Matthew Simmons, 67, Investment banker, energy adviser to G.W. Bush, Wrote book on peak oil theory
Hoodoo
MATTHEW SIMMONS | Investment banker was energy adviser to George W. Bush
August 10, 2010
http://www.suntimes.com/news/obituaries/2582688,CST-NWS-xsimmons10.article
ROCKLAND, Maine -- Matthew Simmons, an energy investment banker who
espoused the peak oil theory, became an advocate for alternative energy
and served as energy adviser to President George W. Bush, has died at
his North Haven island home, officials said Monday. He was 67.
The founder of Houston-based Simmons & Co. International wrote the 2005
book Twilight in the Desert: The Coming Saudi Oil Shock and the World
Economy, raising concerns about Saudi Arabia's oil reserves and laying
out his theory that the world was approaching peak oil production.
Two years later, Simmons founded The Ocean Energy Institute, a think
tank and venture capital fund in Rockland to promote offshore wind
energy research and development.
The institute is a part of the consortium led by the University of
Maine, which aims to design and test floating deep-water wind turbine
platforms.
Simmons' body was found Sunday night in his hot tub, investigators said.
An autopsy by the state medical examiner's office concluded Monday that
he died from accidental drowning with heart disease as a contributing
factor.
In 1974, Simmons founded Simmons & Co. International, which grew into
one of the largest investment banking companies serving the energy industry.
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Hoodoo
Energy insider issued wake-up call
Financier believed world was near peak oil production
By TOM FOWLER
HOUSTON CHRONICLE
Aug. 9, 2010, 10:35PM
http://www.chron.com/disp/story.mpl/business/7146548.html
http://www.chron.com/photos/2010/08/09/22828434/260xStory.jpg
Matt Simmons was highly regarded for his success providing financial
services to the oil and gas industry. He died Sunday at his vacation
home in Maine.
Investment banker Matt Simmons, who died suddenly over the weekend, was
an energy industry insider and presidential adviser whose profile soared
when he wrote that Saudi Arabia is running out of oil and world
production is peaking.
Simmons, 67, died on Sunday at his vacation home in Maine. An autopsy by
the state medical examiner's office concluded Monday that he died from
accidental drowning "with heart disease as a contributing factor."
Simmons was highly recognized in the industry for his success providing
financial services to the oil and gas industry as the founder of Simmons
& Co. He helped arrange billions of dollars in mergers, had a thick
Rolodex of international contacts and served as an energy advisor the
President George W. Bush.
But it was his 2005 best-selling book, Twilight in the Desert: The
Coming Saudi Oil Shock and the World Economy, that brought him a wider
audience.
The book argued that Saudi Arabia vastly overstated the size of its oil
reserves and that the world was on the verge of a severe oil shortage as
the largest oil fields become depleted. The book came from his personal
research into the oil field data.
The book gave new life to the theory called peak oil, which holds that
global oil production either has peaked or is about to, and drew new
attention to Simmons as the boom in consumption in China and India drove
oil prices to record highs in 2008.
"Single-handedly Matt set out on a crusade not to change the world but
to wake us all up," said Lad Handelman, a longtime friend who helped
found offshore energy firms Cal Dive International and Oceaneering
International.
But Simmons' zeal for his beliefs could come with a bite. He once
referred to a top oil executive as "a flake" in a Texas Monthly article.
In a Forbes interview, he said he was supporting then-Sen. Barack Obama,
the 2008 Democratic presidential candidate, because Sen. John McCain,
the GOP nominee, was "just witless" about energy issues.
More recently, he said that BP was about to file for bankruptcy
following the Gulf of Mexico oil spill and that the well was actually
gushing from a location several miles from the charted site — neither of
which proved true.
"I know Matt took on some controversial positions in his last few
months," Handelman said. "But that's Matt. If he believed in something
he would not hold back on it."
Drawn to Houston
Simmons was raised in Utah, in a Mormon family steeped in the banking
business. After attending Harvard Business School he started a side
business as a money manager for wealthy individuals while doing case
studies for professors.
An introduction to Handelman in the 1970s led him to help the commercial
diver raise funds to expand his business in the booming offshore oil
industry. The success of that deal drew him to Houston to set up shop
with his brother, L.E. Simmons.
When the energy business in the U.S. collapsed with oil prices in the
1980s, Simmons didn't diversify but stuck with the industry.
"He was entrepreneurial enough to see he could work with clients in bad
times too, helping them restructure their debt and find transactions
where they could do mergers that would allow the businesses to survive,"
said Howard Wolf, an Austin attorney who started representing Simmons &
Co. in 1976 and still sits on the board.
Founded institute
In 2007 Simmons founded the Ocean Energy Research Institute, a
combination think-tank and venture capital fund aimed at developing
ocean energy systems, from power generation projects to storage and
transmission.
Dan Pickering, a former Simmons employee who is now principal with
investment bank Tudor Pickering & Holt, said Simmons cared deeply about
getting energy companies to look beyond short-term issues.
"Matt started his energy career as an investment banker, but for this
past decade he has been an energy thinker," Pickering said. "His
transaction focus at the inception moved to more conceptual ideas. You
could see that with the ocean energy institute, which was not about the
energy of today but the energy of the future."
Simmons was small in stature but seemed to vibrate with enthusiasm and
energy, his friends said. "He looked like a little red nosed cherub with
a twinkle in his eye, but he didn't like that comparison," Handelman
said. "His absolute joy and enthusiasm for whatever it was he was doing
was contagious."
He was a voracious reader and researcher, which in part explains his
ability to take on the task of analyzing reams of oil field data for
Twilight in the Desert.
The book challenged conventional thinking in the industry, but it was
typical of Simmons, said Bill White, the former energy executive and
Houston mayor now running for Texas governor.
"He was an original and he enjoyed playing that role," White said. "But
at the same time he could explain the oil and gas industry to people
better than almost anyone else at a time when the industry needed more
friends."
Simmons is survived by his wife, Ellen, and their five daughters.
Details of the services are pending. In lieu of flowers, the family asks
that donations be made to the Ocean Energy Research Institute.
DEBATE OVER PEAK OIL FAR FROM OVER
Matt Simmons was known for his research in support of peak oil, a theory
of waning world oil supply that dates back decades.
The term was coined in the 1950s by M. King Hubbert, a Shell oil
geophysicist who predicted U.S. oil production would peak in 1970 and
decline at the same rate it rose. He was right about the peak date for
U.S. supply. The oil embargoes of the early 1970s helped put an
exclamation point on his prediction as Americans sat in long lines
waiting for gasoline.
But Hubbert's prediction about the rate of decline was off, and his
prediction that global oil production would peak around 2000 proved wrong.
The counterargument to imminent peak oil - supported by organizations
including IHS-Cambridge Energy Research Associates - is that improving
technologies will make it possible for companies to find more oil and
get more out of existing fields.
The global recession has dampened energy demand, but the debate is far
from over. Peak oil theorists note that oil prices still are elevated
and that much of the data on global reserves is in the hands of national
oil companies or governments that benefit from higher numbers.
TOM FOWLER