When the well finally runs dry Investment banker Matthew Simmons says an oil shortage chain reaction could be coming, although his critics sharply disagree By LYNN J. COOK Copyright 2005 Houston Chronicle
Saudi Arabia says it has enough oil to keep the world happy for at least another 70 years.
But the closely guarded Saudi Aramco numbers that would back up that claim aren't available to outsiders. That worries Houston investment banker Matthew Simmons.
Simply put, Simmons doesn't think energy-intensive countries like the United States should take Saudi Arabia at its word. He contends that the country's official oil reserve count could be overstated and the kingdom's oil production could decline, throwing the world's supply-and-demand balance off-kilter and jacking up prices for years to come.
"If I am correct ... and the risk materializes, it could create a series of unintended problems that quickly careen out of control and turn into a genuine global crisis if no one is prepared," Simmons told an audience at the Houston Club last week when he launched his book, Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy which hits bookstores nationwide today. "Conversely, if we are well-informed and we prepare for a post-peak oil era, the world could learn to navigate this process."