educator who has written extensively on energy, economic, and ecological issues, including oil depletion. He is the author of ten books...

  • Jeremy Leggett
    Jeremy Leggett
    Jeremy Leggett, a geologist by training, began his career as a consultant for the oil industry, while teaching at the Royal School of Mines . His research on earth history was funded by oil companies BP and Shell,among others...

  • Dale Allen Pfeiffer
    Dale Allen Pfeiffer
    Dale Allen Pfeiffer is a geologist and writer from Michigan, U.S. who has investigated and written about energy depletion and potential future resource wars. He has also written about class war, sustainability, direct action and the environment. He is also an anarchist activist and a member of the...

  • Peak oil
    Peak oil
    Peak oil is the point in time when the maximum rate of global petroleum extraction is reached, after which the rate of production enters terminal decline. This concept is based on the observed production rates of individual oil wells, projected reserves and the combined production rate of a field...

  • Simmons–Tierney bet
  • Cornucopian
    Cornucopian
    A cornucopian is a futurist who believes that continued progress and provision of material items for mankind can be met by similarly continued advances in technology...


Book


Articles


Presentations


General