Matthew R. Simmons watched on television in April as the Deepwater Horizon rig blew sky high, and he knew he was seeing the end of the energy business as he had known it.

“I thought, Jesus Christ, this is unbelievable,” said Simmons, the Houston investment banker who represented Transocean—the company that owned the doomed oil rig and leased it to British oil giant BP—in two mergers and the sale of two rigs. “This must be the biggest blowout we’ve ever had.”

More than a month after the April 20 explosion that mortally crippled the rig, Simmons told Portfolio.com in an interview that the disaster could leave the centuries-old Louisiana fishing industry in tatters and the tourism industry along the entire Gulf Coast soiled by crude.

“It’s going to profoundly change everything we know about the energy game,” said Simmons, founder of the energy-devoted investment bank Simmons & Company.

Oil slicks have been spotted 55 miles off the white sands of Pensacola, Florida, and some observers have seen a sheen as close as eight miles from shore. It’s an area that has already been economically hammered as tourists have canceled plans to spend their vacations on the Florida Panhandle. Now, the National Oceanic and Atmospheric Administration expects oil to hit the Florida shore by the end of the week.

To really tackle the problem, Simmons said the federal government should shove BP out of the way and work directly with the oil-service companies to do whatever is necessary to close the flow of oil. “BP is in total denial of what is happening,” Simmons said. “I think it’s just too awful for people to comprehend.”

One of the options Simmons says officials may need to consider—using a small nuclear bomb to blow the pipeline shut, as the Soviet Union did five times with out-of-control wells four decades ago. After all, he argues, the well is deeper than the test sites in Nevada where the United States used to test its nuclear warheads.

U.S. officials have emphatically rejected the idea of a nuclear option. "It's crazy," one official told the New York Times.

With or without a cease to the oil flow, pray for good weather, Simmons said—after a few years of relatively tame summer storms, forecasters predict an aggressive hurricane season similar to 2005 when Katrina battered the Gulf Coast in Louisiana and Mississippi and 14 other hurricanes formed in the Atlantic.

“It’ll paint the Gulf Coast black and shut down our refineries,” Simmons said of a hurricane in the Gulf. As for the $2 billion Louisiana fishery, the second largest in the U.S., “sadly, I think that’s probably history. God, I hope not. If we’re lucky enough not to have a hurricane this summer we might be able to spare the Gulf.”

The massive spill could forever change the energy equation for the United States and maybe the world, Simmons said. The illusion of easy oil exploded with the Deepwater Horizon 40 miles south of Venice, Louisiana, meaning the United States and other nations will finally have to get serious about replacing the fluid that has run the U.S. economy for 100 years.

Simmons said the public and politicians had been gulled into thinking oil companies would be able to get at the crude by a petrochemical industry that touted technology that allowed it to drill deeper and deeper for more oil. In reality, Simmons said, the era of easy oil has been over for years, and the world has already passed its peak of oil production. Others argue the peak won't come for 30 years. But Simmons calls that kind of thinking flawed, and says the Deepwater Horizon disaster is a good sign of how flawed it is.

The very depth of the well is one reason this spill has been so bad—5,000 feet under water and another 18,000 feet in the Earth to tap into oil. The deeper you go, the more pressure there is, and it’s that pressure that blew through protective measures that proved too flimsy, destroying a vessel twice the size of an aircraft carrier in a plume of black smoke and flame. On Wednesday, the latest attempt froze as a saw blade being used to cut through a pipe to allow for a new containment dome got stuck.

Simmons said the BP Deepwater Horizon spill may just be the event that spurs a reaction that shortens the time horizon for the switch from oil. His favored approach is the development of offshore wind turbines, but other ideas include the use of algae as a substitute for oil.

“I think it could happen within five years if we tackle this with the intensity that we reacted after Pearl Harbor,” he said. “We have to use that intensity now, and that’s the only good thing about the tragedy—it’s going to focus people on the problem.”