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Econ101: Peak Oil Theory; Matt Simmons (Bloomberg): Peak Oil Now, Oil Perhaps to $300



May 04, 2008 – Comments (2) | RELATED TICKERS: OIH , HAL , KBR

“My friends, I will have an energy policy which will eliminate our dependence on oil from Middle East that will then prevent us from having ever to send our young men and women into conflict again in the Middle East.”

John McCain admits Iraq War was over oil 

Peak oil is a major investment theme. It could be largest investment theme moving the market today. Oil has gone from $20 to $116 in seven years. Oil is used in: food, transportation, packaging, energy, plastics, fertilizers, etc.... You should have an educated opinion on the Peak Oil Theory if you are buying stocks, because of the impact of oil on the overall market. 

Peak oil From wikipedia: 

"Peak oil is the point in time when the maximum rate of global petroleum production is reached, after which the rate of production enters its terminal decline. If global consumption is not mitigated before the peak, an energy crisis may develop because the availability of conventional oil will drop and prices will rise, perhaps dramatically. M. King Hubbert first used the theory in 1956 to accurately predict that United States oil production would peak between 1965 and 1970. His model, now called Hubbert peak theory, has since been used to predict the peak petroleum production of many other countries, and has also proved useful in other limited-resource production-domains. According to the Hubbert model, the production rate of a limited resource will follow a roughly symmetrical bell-shaped curve based on the limits of exploitability and market pressures.

Some observers, such as petroleum industry experts Kenneth S. Deffeyes and Matthew Simmons, believe the high dependence of most modern industrial transport, agricultural and industrial systems on the relative low cost and high availability of oil will cause the post-peak production decline and possible severe increases in the price of oil to have negative implications for the global economy. Although predictions as to what exactly these negative effects will be vary greatly, "a growing number of oil-industry chieftains are endorsing an idea long deemed fringe: The world is approaching a practical limit to the number of barrels of crude oil that can be pumped every day."[1 "

Here is a good chart

Matt Simmons (Bloomberg): Peak Oil Now, Oil Perhaps to $300

Oil Supply Shock - March 29, 2007


I think this i a cut from Crude Awakening (9 minutes)


The End of Oil Part 1 Of 6

The End of Oil Part 2 Of 6


The End of Oil Part 3 Of 6


FYI - Of interest / counter arguement from 8 Mar 1999:  

The Economist predicts low oil prices for foreseeable future From: Harriet Griffin <>Subject: The Economist predicts low oil prices for foreseeable futureDate: Mon, 8 Mar 1999 15:35:19 -0000


2 Comments – Post Your Own

#1) On May 04, 2008 at 3:37 PM, HooDaHeckNose (74.34) wrote:

Holy Crap!

Thanks (I think) for all of this. I watched every single video and am now completely depressed ;D The evidence is quite compelling and I'm left pondering what to do about it.


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#2) On May 05, 2008 at 12:33 AM, lquadland10 (< 20) wrote:

If they can't manipulate us with global Warming then they will  with oil terror. One more way to tank the economy and the Amero dollar and  joining the 3 countries.  
Honda Introduces Experimental Home Energy Station IV
Appliance-like device may help solve problem of hydrogen supply for fuel cell vehicles

Honda today announced that it has begun using the Home Energy Station IV at its Honda R&D Americas, Inc. facility in Torrance, California. This fourth-generation experimental unit is designed to provide fuel for a hydrogen-powered fuel cell vehicle, as well as heat and electricity for a home. The new system is more compact and efficient, with a lower operating cost than previous models. The announcement coincides with the world debut of the all-new FCX Clarity hydrogen-powered fuel cell vehicle at the Los Angeles Auto Show.

Honda's Home Energy Station technology is designed to facilitate the broader adoption of zero-emissions fuel cell vehicles, like the FCX Clarity, by developing a home refueling solution that makes efficient use of a home's existing natural gas supply for production of hydrogen, while providing heat and electricity to an average-size home.

The Home Energy Station IV can reduce both cost and carbon dioxide (CO2) emissions for the consumer. Compared to the average U.S. consumer's home with grid-supplied electricity and a gasoline-powered car, a home using Home Energy Station IV to help produce heat and electricity and also to refuel an FCX Clarity can reduce CO2 emissions by an estimated 30 percent and energy costs by an estimated 50 percent.

"Honda is striving to address the need for a refueling infrastructure for hydrogen fuel cell vehicles," said Ben Knight, vice president of Honda R&D Americas. "The Home Energy Station represents one promising solution to this issue, while offering the added benefit of heating and powering the home more efficiently."

