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| Asia Times: The Saudi oil bombshell By Michael T Klare |
| 2005-08-08 |
"com" you had some comments about this awhile ago. What's your current view? But now, from an unexpected source, comes a devastating challenge to this powerful dogma: in a newly released book, investment banker Matthew R Simmons convincingly demonstrates that, far from being capable of increasing its output, Saudi Arabia is about to face the exhaustion of its giant fields and, in the relatively near future, will probably experience a sharp decline in output. "There is only a small probability that Saudi Arabia will ever deliver the quantities of petroleum that are assigned to it in all the major forecasts of world oil production and consumption," Simmons writes in Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy. "Saudi Arabian production," he adds, italicizing his claims to drive home his point, "is at or very near its peak sustainable volume ... and it is likely to go into decline in the very foreseeable future." ... |
| Posted by:3dc |
| #10 University prof friends of mine are arguing its more like 100-120 years more before the Saudi fields head downward - 40 or 120, its a'close enuff fer a'Govmint work, as we or most of us will be dead by then to care. |
| Posted by: JosephMendiola 2005-08-08 23:33 |
| #9 Personally I think the price spike isn't necessarily a bad thing. It's going to move some serious money and serious technical talent into alternative energy, a field absolutely overrun with moonbats. Not only alternative energy, but in proofing new fields and improving extraction technologies. The third world's biggest benefit over the US is its lack of laws -- no environmental or safety laws, so compliance costs are a lot lower. Higher costs from the third world make US fields and sources more attractive. |
| Posted by: Robert Crawford 2005-08-08 19:51 |
| #8 The only government intervention that's necessary is abolishing federal excise taxes on energy and clearly the regulatory underbrush that's been preventing new development. |
| Posted by: AzCat 2005-08-08 19:43 |
| #7 The price increase is not bad, but government intervention is. The government doesn't know what it is doing any more than any of the other players. But it takes it a lot longer to stop doing stupid things because it can take money from the taxpayers at gunpoint to continue to finance stupidity long after it is apparent to everyone else. |
| Posted by: Kofi Annan 2005-08-08 18:57 |
| #6 This spike is a bit different than in the past as long-term (viz., for delivery in 2011) futures have followed the spike and are trading over $60/bbl. In the past the longest-term contracts had typically hovered around pre-spike prices or shown only modest increases. Thus, for risk averse holders of secondary sources like the Alberta tar sands, there presently exists a way to stabilize prices and guarantee profitability for a number of years should they so choose. Personally I think the price spike isn't necessarily a bad thing. It's going to move some serious money and serious technical talent into alternative energy, a field absolutely overrun with moonbats. If it becomes painful enough it could engender some federal regulatory reforms which would almost certainly spread beyond the oilfield. Both of those would clearly be positive outcomes. |
| Posted by: AzCat 2005-08-08 18:46 |
| #5 "Doing nothing is stupid and expensive and against our national interest. We could start by building a few more refineries to handle heavy sour which we here in the US have quite a bit of. " Canada has a larger reserve than Saudi Arabia, but it requires different technology to extract it. I think it is processed through heated water or steam, but that is an avenue Americans should put on the fast-track. We could use the added jobs that would include adding a distribution system. The ME supply is too easily disrupted. |
| Posted by: Danielle 2005-08-08 16:40 |
| #4 At $60 per barrel tar sands are quite profitable (Canada, Venezuela for instance have LOTS). Oil shale is probably profitable, if you are willing to absorb the environmental problems (US has lots.) Various secondary and tertiary production enhancement processes are profitable. SOME of these things are happening, but I suspect a lot are not. Why not? Because they involve a lot of cash up front, and take a long time to pay out, and investors are not convinced the elevated prices are 'for real'. Contractions in economies (e.g. China) and even oil conservation efforts act a lot faster and can destroy the economics of high cost megaprojects. Increasing (or long-term maintainance) of Saudi production would probably be one of these expensive projects. With the additional complication of religious politics. New fields are actually cheaper and simpler, as long as you have new places to look. |
| Posted by: Glenmore 2005-08-08 16:34 |
| #3 These folks crack me up. They either have a professional interests in selling "we are running out of oil" or a TYRANZI political one. WTF does a rich banker know about oil? Not a damn thing, he spouts the crap "analysts" feed him, another bunch that knows very little about petroleum production and recovery. They know even less about the oil fields in Saudi Arabia. Yes some day we will run out of easily recoverable oil but that day is sometime in the unknown but not near future. The cost of oil will rise. The cost of everything rises I submit that oil has been artificially low for years. There are loads of stuff that we could do to reduce demand. Many are simple. But most we as a nation will not do out of apperent laziness or lack of understanding. We can deal with the issue like adults or run around in circles screaming and shouting and do nothing. Doing nothing is stupid and expensive and against our national interest. We could start by building a few more refineries to handle heavy sour which we here in the US have quite a bit of. We could smack down the TRANZI enviros with facts and get them out of the way of securing energy security. Talk is cheap. Lets do something. |
| Posted by: Sock Puppet 0’ Doom 2005-08-08 13:17 |
| #2 $60 per barrel isn't a bad incentive, either. |
| Posted by: Mrs. Davis 2005-08-08 12:58 |
| #1 Well, the last time this came up I emailed some Aramco engineers. They all said that production costs will rise, because, yes, injection rates are up and the newer, more effective, recovery tech costs more -- but there is still lots of oil there. Two suggested that those who keep harping on the Saudi oil bust, which has been predicted for the last 40 yrs, BTW, are actually in the business of selling books and giving economic seminars - not Saudi oil production. Who do I believe? Ooooh, toughie. Between no-shit engineers working on the production facilities in Saudi -- or somebody else. Anybody else. I'll go with the Engineers, Alex. The oil prod rate upticks take time, the major fields have been producing for quite awhile and ambient pressures have dropped, but they can do it. One Engr even tossed a prediction out there - 50 more yrs at current levels. So I'd wager 20-25 is safe, given sizable increases in prod rates coming online in about ~3 yrs, per Bush's request of CP Abdullah. |
| Posted by: .com 2005-08-08 12:13 |