Worst threat to oil supplies? Rust, warns Simmons

Peak oil guru Matthew Simmons — featured in a fascinating recent Forbes piece titled, “Crude Cassandra” — isn’t changing his tune in the face of collapsing oil prices. In fact, he warns that today’s low price per barrel creates two serious financial challenges for the oil industry: underwriting ongoing exploration and combating the continuous threat of rust to its infrastructure.

As aging oil platforms, drilling rigs and pipelines keep rusting, Simmons says, they’ll need to be replaced if the crude is to keep flowing. How many new ones are needed? $100 trillion (US) worth, he says.

That, Forbes notes, is equal to the oil industry’s total revenues over the past seven decades.

Have a nice day.