Analyst sees end to oil's heyday
By Steve Raabe
Noted author and energy analyst Matthew Simmons spread the gospel of "peak oil" at a Denver conference Thursday, arguing that statistics clearly show an impending peak in world oil production, followed by a decline.
Meanwhile, outside conference doors, a person in a chicken suit passed out letters to attendees from Denver oilman Alex Cranberg, saying the issue is being perpetuated by "Chicken Littles" even though plentiful petroleum exists.
So goes the debate on how soon, if ever, the world needs to start worrying about falling supplies of its economic lifeblood.
"Peaking is a fact, not a concept," said Simmons, a Houston-based energy analyst and author of the new book "Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy."
Peak oil doesn't mean the Earth is running out of oil, several speakers said, but it suggests that after a presumed production peak in the next decade or two, oil will be harder to find, supplies will drop and prices will steadily rise.
The counter argument from peak-oil critics says supplies will continue to meet demand with discoveries of new oil fields, technologies that make extraction more efficient and the potential of nontraditional sources such as Canada's oil sands and Colorado's oil shale.
A group of about 450 at the Denver World Oil Conference listened to Simmons and other speakers explain that most of the world's big oil fields are mature and declining in production. Newer discoveries, Simmons said, aren't as big and won't yield oil for as long as the older fields.
Conference attendees included a contingent of environmentalists and renewable-energy advocates, but a show of hands during introductory remarks indicated that the largest group at the conference were petroleum-industry employees.
In addition to Simmons, who served as an adviser to the Bush presidential campaign in 2000, speakers included energy analysts such as Thom as Petrie, head of Denver- based energy investment bank Petrie Parkman & Co.; Jeremy Gilbert, former chief petroleum engineer for British Petroleum; and U.S. Rep. Roscoe Bartlett, R-Md.
Houston energy consultant Henry Groppe said oil could last for centuries but at prices much higher than current levels.
"You never really run out of oil," he said. "But many years ago we ran out of $2 (a barrel) oil, then we ran out of $25 oil, and now we're running out of $40 oil."
Cranberg, chairman of Aspect Energy LLC, said in an interview Thursday he wrote the letter disputing peak-oil theories "because I hate to see all of this 'sky is falling' talk without presenting the other side, when I feel I've got pretty good insight from my profession."
"My oil-industry colleagues and I have been fielding a lot of questions recently from Chicken Littles worried that petroleum is running out," Cranberg wrote. "What we do have is higher prices for energy due to higher demand from the developing world. These higher prices have already set in motion the very powerful market forces that will stimulate conservation and technology for new sources of oil and even non- petroleum alternatives."