Marshall Plan for 'rusty' infrastructure required within a year: Simmons
  from: Offshore Engineer
  Tuesday, May 06, 2008

Some $50-100 trillion will be needed over the next seven years to rebuild the world energy industry’s aging and rusting infrastructure, Matt Simmons, chairman of investment bankers Simmons & Company International, has warned.

Simmons called for the establishment of an energy czar within the next year to kick start the rebuilding process.

He told delegates at OTC: ‘In human life and industrial life, there is no eternal youth. Bodies and assets age. Preventative maintenance only temporarily masks the aging process.’ He cautioned that ‘rust never sleeps’ and that the energy infrastructure is made up of a vast spider’s web of rusting steel. There are more than 335,000 miles of oil pipeline in the US alone.

‘Had the world appointed an energy czar, he would have ordered a global census on the age of the rusting oil infrastructure. A mandate would have forced abandonment when leaks became too toxic,’ Simmons said.

Simmons believes that now is the time to start rebuilding the energy infrastructure while oil prices are soaring.

‘Current prices are high enough to start priming the pump,’ he stated. ‘As prices keep surging ahead, the wellhead windfall revenue can pay the piper who rebuilds the steel infrastructure. But there is no blueprint or master plan in place.’

According to Simmons, just a tiny portion of the infrastructure is now being rebuilt, with $1.5 trillion of energy projects in the Middle East and Shell’s massive Pearl GTL project set to consume vast quantities of steel.

He warned that a lack of raw materials and rising prices could hamper the reconstruction effort. But he said: ‘It is time to stop scrambling and start organizing the world’s most serious redevelopment construction project. Triage management needs to prioritize which links in our chain are the weakest. A Marshall Plan needs to be created by OTC 2009 at the latest.’

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