With oil back in the news, many analysts consider high prices to be the result of a temporary loss of global excess capacity, a problem that will be relieved as new oil production comes on line. The U.S. Department of Energy sees global demand for oil growing more than 50 percent over the next two decades but also assumes that enough new production will come on line to solve this problem, mainly in the Persian Gulf. Simmons, an investment banker specializing in energy, takes a starkly contrary view. He focuses on Saudi Arabia, where the largest proven reserves and the greatest prospect for increasing production are thought to be. Basing his analysis in part on hundreds of specialized papers by petroleum engineers, Simmons conjectures that the largest and most productive fields are at or close to their peak production -- indeed, that current high production is shortening the productive lives of these fields. He also argues that new fields will not replace them, since extensive exploration on the Arabian Peninsula during the past two decades has produced disappointingly little. Thus, it is highly improbable that Saudi production can rise to the 15-20 million barrels a day expected of it. Oil will not run out, in Simmons' view; it will simply become much more expensive.
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