Matt Simmons: “John McCain is energy illiterate. He’s just witless about this stuff.”

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"Matt Simmons: “John McCain is energy illiterate. He’s just witless about this stuff.”"

If you follow peak oil — and if you don’t, you will be bitchslapped by reality — then you know of Matt Simmons. I was introduced to him several years ago by my former boss at the Energy Department. Back then Simmons was merely one of the savviest financier in the oil services business, who was presciently warning all who would listen that natural gas supplies in this country would not respond quickly to increased prices and thus we should expect some serious price spikes.

Today he is “The prophet of $500 oil” as Fortune described him Monday. Yet, long before he published his 2005 book, Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy, he was a “lifelong Republican” who “helped edit the Bush campaign’s comprehensive energy plan in the 2000 election.” The word “comprehensive” of course is a laughable term that I’m sure even Simmons would mock today for a plan that focused almost exclusively on supply.

Still, Simmons remains well connected to Republicans: “Maine’s Senator Susan Collins, a Republican who recently began consulting with Simmons on energy issues, says, “I think he’s issuing a clarion call that policymakers need to listen to.”

Simmons was right about natural gas, and he appears to be (mostly) right about peak oil (see below), so the nation should listen closely when he speaks truth to power about his party’s own nominee:

“John McCain is energy illiterate,” Simmons is saying. “He’s just witless about this stuff. As a lifelong Republican, I’m supporting Obama.” A dozen oil and gas men sitting around a conference table in Lafayette, La., chuckle nervously as he continues. “McCain says, ‘Oh, we’re going to wean ourselves off foreign oil in four years and build 45 nuclear plants by 2030.’ He doesn’t have a clue.”

… McCain’s midsummer move to begin campaigning on a platform of more offshore drilling has only hardened Simmons’s position. “What a hypocrite… Here’s a man who for at least the past 15 years has strenuously, I mean strenuously, opposed offshore drilling. And now it’s ‘drill, drill, drill.’ And he doesn’t have any idea that we don’t have any drilling rigs. Or that we don’t have any idea of exactly where to drill.” (As for McCain’s running mate, Sarah Palin, Simmons says: “She’s a very colorful person, but I don’t think there’s a scrap of evidence that she knows anything about energy.”)

Okay, Matt, but what do you really think about the GOP ticket?

I doubt we are going to see $500 oil for a long, long time, as I’ve told Matt. Every dollar a barrel increase translates roughly to 2.4 cents in the price of gasoline. So that would be $13 gas! The global economy will implode long before then. Even T. Boone Pickens suggested in his interview with me that the $300 a barrel he foresees by 2020 if we don’t adopt his plan would take a wrecking ball to the economy.

Frankly, $200 to $300 oil would be so shocking to the national and global economy, I don’t see much point in worrying about whether or not we could ever get to $500. I’ll look at the implications of even the “lower” prices in a later post.

Kudos to Simmons for calling McCain out (and a shout out to A. Siegel).

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11 Responses to Matt Simmons: “John McCain is energy illiterate. He’s just witless about this stuff.”

  1. Hank R. says:

    Joe,

    In such a partisan world, things seems to often be either good or bad regarding geeting the power we need while addressing global warming. What is the value that can accrue when this kind of approach is suggested ? Is there any way that this kind of thinking can help mitigate an increasingly “all or nothing” dialogue ?

    Co-Generation or Synthetic Fuel Production from Small Reactor Power Plant Residual Heat

    Since nuclear and hydro are the only two power production methods that are both dependable and non-green house gas producing, nuclear power production enjoys a specific advantage in producing large volumes of heat that are readily usable in related energy producing processes. Although the initial design of the SSPP planned to vent the excess heat directly to the atmosphere, a much more effective approach would be to install a secondary process to utilize that heat. A preliminary look at the Coal Gasification process indicates that a small “package” coal gasification plant sized to match the output of the SSPP would increase the economic viability of the total project.

    For Coal Gasification the initial concept would be to install a 30 MWe (100 MWt) reactor power plant that will use 15 MWe to back feed the base electrical power grid and use 15 MWe to run the Coal Gasification process. Using systems typically employed by large refineries and assuming the same efficiencies, a small package coal gasification plant would use approximately 15 MWe from the power plant to separate hydrogen and oxygen from water and power the process, plus the heat from the reactor plant. With approximately 300 tons of low sulfur coal, using the Fischer-Troupe process, the Coal Gasification plant would produce approximately 1000 barrels of Diesel fuel (42,000 gal) and 666 barrels of Naphtha (28,000 gal) every 24 hrs of operation. For this application, the Air Force base could use the Diesel and sell the excess and sell the Naphtha to the plastics industry or to refineries producing gasoline.

    Other co-generation opportunities could include: other SynFuels, Ethanol production, Bio-Mass, Sea Water Desalinization and Hydrogen production. None of this available energy should be wasted or simply vented; it should be put to work.

