The coming decline of oil and a few things to do about it

foreign policy conducts an interview with matthew simmons...

(Matthew Simmons, chairman of Simmons & Company International, is author of Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy...)

MS: I think there’s a strong possibility that 10 years from now, we’ll be producing 75 million bpd, down from about 85 million bpd today. That doesn’t mean that we’ve run out. But it is a cataclysmic event unless we gear up and understand what it’s all about.

[...]

FP: Which countries are best positioned to deal with a decline in oil production?

MS: Papua New Guinea. Unfortunately, that’s an honest answer. The countries that haven’t yet built a society that needs an exponential amount of oil are in the best shape. Around 30 years ago, around half the world didn’t really use oil. And now look, cities like Hanoi have millions of motorcycles they didn’t have five years ago. We’ve built the global economy based on the false assumptions that oil is just another commodity, that the Middle East has basically unlimited amounts of oil, technology will improve, and that the price of oil would get progressively cheaper.

[...]

FP: If you were the secretary of energy right now, what policies would you recommend to President Bush?

MS: If we restructure the way we use fuels, we might be able to get along very well with oil in decline. The single-most energy inefficient way we use oil is large trucks delivering goods over large distances. If you take all the goods that are trucked more than, say, 50 miles, onto railroad tracks, depending on the length of travel, you’d use between 3 to 10 times less energy. If you put them on a marine vessel, it’s even more efficient. So forget about just-in-time inventory. Once you get the large trucks off the road, you make a tremendous dent in traffic congestion, which is public enemy one through five on passenger car fuel efficiency.

We also need to embrace the concept of distributed work. In most of our non-manufacturing commercial jobs, we assume that it’s better to have a lot of people working at the same site, even though it’s not necessary. By allowing people to work at home and keep their jobs, all they have to do is invest in communications such as video conferencing, the Internet, and cell phones. We also have to change the way we distribute food. An amazing amount of the global food supply is transcontinental and produced by energy-intensive large-scale agriculture. Whole Foods, a successful grocery retailer, has basically created organic farming near each store it builds. The produce is less energy-intensive to grow and ship.

it's always interesting to read things that make sense on their face... reducing otr (over-the-road) trucking... yeah, you bet... changing work patterns... certainly... i always appreciate reading things from those who not only have credentials but are also intuitively sensible...

(from the publisher of simmons' book...)

"Twilight in the Desert looks behind the curtain to reveal a Saudi oil and production industry that could soon approach a serious, irreversible decline. In this exhaustively researched book, veteran oil industry analyst Matthew Simmons draws on his own three-plus decades of insider experience and more than 200 independently produced reports about Saudi petroleum resources and production operations. What he uncovers is a story about Saudi Arabia's troubled oil industry, not to mention its political and societal instability, which differs sharply from the globally accepted Saudi version."

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