Peak? What energy peak?

This will knock your socks off.

For those oil enthusiasts who believe that petroleum will remain abundant for decades to come -- among them, the President, the Vice President, and their many friends in the oil industry -- any talk of an imminent "peak" in global oil production and an ensuing decline can be easily countered with a simple mantra: "Saudi Arabia, Saudi Arabia, Saudi Arabia."

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But now, from an unexpected source, comes a devastating challenge to this powerful dogma: In a newly-released book, investment banker Matthew R. Simmons convincingly demonstrates that, far from being capable of increasing its output, Saudi Arabia is about to face the exhaustion of its giant fields and, in the relatively near future, will probably experience a sharp decline in output.

This guy is no wild-eyed "eco-terrorist" either.

Matthew ("Matt") Simmons is not a militant environmentalist or anti-oil partisan; he is Chairman and CEO of one of the nation's leading oil-industry investment banks, Simmons & Company International. For decades, Simmons has been pouring billions of dollars into the energy business, financing the exploration and development of new oil reservoirs. In the process, he has become a friend and associate of many of the top figures in the oil industry, including George W. Bush and Dick Cheney. He has also accumulated a vast storehouse of information about the world's major oil fields, the prospects for new discoveries, and the techniques for extracting and marketing petroleum. There is virtually no figure better equipped than Simmons to assess the state of the world's oil supply. And this is why his assessment of Saudi Arabia's oil production capacity is so devastating.

Oh, and natural gas in North America? Peaked, according to Exxon. And adding new pipelines won't help.

"Gas production has peaked in North America," Chief Executive Lee Raymond told reporters at the Reuters Energy Summit.

Asked whether production would continue to decline even if two huge arctic gas pipeline projects were built, Raymond said, "I think that's a fair statement, unless there's some huge find that nobody has any idea where it would be."

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