    *This information is extracted from a white-paper written for another federal agency.

  2. Joe says:

    Hank — I confess that I don’t really understand your point. all forms of zero carbon power are worth pursuing, as I have blogged repeatedly.

    That said, I simply believe this is a factually wrong statement — “Since nuclear and hydro are the only two power production methods that are both dependable and non-green house gas producing.”

    The rest of your post is too opaque to comment on. To the extent that I follow it, I’m just not sure who if anyone is building small reactors of the kind you are describing.

  3. Earl Killian says:

    I am curious just what, if anything, McCain could be considered literate in? Doesn’t he admit he knows nothing about economics?

    Of course, what is really important is the team the candidate selects, and the problem is that that team is inevitably drawn 99% from the President’s own party.

    I believe that Americans, unlike Europeans, are not realizing that in voting for a President, they are not really voting for an individual, but they are actually voting for a Party. The President is just a small part of what they are getting, because with the President comes a whole set of members of the same party who then occupy the appointed positions in government. Thus with Bush2 you got the junior folks of the Ford/Bush1 administrations taking over. During Bush2 these people were even more of a problem than Bush2 himself (e.g. Cheney, Rumsfeld, Wolfowitz, Feith, Rove, Ashcroft, Yoo, Gonzalez, Cox, and so on). McCain himself may not be so bad (though I would say he is seriously confused), but his administration will necessarily call upon the Republican party bench to fill the appointed positions of government, and those people are largely anti-science, deniers, ideological, militaristic, and dangerous. This “bench” is exactly the sort of people who are hostile to the very functions of government that they would be called upon to oversee, just as Christopher Cox has done nothing at the SEC to avert or mitigate the subprime crisis, because he is ideologically incapable of of believing the markets are not best left alone. This is the sort of person that McCain would have available to fill appointments. Scary.

  4. Bob Wallace says:

    300 tons of coal -> 1,000 barrels of diesel and 666 barrels of Naphtha.

    And where does the carbon that was pulled out of sequestered storage end up?

    (Love that Naphtha projection. Seems to fit this overall idea.)

  5. Rick C says:

    Joe,

    Is this right? Matt Simmons called John McCain illiterate? I’m not surprised that he IS illiterate on energy just that Matt Simmons called him on that in public. I mean April 1st was over 5 months ago.

  6. paulm says:

    Why was McCain elected to the senate?

    (I wonder if he can remember why)

  7. Bob Wallace says:

    Why?

    Because some serious money wanted a candidate and John was out of a job and just kicking around.

    Read up on Cindy’s father his friends.

  8. John Mashey says:

    peak Oil & Matt Simmons:
    I’ve read Matt Simmons’ book (very thorough), and just got back from Sacramento ASPO-USA meeting that included a (good) talk by him (and many other good speakers).

    if you’re interested, keep an eye on the web-site – they hope to have the presentations up there fairly soon.

  9. gaiasdaughter says:

    Joe, you missed the last few paragraphs of the article; the scariest part if you ask me:

    The day after the CNBC interview, Simmons and Hart drove up to the University of Maine to visit the Advanced Engineered Wood Composites Center (AEWC), a 60,000-square-foot structural testing facility. The lab’s director, Habib Dagher, is one of the world’s leading experts in composite materials. He’s working with Simmons and Hart to develop new windmill-blade technology.

    The AEWC guys gave a presentation showing how the project could be ready by 2020. Simmons then donned a hardhat and safety glasses and got a tour of the testing floor. As it happens, the lab had already been hired by a large wind-power company to fatigue-test a prototype for a 55-meter turbine blade. A ten-meter segment of the blade was locked in a device called a hydraulic actuator – what looked like two massive steel vise grips – receiving 38,000 pounds of pressure up and down every second. “This is really incredible,” Simmons announced. “I’m going to come back up here with two or three investor types I know.”

    On the way out, I asked Simmons if seeing the lab made his virtual institute feel more real. “Oh, yeah, very impressive,” he said. “But we need to compress the time frame – 2020 is way too far out. That plan is fine assuming that we go along like we are now, and everything is okay in the world. But it’s not going to be okay. We’re going to need this stuff much sooner.”

    Between this post and the one on methane leaks, how much bad news do you think we can absorb at one time??

  10. Bob Wallace says:

    I don’t see this post as “bad news”.

    I read it as people with influence speaking out so that we are less likely to get another incompetent president in office.

    And we see a major oil guy saying that it’s time to go all out with renewables.

    It’s getting pretty obvious that the Earth is going to get slammed by global warming. But it’s not bad news to hear that big time players are starting to get their game on.

    It’s telling us that we’ve gone past the denial tipping point.

  11. shop says:

    Simmons was right about natural gas, and he appears to be (mostly) right about peak oil (see below), so the nation should listen closely when he speaks truth to power about his party’s own nominee: