Simmons, who's written Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy, operates from Simmons & Co., a Houston-based energy investment banking firm. On Tuesday, he was a guest on CNBC, discussing "peak oil": the notion that global oil demand will soon eclipse supply, if it hasn't already. John Hofmeister, the president of Royal Dutch Shell's U.S. operations, had already discussed the issue on CNBC last week.


Unlike Hofmeister, Simmons is convinced that overall declining production is essentially liquidating the big oil companies. One quarter doesn't make a trend, but the three largest U.S.-based oil and gas companies -- ExxonMobil, Chevron, and ConocoPhillips -- all saw their December-ended quarter production slide from the year-earlier level, despite record high prices during the period.

Simmons calls oil produced from Canada's ballyhooed tar sands "turning gold into lead," pointing out that Shell has spent $14 billion in exchange for production of about 100,000 barrels a day -- in line with the output of a single good-sized well in Saudi Arabia. He's also reportedly placed bets that the price of crude will reach $200 a barrel by 2010.