If you are an investment manager with a position, long or short, in British Petroleum, you owe it to yourself to listen to this King World News interview with Matthew Simmons. In it, Simmons says BP is lying when it claims the cap on the oil well riser has stopped the flow of oil into the Gulf of Mexico. That’s because Simmons believes, based on his 40 years as an investment banker to the oil industry and information he’s receiving from various sources, that the real oil gusher is not the damaged riser, but a hole in the ocean floor nearby that is spewing crude oil and methane gas. This oil and gas is suspended in a giant lake-blob 4,500 to 5,000 feet below the surface in the cooler water there. His main concern with this is that if a tropical storm or hurricane stirs the Gulf waters and brings that cool water layer, with the oil and gas, to the surface, the methane will blow inland on the wind and sicken or kill many living along the Gulf.
“Peak Oil” theorists love Simmons because he has been saying for years that the Saudi oil fields are in decline and that we need to face up to a future with less oil. Because of his views on Peak Oil, and other stances he has taken, he is also dismissed by some in the oil and financial industries as some sort of crackpot.
BP’s stock price was down was down about 4.5% this afternoon to $35.40 per share. If Simmons is right, BP should be worth $0 and its executives should be headed to jail. Listen to King’s interview with Simmons, and decide for yourself.