Expert Says Saudi Oil May Have Peaked

[chlamor]

Expert says Saudi oil may have peaked


By Adam Porter

Sunday 20 February 2005, 10:58 Makka Time, 7:58 GMT

As oil stubbornly refuses to fall below $45 a barrel, a major market mover has cast a worrying future prediction.

Energy investment banker Matthew Simmons, of Simmons & Co International, has been outspoken in his warnings about peak oil before. His new statement is his strongest yet, "we may have already passed peak oil".
<snip>
If Saudi Arabia have damaged their fields, accidentally or not, by overproducing them, then we may have already passed peak oil. Iran has certainly peaked, there is no way on Earth they can ever get back to their production of six million barrels per day (mbpd)."
<snip>
The technical term for damaging an oilfield by overproduction is rate sensitivity. In other words, if the oil is pulled out of the ground too fast, it damages the fragile geological structure of the field. This can make as much as 80% of the oil within the field unextractable. Of course, at the moment, virtually every producer is at full tilt. The most important among them is Saudi Arabia; their Gharwar field is the world's biggest.
<snip>
One of the first hints that Simmons got over possible Saudi Arabian overproduction was from researching an obscure US Senate committee meeting in 1974.

To read entire story click English version of al-jazeera and look to the features section.
www.aljazeera.net

[Elidor]

1. I can't FIND the english section

It's all greek to me.

[chlamor]

2. Upper left hand corner

You will see the word 'English'. Click there.

[Elidor]

5. 'Fraid not

Their site does not display correctly in my browser-the tables are all messed up. I searched the entire page and found not a trace of english.

[chlamor]

10. Just click the link

Look to the upper left inside the blue bar, it is the only english word on the screen. Another place to go to view the story is www.energybulletin.net and look at most recent article. There are several excellent articles posted about oil/gas at this website. Very reliable.

[No Exit]

4. LOL. That page DOES look formidable! Try this

http://english.aljazeera.net/NR/exeres/80C89E7E-1DE9-42BC-920B-91E5850FB067.htm

It's a good article.

[Elidor]

7. Thanks! That's much better.

The guy sounds pretty credible. Funny how this guy supposedly advised Bush & Snarling Dick on this stuff, but they sneer at the idea of conservation.

[No Exit]

11. UR welcome!

[lovuian]

3. I know something about the oil business and this could be true

in the past couple years Saudia Arabia has gotten contracts with companies that help get the sludge out of oil. This is very unusual for the Prime stuff of Saudia Arabia. These chemicals are being used on the tapped out North Sea oil riggs. When you see oil fields using these chemicals then yes I agree something is amiss...

[chlamor]

6. Been wondering

why it is that the oil companies have had to drill so deep nowadays and why there is so much more attention/investment going to the more energy intensive and costly tar sands operations. This can only mean that the low hanging fruit has been picked. Do you think this to be the case?

[lovuian]

8. Its the price of oil when its over 45 dollars a barrell its worth it

these prices haven't been seen since the big crunch in the 70's

it makes this sludgy oil worth getting!!!

hope that helps!!!

[chlamor]

17. Are we at peak?

I'm beginning to think we are at or past the peak, though we'll only know for sure in hindsight.I came across this article which indicates that there is possibly less oil out there than even some of the peak oil analysts are suggesting. I've also read that the process involved in getting to the oil in tar sands is an ecological nightmare. Any info about that

Shell, Exxon Tap Oil Sands, Gas as Reserves Dwindle (Update1)

Feb. 18 (Bloomberg) -- Shell Canada Ltd. Chief Executive Officer Clive Mather says oil from his Athabasca project, where tar sands are boiled to produce crude, can cost twice as much as drilling in the North Sea. And it's worth every cent, he says.

``If we had access to unlimited conventional oil, I guess the interest in Athabasca would diminish quite quickly, but that isn't the case,'' Mather said in a Feb. 3 interview in London. ``This is high-cost oil, there's no question about that. At current prices, it's still very good business.''

A 15-year decline in oil reserves is spurring companies such as Royal Dutch/Shell Group, Exxon Mobil Corp. and ChevronTexaco Corp. to spend $76 billion in the next decade to boost supplies of oil from tar sands and diesel fuel from Qatari natural gas. Oil executives say they have no choice but to try alternatives to drilling because there is not much more crude to be found in their current fields.