Working with technology partner, Plug Power, Inc., Honda began operation of a Home Energy Station in October, 2003. Home Energy Station IV represents the latest evolution of the technology with a 70 percent reduction in size compared to the first unit, making it even more suitable for household installation. By combining gas purification and power generation components, overall size reduction and efficiency gains are achieved, while enabling it to switch from hydrogen refining to power generation when needed.

For more information or downloadable high-resolution images of Home Energy Station, the Honda FCX Clarity and other Honda vehicles, please visit Consumer information is available at

      Mike Ruppert & Peak Oil Tuesday, May 29th, 2007

Ian R. Crane

I have learned recently that Mike Ruppert was taken seriously ill in Venezuela and is now recuperating in Canada. It’s very sad to hear of Mike’s predicament and wish him a full and speedy recovery. I suspect that Mike has for some time now realised that he is caught up in a web of intrigue which goes far beyond anything he ever dreamed of when he ’signed up’ to poularise the myth of Peak Oil.

‘Crossing the Rubicon’ is a critical part of the official mythology.

I have good reason to suspect the hand of John M. Deutch behind Mike Ruppert’s transition from pioneer of 9/11 Truth to purveyor of Peak Oil mythology. It’s no great secret that Mike made a life-long enemy of Deutch when he exposed CIA drug running during Deutch’s tenure as head of that organisation.

As a non-executive director of Raytheon, Deutch has benefited personally from the rewards associated with the massive increase in arms sales, as a result of the illegal wars in Afghanistan & Iraq. However, his personal financial profit from Raytheon pales into insignificance when compared with the five fold increase in the stock price of Schlumberger, where he has been on the board of directors since 1997 (the year before I left Schlumberger after 19 years; the last three and a half years being based in the NeoCon capital, Houston Texas).

The price of oil in 1999 bottomed at $9.81 per barrel; a figure that was considered to be far too low to sustain an appropriate level of investment in the industry. The US oil industry was also concerned that if Iraqi oil came back on full stream any time soon, it could depress prices even further. This would not only have a serious negative effect on the oil industry but would also be detrimental to the flow of the US$ in the international financial markets; thereby reducing the ability of major oil producing countries to purchase US goods & services. With the Clinton/Gore regime showing little enthusiasm for addressing these issues, the Neo-Cons saw the window of opportunity to change the political landscape with the forthcoming (2000) presidential election. Taking their lead from Zbigniew Brzezinski’s 1997 book, ‘The Grand Chessboard’, the Neo-Con think-tank known as ‘The Project for the New American Century’ produced their blueprint for an aggressive US foreign policy in their September 2000 report titled, ‘Rebuilding America’s Defenses – Strategy, Forces & Resources for a New Century’.

Once in office, Dick Cheney commissioned a report on behalf of his oilfield buddies (Cheney was CEO of Halliburton from 1995 until being elected/appointed vice-President in 2000) titled, ‘Strategic Energy Policy Challenges for the 21st Century’. The report was supposedly produced by ‘An independent Task Force, sponsored by the James A. Baker III Institute for Public Policy of Rice University and The Council on Foreign Relations’. One of the participants in the discussions leading to the production of this report was ‘Kenny boy’ Lay; none other than the now disgraced (and supposedly deceased) ex-CEO of ENRON and major contributor to the Bush/Cheney 2000 campaign fund. Another of the signatories of this report was Thomas F. McLarty, Vice-Chairman of Kissinger McLarty Associates, listed as ‘an international strategic advisory firm’. An Independent Task Force? Need I say more?

However, one of the lesser known but most significant participants in the production of this document was one Matthew Simmons, President of Simmons & Company International, a specialised energy investment bank. Simmons is also a member of the National Petroleum Council and Bush/Cheney Energy Transition Advisory Committee and past Chairman of the National Ocean Industries Association. Whilst Colin Campbell takes the credit for re-awakening interest in the work of Dr. Marion King Hubbert (he didn’t like the name Marion, so he had everyone address him as ‘King’), Matthew Simmons, who admits to first reading Campbell’s hypothesis in 1996, was instrumental in translating the basic tenets of Hubbert’s depletion theory into an investment context. All that remained was to get the principles of the theory into the mass consciousness. A strategy that would be absolutely critical in softening the public reaction to the growing realisation that Weapon’s of Mass Destruction would never be found in Iraq; as admitted by Paul Wolfowitz in 2003 that the myth of WMD’s was created for political expediency (link:

