Look to the oceans for peak oil solution, Simmons tells OTC

Houston (Platts)--30Apr2007

World crude production possibly peaked in May 2005 and ocean energy is
the most feasible solution to a supply shortfall problem that will surpass the
issue of global warming for the public in a relatively short period of time,
Matthew Simmons said Monday.

Simmons, easily the best-known advocate of the peak oil theory first
espoused by M. King Hubbert of Hubbert's Peak fame, addressed a lunch meeting
here at the Offshore Technology Conference. His praise of ocean energy did not
refer to further exploration and production of hydrocarbons from the ocean;
rather, he grouped several of its facets together: "waves, currents, tides,
ocean geothermal."

The amount of oil the ocean floors seep into the waters every day is
"unbelievable," Simmons said, "but we know more about the surface of Jupiter
than we do our own oceans. It's the last low-hanging energy fruit."

Simmons said he has only been studying the energy potential of the ocean
for the last year and a half. Oceans could prove to be rich sources of
ammonia, according to Simmons, which he believes can be made into a viable
transportation fuel. Rather than growing algae in ponds to serve as a source
of biofuel, Simmons said proper development could allow ocean-grown algae to
be used instead. Finally, 60% of the world's population lives within a
reasonable distance from an ocean, so transportation of energy captured from
their waters would not be an insurmountable problem.

The optimistic views on the ocean's potential aired by Simmons, the
chairman of Simmons & Co. International, were one of the only optimistic views
he expressed in his speech. Simmons said a "possible" peak world crude
production had been reached in May 2005, and that all growth in total liquids
production since then has come from LPG and condensates. The "wedge" between
global crude production and combined LPG/condensate output historically had
been 2%; now, according to Simmons, it's closer to 12%.

--John Kingston, john_kingston@platts.com