Editor’s Note: Meeting the Challenge is an open-ended series from EnergytechStocks.com intended to build a blueprint for how the world can meet the incredible increase in all forms of energy that will be needed by 2030 without endangering the environment or nations’ security. In the coming weeks and months, recognized experts will share their ideas, and important new investment themes (including some that could turn out to be worth many billions of dollars) should emerge.

Posted: September 4, 2007

There’s been a lot of talk recently about whether the slowing U.S. economy will have a hard or soft landing. Matthew Simmons, the noted investment banker who has gained a global reputation on the basis of his clarion call that global oil production is showing signs that a steep decline is just around the corner, doesn’t think a soft energy landing is possible.

But he does hold out hope for a bumpy landing.

To meet the challenge of future energy requirements, Simmons told EnergyTechStocks.com that one of the first things that must be done is to institute a policy of “conservation production.” He believes that such a policy, while it would produce potentially serious near-term economic dislocation, would enable the world to avoid the production collapse he fears.

Conservation production essentially is the recognition that oil production can not be maintained at its present rate and must be scaled back in order to stretch out remaining supply for as long as possible, thereby buying more time to find alternatives.

“We must start discussing the concept,” he said.

Simmons named several oil producing countries that already appear to be practicing conservation production without publicly admitting that they are doing so: Mexico, Venezuela, Kuwait, Iran, Russia and Indonesia.

Simmons said that in addition to rising demand caused by the expanding global population, the world is in this fix because, when oil prices dropped in the 1980s, producers felt it necessary to produce the maximum amount possible in order to limit their financial losses. Based on his personal contacts, Simmons said the producing countries’ technicians tried to warn their rulers that such production flows weren’t sustainable, but were dismissed as being “Chicken Littles.”

Simmons Series Continues on Thursday, Sept. 6