Matthew Simmons, chairman of Simmons & Co. International in Houston, talked yesterday with Bloomberg's Rhonda Schaffler about the need to address energy use, his view that global supply has peaked and the likelihood oil prices could reach as much as $300 a barrel. (Source: Bloomberg)

[Transcription of the first few minutes of the interview]

Q: Tell me how you draw your conclusion that at this point we've hit Peak Oil.

A: If you look at the numbers and you follow what's going on starting with Mexico's giant Cantarell field which is now in a very serious state of decline and then you look at the North Sea and you see just the UK and Norway, it's pretty obvious to me that those three areas alone could actually decline by between 800,000 and 1 million barrels a day in 2007.

That pretty well wipes out almost all the production gains coming onstream and in implicit in that it assumes that everyone else is flat.

So I think basically too many of our oil fields are too old. Too many now are in decline. The Middle East is basically out of capacity. they're some projects that are being worked upon, but most don't hit the market until 2008, 2009 and we're running out of time.

... I am firmly of the belief that over the course of the next year or two, this issue of peak oil will replace global warming as an issue that we're all worrying, debating and talking about.