264. SIMMONS' PREDICTIONS FLOP... PATHETICALLY
The latest sensation in the peak oil community is yesterday's CNN program We Were Warned -- a one hour program about oil issues which you may have seen. On the whole, the peak oilers weren't too impressed by the program. They felt it was pablum and didn't really address the dire, depressing crisis that they see "almost just verging around the corner".
One exception, however, was the interview with Matt Simmons. True to form, Matt Simmons ran off at the mouth, and gave the doomers one of those S-C-A-R-Y doggy bones they so desperately crave:
In his book, "Twilight in the Desert," Oil Analyst Matthew Simmons argues we're nearing the point when the world will use more oil than it can produce.Yup, you read that right... "chaos". That's the American code word for having to car pool or ride the bus. The horror! The horror!
(on camera): Do you hear a ticking clock? MATTHEW SIMMONS, AUTHOR OF "TWILIGHT IN THE DESERT": I hear a gong. I heard a ticking clock during the '90s.
SESNO: And if we don't act? Something doesn't change?
SIMMONS: Well, our life could get a lot darker fast.
SESNO: What is your worse case scenario?
SIMMONS: My worst case scenario is so bad that you don't want to go there.
SESNO: Tell me.
SIMMONS: We basically end up having a series of energy wars over who gets oil. And they're wars between you and your neighbor. And the war is between one town and another, and ultimately one country and another.
SESNO: Chaos.
SIMMONS: It's just total chaos.Source
I don't think Simmons has thought this through, however. I mean, if it's going to be all-out war between municipalities, have they considered parking? I don't think we can really expect morbidly obese American oompah-loompahs to waddle all the way to these bloody conflicts. In fact, we'll probably see some of the fiercest fighting over the handicapped slots closest to the battlefield.
Anyway... Since Mr. Simmons' has become the latest font of doomer hype, it behooves us to take a look at some of his previous predictions. More specifically, today is the first day of spring, so let's take a little trip down memory lane and see how Simmons' predictions for the winter of 2005-2006 fared.
On July 4, Simmons warned of $100 oil:
Warning of $100-a-barrel oilApparently, this wasn't spooky enough, so in October Simmons ratcheted up the hype to $190 crude:
The Scotsman, July 4 2005
ROCKETING oil prices might hit $100 (£57) this year, controversial
Texan oil analyst Matt Simmons has warned.
Crude surged past $60 a barrel last week and investors are pinning
their hopes on a build-up in US oil-stocks to bring the price down
again in the coming months. However, Simmons said surging demand will
keep prices well above $50.
"We could be at $100 by this winter," he said. "We have the biggest
risk we have ever had of demand exceeding supply. We are about to face
up to the biggest crisis we have ever had."Source
Oil guru says crude could hit $190 this winterHate to be blunt, but it's almost like Simmons has become a media whore. Here's Simmons in September predicting $10 gasoline for the winter:
'Prices are really cheap today and they need to go a lot higher,'
analyst says
Reuters 0ct. 19, 2005
OTTAWA - Consumers should brace for crude oil and natural gas prices
possibly doubling or tripling this winter, Matthew Simmons, a
best-selling author and oil-supply bear, said on Wednesday.
"Prices are really cheap today and they need to go a lot higher, and
they probably will go a lot higher," Simmons said in Ottawa.
"I am very concerned, given the destructive damage done by (Hurricanes)
Katrina and Rita, that the United States must be closer to starting to
see significant product shortages than we've seen since 1979."
Too much got destroyed and too little has been brought back on stream,
the Houston-based analyst said.
He also said that cold weather this winter could bring a very high risk
of natural gas curtailment in the United States.
"Either one of those events (oil product shortage or natural gas
shortage) could send prices two to three times higher than they are
today," he said after a speech in Ottawa.
That could translate into natural gas prices of $40 per million British
thermal units from more than $13 now, he said. Doubling or tripling
crude would put it in the range of $125 to $190 per barrel. Source
Matt Simmons Issues a Wake Up Call Energy THE Of FutureAnd then there was the cherry on top of this whole fudge sunday of escalating bullshit -- Simmons' prediction of $330-$650 crude, and $12.50-$25.00 gasoline, kindly calculated by peak oil know-it-all Matt Savinar over at LATOC(click to enlarge, Source):
By Jeanne Klobnak-Ball
9.28.05
Like the terrorist attacks of 9/11, Hurricane Katrina stands to become
a defining moment in our nation's history. While the precise meaning of
such moments remains to be interpreted, Matt Simmons believes the
natural disaster may well be remembered as the start of "our great
energy war." "We're almost at the verge of having real energy
shortages," Simmons said last Friday, when he issued a wake-up call to
a standing-room only audience at the Center for the Arts. "We could be
looking at $10-a-gallon gas this winter."