``We're damn close'' to the peak in conventional oil production, Boone Pickens, who oversees more than $1 billion in energy-related investments at his Dallas hedge fund firm, said in an interview in New York Feb. 16. ``I think we're there.'' Suncor Energy Inc., the world's second-biggest oil-sands miner, is his largest holding.
Sticky Mixture

Alberta's oil sands cover an area larger than the state of Florida, and about two tons have to be dug up, heated and processed to make a single 42-gallon barrel of oil. Suncor Energy spends C$12 ($9.62) to C$12.50 to mine and upgrade a barrel of oil. Saudi Arabia pumps a barrel of oil for about $2.

Devon Energy Corp. President John Richels, a Canadian and a lawyer by training, remembers the first time he held a handful of the oil-encrusted sand, in the early 1990s. He said he had a hard time believing the sticky mixture could be turned into smooth- flowing crude. Devon, based in Oklahoma City, is now investing C$527 million in the Jackfish oil sands project in Alberta.

Devon Energy Corp. President John Richels, a Canadian and a lawyer by training, remembers the first time he held a handful of the oil-encrusted sand, in the early 1990s. He said he had a hard time believing the sticky mixture could be turned into smooth- flowing crude. Devon, based in Oklahoma City, is now investing C$527 million in the Jackfish oil sands project in Alberta.

``They're not particularly high-return projects,'' he said in an interview. ``We see the same kinds of returns, though, in other parts of the world.'' And given the lack of exploration and political risk, the projects pay off, he said.

`Operating Risks'

Failures are costly. A blaze at Suncor Energy in Alberta slashed output by about half, and full production won't resume for months. The lost output is worth $4.4 million a day at $40 a barrel. The company expects insurance to cover most of its losses.
http://www.energybulletin.net/4385.html

[No Exit]

9. Okay, so the article asserts that by overproducing, they

are wasting the residual oil, which can't be got out if they take too much out too fast.

Okay, so we might all run out of oil. MAJOR world effect, yes.

But hasn't mankind survived for most of its existence without this type of oil?

In the distant past, humans lived a very different sort of life.

I know, for example, that we didn't have the medicines to fight infections--that certainly killed off a lot of people at what we would now call a young age.

BUT there might well have been some good aspects of our way of life, way back then. If we had to return to it, would that necessarily be all bad?

[lovuian]

12. Its saying Saudia Arabia in the future isn't the Biggest Oil field

that could go to Russia or Iran...thats why so much interest!!!

[NVMojo]

13. key word: Iran ....what was that Ritter said about invading Iran in June?

[No Exit]

16. Article says Iran has already peaked. Of course,

in the minds of the oil-greedy neocons, a country, while it may not produce as much oil as they like, might still be a strategic target b/c it is a good place for a pipeline. I guess that's part of what Iran means to the war-mongers.

We see a country with people in it; they see a pipeline.

[chlamor]

20. Natural gas in Iran

I think Iran is second or third in projected reserves of liquified natural gas. Seems to be a mad grab for oil/gas by the Cheney junta. Control all 'tyrannical' oil checkpoints.

[No Exit]

24. Thanks for the info. Oh, okay, back to Ritter's prediction that we

attack Iran in June. Sigh.

[VirginiaDem]

37. Second to Russia n/t

[hatrack]

31. Iranian conventional oil production peaked in 1973

As Chlamor notes, it's the potential for natural gas reserves that has Dick Cheney's heart thumping too fast for its own good.

You see, if we exercise direct military control over the world's biggest oil reserves, we'll then be able to safeguard our profligate waste of unbelievable amounts of oil, thus ensuring that the oil will continue to flow in limitless amounts for generations to come.

Makes perfect sense, don't you think?

[No Exit]

18. If only I could live to see the day when the saudis lost all their wealth!

Better yet, if only I could live to see the day when ALL oilmen's product became useless, or was used up!

[Solon]

14. Would you like a 60 percent reduction in world population to go with that?

Its going to get BAD, look up the Green Revolution and what fueled that, Petroleum derived pesticides, herbicides, and fertilizers. Combine that with the fact that most of the big food producing farms have not properly rotated crops in over 50 years. In other words, the ONLY single reason we are producing as much food as we are now is because of Oil. The Topsoil that these plants grow on has been tapped out as far as nutrients go, and REQUIRE artificial fertilizers to sustain them. Unfortunately, our artificial nitrates do not stay in the ground for long, and are practically used up every season. This means that once the fertilizers and other chemicals start getting more expensive, food will be too, plus we will have shortages. Are you going to be able to afford 10 dollars for a loaf of bread, within, lets say, 2-3 years?

[No Exit]

21. I know, I know! But on the one hand we constantly hear

that "humans are reproducing too fast! The world's population is skyrocketing! Mankind will breed itself out of existence!"

