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SG-W:/ Fw: [energyresources] Matthew Simmons v Richard Duncan



       This is the most recent and most pessimistic forecast of natural gas that I have seen. The first thing we need to do is to lynch the USGS and EIA. We must stop building houses, build a lot of Ecomindiums, and plant many trees.I have always said that we are destroying any possibility of a decent life for the children. These problems may come soon enough to endanger this generation. 
 
                                                Kermit Schlansker
-----Original Message-----
From: Karl Davies <kdavies@igc.org>
To: ER <energyresources@yahoogroups.com>; ROE <RunningOnEmpty@yahoogroups.com>
Cc: Canada Energy <CanadaEnergy@yahoogroups.com>
Date: Friday, March 23, 2001 7:19 PM
Subject: [energyresources] Matthew Simmons v Richard Duncan

Now it appears that Richard Duncan has even more competition in the energy resources "pessimist" department.  In addition to the Canadian Gas Potential Committee (http://groups.yahoo.com/group/RunningOnEmpty/message/7237), Duncan has competition from Matthew Simmons of Simmons & Company International.

Just last week Simmons sounded the alarm in a speech to the Subcommittee on Energy & Mineral Resources of the Committee on Resources of The House of Representatives.  The speech was entitled "US Domestic Natural Gas Supply & Demand: The Contribution of  Public Lands & The OCS" and is online at: http://www.simmonsco-intl.com/research/default.asp?viewnews=true&newstype=1&viewdoc=true&doc=138

In this speech, Simmons said "The natural gas supply is particularly threatened by increasing evidence that the current supply base is now declining at a rate where half of the current supply will be consumed by 2005.  This means that 50%, or 25 Bcf per day of new gas production needs to be added merely to keep the current base flat." (page 5 at the above URL)

If half the gas supply is going to disappear in four years, that will mean a rate of decline of 18% per year.  Assuming that this rate applies only to the US, it is considerably greater than Richard Duncan's estimated rate of .5% until 2007 and 1.5% until 2040 for the US (http://groups.yahoo.com/group/dieoff/message/10).

The Canadian Gas Potential Committee's Figure 5 at  http://www.geo.ucalgary.ca/NatGasCan/ceripaper.pdf shows supplies going from 5 Tcf to .5 Tcf per year in 25 years.  This would indicate an average rate of decline of approximately 10% per year, but the steep part of the decline wouldn't begin for a few years.

If Canadian gas continues to provide 15% of the US supply, and the average rates of decline stay the same for the two countries, the combined rate of decline for US supply should be something like 17% per year.  At that rate, US supply would be effectively gone in what, 10 years?  It looks like Olduvai Cliff could be much sooner and much steeper than previously assumed.

Karl Davies
Northampton, MA
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