Author of "Twilight in the Desert: The Coming Saudi Oil Shock and the
World Economy" and founder of Simmons and Company International, a
Houston-based energy investment banking firm managing over $60 billion
in assets...Source
Had to archive the screenshot of that one. Wouldn't want Matt&Matt pulling any funny stuff, and trying to squirrel their ridiculous rhetoric down the memory hole when they think nobody's lookin'. Anybody wanna wager on how long it's going to take Savinar to revise that page, now that we're all laughing at his silly red ass, like a monkey in the zoo?
Well then, since we've reviewed what the nutters and hysterics predicted for this winter, let's take a brief look at what actually happened in the real world. These are the actual stats from the EIA:
Gasoline never topped $2.50:
Crude barely topped $65.00:
Massive shortages predicted by Simmons never materialized. Inventories are at a 7-year high:
Enjoy that spring weather everybody! I know I will. ;-)
-- by JD
posted by JD @ 4:29 PM
18 comments
18 Comments:
Loved this line from the Simmons segment as well:
Oil Analyst Matthew Simmons argues we're nearing the point when the world will use more oil than it can produce.
What idiot was responsible for this slop?
Hi dub,
If I say "it could rain tomorrow", is that a prediction?
Yes it is, if you are all over the media making that statement repeatedly in order to warn people about the imminent rain crisis.
I guarantee you that if oil had hit $500 last winter, the peak oilers would have been carrying him around on a litter like some kind of Prophet El Supremo. That's the weasel game: if the prediction turns out right, Simmons gets all the credit, and if the prediction turns out wrong, Simmons doesn't get any of the blame. See how slick that works? It's classic MBA chicanery: privatize the gains, dodge the losses. I'm not fooled.
What a fucking hypocritical selfish bullshit attitude is that?
Simmons is very much a peak oil hypocrite, even in his personal life:
******
Q:What do you do personally to reduce your energy footprint?
A(Matt Simmons): Very little, actually. I do have a new Mercedes diesel car that on the open road gets up to 50 miles per gallon. But in fact I'm one of the problems right now. I'm flying around the country giving too many energy talks. If I really wanted to say I'm going to be a personal crusader, I'd actually shut up and stay home.
LINK
*****
However, Simmons said surging demand will keep prices well above $50.
Well, his first prediction seems to have been right. Have you ever believed a prediction from even a main-stream market analysis? Or from Greenspan, for that matter? Remember, he did not believe in PO because oil futures in 5 years were cheaper than in 3 months...
JD, where do you see the price of oil on Thanksgiving Day 2006?
Memorial Day 2007?
Remember, we WILL hold you responsible if your "could" does not transpire...
Dom
JD, where do you see the price of oil on Thanksgiving Day 2006?
Memorial Day 2007?
dom, I don't make predictions. I don't see any point in it. I'm interested in creating the future, not predicting it.
dom, I don't make predictions.
Right. Well.
Wouldn't want to disappoint your disciples with a false prophecy now, would you? (couldn't help but getting that jab in :)
Two years ago had a conversation with a worker at a gas station. I explained the peak oil thing. Wasn't real interrest. But when it came to price, he had a perfect answer - "next year it will be higher than today."
I think that kinna sums it up, now, don't it boys?
It looks like these assholes haven't grasped the skill of extrapolating yet.
With advances like these:
http://www.technologyreview.com/BizTech/wtr_16523,295,p1.html
we're all gonna have an extremely good laugh at all doomers.
I'm thinking about creating a blog with pictures of prominent doomer spokesmen, for the sole purpose of laughing at them.
Lemming, you're back in the trash can. Apologies for the infestation everyone.
Hi summerhome, welcome to POD.
What makes you think I want prices to go down? High prices are the solution, not the problem.
Also, I don't understand why you peak oilers are so hung up on making predictions. Especially since you guys are so consistently wrong. What's the payoff of predicting gasoline prices? What purpose does it serve?
I don't even drive, so why should I care where the price of gas goes?
JD--
Don't know if you've read the Salon Article yet, but you are mentioned. I posted this response and put in a plug for you:
...
We probably ARE at, or near, the global peak of conventional oil production. But that doesn't excuse the blatant fear-mongering and outright hyperbole of James Howard Kunstler, Matt Savinar, Richard Heinberg, Jan Lundberg, and their peak-oil doom cult. (Yes, I've read all their blogs and books.)
Reading between the lines, it's clear most peak-oilers actually wish doom and destruction on the current world politico-economic order. Many adherents are marginalized in the current system. They relish their fantasies of halcyon eco-villages, and the collapse of globalism and existing urban power structures. Finally, they chortle, the era of the "common people" has arrived, free of government and corporate domination. As oil-refineries worldwide gurgle to a halt, they envision a paradise for healthy, physically fit, mostly vegan, do-it-yourselfers. It's laughable. It's pathetic.
Last time we tried such tribalism, there were a lot fewer people on the planet--and they still managed to brutally slaughter each other in large numbers.
Thankfully, it won't come to this. There will be a period of energy transition, and contrary to peak-oil doomthink, the solution will be part economic, and part technological. Here it is, pure and simple: $3.00 gas didn't stop SUV drivers, but it nearly bankrupted GM. $6.00 or $10.00 gas will kill or transform GM once and for all, put the road-behemoths permanently in park, and restore some sanity to Americans' profligate sense of energy entitlement.
The government may be forced to step in and deal with shortages. But that doesn't mean it will collapse. If you don't think the military has first rights to any oil in this country, think again. Martial law would be declared in any kind of 'doomsday' situation. There's a far greater chance of internment camps than eco-villages in that scenario.
Last time we had those kinds of shortages in WWII, the government issued ration coupons. We Americans have a lot of fat in our energy diet. We are SPOILED ROTTEN. We could easily, and I mean easily cut our fossil energy consumption in half, almost overnight if necessary. (Carpooling, public transport, change all light bulbs to half wattage, turn off heat to rooms we aren't using, ride bicycles, use organic waste in place of fertilizer, turn lights and computers off in office buildings at night, and stop WHINING!)
I'm here to agree on one point with the peak-oilers: we will be forced to cut our oil consumption. And it will paradoxically be great news for future forms of energy. Amory Lovins' Rocky Mountain Institute is right on the money. And the only reason why his plans haven't been taken more seriously until now is because oil has been dirt cheap!
Both private and National Oil Companies know that they stand to make 5-10 times the money on the downslope of the peak as what they have made up to this point. Think you hate the Oil Sheiks now? The West is about to get into a bidding war with China and India over oil. Prices could hit $150-200 per barrel or more.
Wickedly high prices will be the bitter medicine America (and the world) needs to go cold-turkey. The coming energy shock will not only prove peak-oilers wrong, it will kickstart the long-overdue energy transition like the "chorus of doom" never could. As prices rise, demand will plummet. It will only be a matter of time before new energy extraction and production methods take over, and energy prices moderate worldwide. Some of this is already happening, such as in Brazil, which produces almost 20 percent of its transport fuel from sugar cane, and it's already cheaper than gasoline. Or globally with wind power, now the fastest growing energy source. If enough alt-energy comes on line in the next few years, we might not even have to go through such a traumatic shock. And--there's a silver lining to the energy transition: a better, healthier lifestyle, with far less CO2 production!
Either way, sell your SUV, and buy an efficient hybrid car or diesel (not a bullshit luxury hybrid). Buy stock in clean-tech companies. Buy E85 or biodiesel if you can find it. Plan to telecommute in the future. But don't waste your money on survival gear, or your life by drinking the peak-oil kool-aid. Don't take my word for it, pay a visit to JD over at Peak Oil Debunked. His writing style is great, and you'll see why human ingenuity will ALWAYS find enough energy to power the future.
Please note that we are SAVED by an EXTREMELY warm winter, which every one has got to agree that is pretty unusual. Had it been an average winter, or even a bit colder. We would have been in a much worse situation in terms of energy price, Matt Simmons' prediction could have a real chance of become reality had it been a cold winter for USA.
quontoken. lets all hold hands and prey for a hard winter next year!
It's Jan. 2008 and $100 oil looks pretty real. I think that Simmons just thinks that the potential for supply disruptions is great, as there is no siginificant spare capacity. The question is, when and where will the price top out. This year ... next ... the next? At $100 ... $200 ... 300? To start to answer that question, one has to know the cause of the price rise in the first place. Peak oil?
"Every product you consume requires immense energy to produce, every dollar you spend eventually ends up in the hands of "Big Oil"..."
This is emphatically false. That fancy haircut consumed miniscule quantities of oil per $ while those new tires cost several gallons each to make.
To pre-empt the inevitable follow-up: 'Oh yeah, but the hair-dresser eventually spends that on something that consumes oil'. So? All that money is eventually spent on cheese at one point or another; proving that we are all in the hands of big cheese.
"...every sip of clean drinking water you take is a result of energy-intensive purifying processes."
Oil is not electricity. Electricity is not threatened by peak oil.
"In the end, our entire way of life is dependent on a continuous source of virtually free energy."
And peak oil is first and formost a liquid fuels crisis and not an energy crisis.
"Do you grow ALL the food you eat in your own backyard?"
Energy inputs to the food supply are mostly in the form of natural gas for N-fertilizer(ammonia can be produced from electricity at economical rates.), phosphate mining(largely dependent on electricity, not oil. Uranium can and often is co-mined.) and transportation; the pesticide and oil input of the machinery is insignificant.
Transportation is clearly the only part of the food supply situation threatened by peak oil. Freight trains and ships are both very efficient and amenable to substitution; so the real problem is getting the goods from the warehouse to the store, i.e. local distribution.
In the near term we can quite easily double efficiency by using longer more aerodynamic trucks. We can significantly increase efficiency by not eating as much meat. The scale of this problem is small enough that it will be decades before we'll finally be forced to come up with a viable long term solution. Worst comes to worst and we don't manage to electrify on time we can probably get by with growing energy crops on a small fraction of land for this problem; worked well enough for horses.
The hard problem is still personal transportation. The scale of the problem makes it hard to electrify in the near future. The scale of the problem makes bio-fuels capable of sustaining it very doubtful. The good news is that much of this is just discretionary and that car-pooling, better mileage, regenerative breaking and busses can stall for long enough to move people closer to their work and get some decent public transport online before it really hits the fan.
"Do you produce ALL the electricity for the appliances you use in your house (in a sustainable manner - like PV)?"
The electricity supply isn't dependent on oil and is not threatened by peak oil. My electricity supply is ~45% hydro-electric and ~50% fission. Uranium is so abundant in the Earths crust that it will be millenia before we need to think about replacing it even if we replace the entire worlds electricity supply with fission. The end of fission power will be due to finding a cheaper/better power source.
Peak oil is an (affordable) portable fuels crisis, not an electricity crisis.
"Do you have a source of water (with exception to rain, which won't be enough quantity needed for showers/baths/flushable toilets) and a means to purify it (again, in a sustainable manner)?"
I live in Sweden. We couldn't waste enough water to draw down water tables even if we wanted to.
"And I'll be nice and assume you live with tolerable summer heat and mild winters (ridding the need for HVAC - superunlikely)."
I live in a block of flats with proper insulation and triple glazed windows. Heating is supplied by cogeneration in a local power plant. Unless it's about 10 degrees C below zero I keep the radiator closed; just living in the room and having a modest 100W or so heating from lighting and a computer is enough to get ~16-20 degrees C room temperature. There's no cooling in the summer whatsoever.
If I had to do completely without heating I might have to wear a thicker sweater for a few weeks out of the year. If you can't tell, I'm so scared I nearly soil myself.
If you feel compelled to try and save american style suburbs from some inconvenience I guess you can advocate ground source heat pumps and proper insulation.
It is now March 13th, 2008 the oil price went up but not b/c of a growing gap between supply and demand. In fact, just today I went to the gas station and filled up my car and drove by at least 15 working gas stations with no lines around the block. There are no major supply shortfalls except at a couple dozen gas stations in China b/c they don't have any refining capacity.
The price increases have largely occured due to speculation, devaluation of the dollar, and a perceived risk of supply disruption.
So, maybe Simmons was right about the price, but for all the wrong reasons. I guess sometimes even the biggest nut job in the oil industry can't be wrong 100% of the time.
From my vantage point, it looks like $100 oil is not dragging society to a halt. In fact, I think I'll drive down to McDonalds for a cheeseburger and then to the wal-mart 25 miles away for some socks and then 30 miles to the movie theater.
I hope Savinar's freeze dried food hasn't spoiled yet.
we're hitting all time record highs on a daily basis and supply is declining.
Where do we go from here?
Where do we go from here? Straight down the dumper, baby. Simmons, Savinar, et al have it right.
So Simmons was out by a year or two, not bad. Looks like us doomers have the last laugh.
Well, you can buy a barrel of oil for $44 today.
Again, doomer's forecast will have to be postponed...
Supply might be finite, but demand is not fixed.
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