Matthew R. Simmons, an energy
investment banker and a leading proponent of the “peak oil”
theory that claims the Earth is running out of crude, died
yesterday.
Simmons, 67, died in an accidental drowning at his home in
Maine, local officials said.
Simmons started Houston-based Simmons & Co. in May 1974
with a focus on the oil-services industry, according to the
company’s website. The firm expanded to offer research,
institutional sales and investment banking in the energy
industry. Simmons promoted the idea that world oil reserves are
peaking, and he explored the implications in a 2005 book called
“Twilight in the Desert.”
“In the history of the petroleum era, Matt Simmons will be
remembered for calling attention to ‘peak oil,’” T. Boone Pickens, chairman of BP Capital LLC, said in an e-mailed
statement. “You had to admire his advocacy and his ability to
focus on the need to better prepare for a new energy future.”
Emergency medical workers responded to Simmons’s home a
little before 10 p.m. local time yesterday, said John Dietter, a
crew chief in North Haven, Maine. The official cause of death is
drowning, and he was found in a hot tub, said Tara Harrington,
medical associate at Maine’s Office of Chief Medical Examiner.
“It was an accident,” Harrington said today in a
telephone interview. She said “heart disease” was listed for
the category of “other significant conditions” on the death
certificate.
‘Very Good Analyst’
“He was somebody that was very comfortable challenging
conventional wisdom, someone that thought beyond the near term
and was a very good analyst in terms of identifying big
trends,” said Dan Pickering, who worked at Simmons & Co. from
1996 to 2004 and is now co-president of the Tudor Pickering Holt
& Co. investment bank in Houston.
On a tour of Saudi Arabia’s oil industry in 2003, Simmons
was inspired to estimate the world’s largest oil reserves, and
from research that included poring through neglected engineering
data, determined that the country was close to or nearing peak
output, Peter Maass wrote in his book, “Crude World: The
Violent Twilight of Oil.”
“He built his own energy firm and, having done that
successfully, used his knowledge of the industry to challenge
one of its biggest accepted truths -- that there are nearly
unlimited quantities of oil in the world,” Maass said today in
an e-mail.
Demand Concerns
Demand for energy has become a “runwaway train that cannot
be easily slowed or reversed,” Simmons said in a slide
presentation in May at the Offshore Technology Conference in
Houston.
“We are in early stages of a global train wreck when
demand outstrips supply and shortages begin,” according to the
slides on the website for the Ocean Energy Institute, which
Simmons founded in 2007 to explore opportunities for harvesting
energy from the seas. He is survived by his wife Ellen and their
five daughters.
In May 2008, Goldman Sachs Group Inc. analysts said crude
might rise to between $150 and $200 a barrel on increased demand
from developing countries that supply could fail to match.
Simmons said July 16 of that year that oil was more likely to
hit $200 per barrel than drop to $50 over the next six months.
Record Oil Price
Oil did touch a record, hitting $147.27 a barrel in July
2008 in New York futures trading. Crude fell to $44.60 at the
close of 2008 and hasn’t returned to triple digits following a
global recession that cut demand.
Rising prices raised awareness of peak oil, said Ted
Harper, who helps manage about $6.8 billion in assets at Frost
Investment Advisors in Houston. Harper said he thinks the
industry is at or near peak output capacity, though he didn’t
fully endorse peak oil, which has seen its prominence fade.
Interest in whether global oil production has plateaued or
peaked has waned as prices have remained well below their 2008
high, Harper said.
Arthur Berman, a geologist who lives near Houston and
writes for the Oil Drum energy website, said he shared Simmons’s
views on peak oil. Simmons did have “some peculiar ideas” on
the BP Plc spill such as the size of the disaster, Berman said,
and he’d hoped to talk with Simmons about the reasons for some
of his thoughts.
Simmons was a frequent critic of BP’s efforts to stanch its
oil spill in the Gulf of Mexico, suggesting at one point that
the best option would be to detonate a small nuclear bomb
undersea to kill the well.
On June 16, Simmons announced his retirement as chairman
emeritus from Simmons & Co. so he could focus on the Ocean
Energy Institute.
To contact the reporters on this story:
Edward Klump in Houston at
eklump@bloomberg.net;
David Wethe in Houston at
dwethe@bloomberg.net.