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 Michael Rupert interviews Matthew Simmons: What's the most important thing you want the American people to know about Black Thursday? This blackout ought to be an incredible jolt telling us about a host of energy problems that are ultimately going to prevent any future economic growth. It's like people have been ignoring annoying phone calls and living in denial about a problem that won't go away. It's like the ghost of Enron calling. The event itself was astonishing. Senior people like Governor Pataki or the head of NERC [North American Electric Reliability Council] were asking how this could happen. But the problem was inevitable. The only thing we didn't know was when it would happen. On a large scale what happened was deregulation. Deregulation destroyed excess capacity. Under deregulation, excess capacity was labeled as "massive glut" and removed from the system to cut costs and increase profits. Experience has taught us that weather is the chief culprit in events like this. The system needs to be designed for a 100-year cyclical event of peak demand. If you don't prepare for this, you are asking for a massive blackout. ... Currently, oil supply issues are as serious as the electrical grid. Last month the IEA(International Energy Agency) updated their database. They had for years been talking about a coming huge surge in non-OPEC supply, excluding the FSU (Former Soviet Union). It hasn't happened. We have the highest oil prices in 20 years and even great technological advances have not had a measurable impact on discovery or production. What is the solution? I don't think there is one. … The solution is to pray. Pray for mild weather and a mild winter. Pray for no hurricanes and to stop the erosion of natural gas supplies. Under the best of circumstances, if all prayers are answered there will be no crisis for maybe two years. After that it's a certainty. (08/23/03)
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