Consequently, it was essential that the American public were initiated into the theory of ‘Peak Oil’ as rapidly as possible. Only Mike Ruppert knows the detail of the circumstances which lead to his infamous interview with Matthew Simmons on August 18th, 2003. The reality is that this date was the turning point for Mike Ruppert; by early 2004 Mike had turned his attentions away from exposing the fraud of 9/11, focusing instead on promoting and popularising the theory of ‘Peak Oil’. As a direct result of his outstanding work on 9/11, the majority of his acolytes followed Mike blindly into the very plausible but selectively simplistic theory of ‘Peak Oil’. By encouraging Ruppert to incorporate the concept of ‘Peak Oil’ into ‘Crossing the Rubicon’, Simmons was able to ensure that the concept of ‘Peak Oil’ went ‘mainstream’, particularly amongst the 9/11 skeptic community, within a matter of months. The subliminal message being that even if the events of 9/11 don’t stand up to scrutiny and the attack on Iraq had been somewhat less than legitimate, these events were a necessity if we (the gas guzzling USA) are to retain our oil dependent life-style … ‘cos ultimately, we the (USA) come first; although the gentlemen of AIPAC & the ADL might have other priorities … but more on that particular issue another time!

Deutch, a member of the Council on Foreign Relations, is a serious playmaker; a talent that Euan Baird, Andrew Gould’s predecessor as CEO of Schlumberger, would have been well aware of in selecting him to serve as a non-executive Director, despite the fact that there was a serious cloud over the legality of his activities and behaviour while head of the CIA, thanks largely to the tenacious investigative work of a guy by the name of … Mike Ruppert. It was reported that Mike Ruppert, single-handedly, cost CIA Director John Deutch his guaranteed appointment as Secretary of Defense after confronting him at Locke High School with hard facts about CIA drug-dealing (President Clinton pardoned Deutch on his last day in office). Based upon the circles in which they move, it is unthinkable that Deutch and Simmons (also a member of the CFR), would not have crossed each others paths on numerous occasions but if any confirmation were needed that these two major players have had considerable direct contact, look no further than an organisation called ‘Resources for the Future’, where both Deutch and Simmons serve as Board Members! Deutch’s membership the CFR, his previous membership of the intelligence community, coupled with his Phi Beta Kappa connections, would have been more than enough to ‘arrange’ for the highest profile 9/11 antagonist, to become the populariser of Peak Oil, either wittingly or otherwise!

As an aside, it is interesting to note that Deutch was invited to be the Phi Beta Kappa orator at Harvard in June 2005, delivering a speech to recent PBK graduates during which he questioned the wisdom of retaining US forces in Iraq. Co-incidentally, this speech was delivered exactly one month prior to the London bombings. In 2006, Deutch then chaired the Independent Task Force established by the Council on Foreign Relations to produce the report on ‘National Security Consequences of US Oil Dependency’, a role in which he was able to bring fellow Schlumberger Board Member Linda G. Stuntz to the attention of the CFR.

As a further aside, Jamie Gorelick, another Schlumberger Board Member and member of the CFR, was instrumental in ensuring that the 9/11 Commission stayed ‘on message’ … but more on her another time.

All that said, I do not advocate a continuation of ninety million barrel per day consumption … but who do you think owns all the patents on alternative energy? The oil & gas industry has much to answer for but by touting and perpetuating the myth of peak oil, my ex-colleagues in the oil industry are laughing all the way to the bank, cashing in stock options that lay moribund for almost twenty years but have in the past three years, provided them with access to wealth beyond their wildest imagination. Just take a look at the obscene profitability reported by all the major oil companies since 2003. If any of the big boys seriously believed in Peak Oil they would be investing at much higher levels in new seismic exploration, new drilling techniques, reservoir management and stimulation processes, as well as the construction of new drilling rigs. In fact, they could easily double or even treble the current level of investment and still report record profitability. Why don’t they do it? Because the theory of Peak Oil has no traction within the industry. Why don’t they argue against it? Would you, when you are reaping the phenomenal benefits in ‘Shareholder Value’?

Schlumberger and Halliburton, the two major global oilfield services companies, come closest to declaring their interest in perpetuating the Peak Oil mythology by sponsoring Colin Campbell’s Association for the Study of Peak Oil (ASPO); not to be confused with an ASBO … although some might see some synergy between the two!

Meanwhile, Matthew Simmons & John Deutch make out like bandits, thanks primarily to the success in getting Mike Ruppert to take up the cause and popularise a theory that would have been far more difficult to implant in the wider consciousness, without his participation. Mike’s reward is poor health and life on the run.

I have this vision of John Deutch, wearing a wry smile as he monitors the SLB stock price while thumbing through his copy of ‘Crossing the Rubicon’, saying to himself, “Thanks Mike, you owed me.”

Selected supporting links:

The above observations and comments are summarised from my forthcoming book ‘Out of Darkness’, scheduled to be published Spring 2008.

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Or discuss this report in our our new forums     Why does anyone talk Honda about this on any of the news chanles?

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