Where are the alternatives to oil? We had other means of survival before oil was ever used! Those who continue to rely solely on oil and its byproducts will find themselves without. Those who can somehow revive the old ways might survive.

I just don't think that having billions of people is the only reason the world exists! Shit happens. Some survive; some don't. That's the way things work. Everyone's got to die sometime!

[aneerkoinos]

25. Survival

Soft landing to sustainable level is still possible at least for some cultures. For US, because of that kind of general attitude or denial and most of all the individualistic cultural model instead of more communally oriented, hard crash is the most likely.

[No Exit]

27. Good point. If we take the trouble to learn a few things

about the old (pre-oil) ways, maybe we can revive that knowledge enough to use it!

[aneerkoinos]

38. Yes

Part old ways, part new ways. If you are serious search the net for Peak Oil + community solutions, or go to the DU PO discussion group.

[No Exit]

40. Thanks!

[Conservativesux]

26. Can you say " Soylent Green". We saw this coming years ago...

but we did nothing about the massive population growth that was only possible with energy derived from cheap oil and natural gas.

[chlamor]

30. "They're People"

What a bizarre movie starring C. Heston. An overlooked aspect of those who are looking for a techno-fix is the overwhelming petroleum based infrastructure. Are the American people up to great social change and sacrifice?

[Conservativesux]

32. If we run into serious trouble with the oil supply before a suitable....

...supply of a cheap, portable energy source is found, the American people wont have to worry about driving SUV's anymore.

I don't think most people actually realize or care how much oil it takes to put cheap food on the table or in the fridge.

[LiberallyInclined]

35. hemp will help.

crop rotations that include hemp greatly reduces the need for fertilizers, and is easier to till.
hemp oil will run a diesel engine just fine.

[Igel]

15. Yes, but mankind's survived for most of its existence without

electricity, petrochemicals (including fertilizers) and plastics.

The kinds of things that produce lots of potable water, food, food storage, communication, and transportation. The kind of things that makes a large population sustainable.

Wait a couple of centuries until human population trails off a bit because of lower birth rates, and it wouldn't be as big a deal. But that's not what they're predicting.

[aneerkoinos]

23. Numbers

The usual estimate is that human population is allready way past overshoot in regards to the sustainable level allowed by biosphere.

Human population will peak around 2050 with 9-10 billion, when oil production is estimated to be half of today, with natural gas and quite likely also coal having peaked.

Even very basic understanding of ecology and population dynamics tells that it's not going to be pretty, as day by day the chances of a soft landing instead of crashing get smaller.

Cuba has allready survived an energy catastrophe, because socialist society was able to adopt quickly by joint effort of utilizing efficiently what resources where left and allocating them solidarily. Cubans developed agricultural model based on organic, sustainable farming and became de facto vegetarians, now enjoying very healthy diet and lots of exercise.

[NEOBuckeye]

34. Might not be too bad once you are there. But GETTING THERE will be a BITCH

Most Ecologists suggest that the Earth's actual maximum carrying capacity for humanity is around 2 billion. As of this post, according to the ticker at http://www.census.gov we have about 6,420,067,535 people walking around this planet. We are way, way, WAY over that limit. Our population is more than triple the Earth's theoretical carrying capacity right now. And it's still growing. But how much longer can we keep it up?

The "Green Revolution" using petro-based pesticides and fertilizers is what made our population boom possible. By keeping insects, weeds, disease and vermin at bay, as well as by dramatically enhancing growth and production, the petroleum-based pesticides and fertilizers over the past century have enabled unprecedented, amazing crop yields. The massive crop yields have given us an overabundance of food. And whenever food is plentiful, history shows us that people start popping out babies by the dozens. All of that spare energy has to go into something, it seems.

The twist on this is the fact that Oil is what has been making the massive crops yields and baby booms possible. So in a certain sense, you are quite literally eating oil.

The bad news is, as you now know, and everyone else soon will quite painfully realize, Oil is a finite resource, and we don't have much of the cheap, easily extractible substance left. When you consider that Oil goes into much more than fueling large, energy-inefficient SUVs -- including production of food, plastics, medicines, clothing, cosmetics, print inks, electricity, etc. -- then you realize that indeed, without cheap, easily accessible Oil, and without a versatile, relatively safe and plentiful replacement for oil, we have a major, major problem on our hands.

And now you know why this fool, these fools and these fools are acting the way they are. Without Oil, the American "Way of Life" as we know it, is over. Dead. Kaput. Gone. And so are they, which is why they are desperately trying to cling to life, even as we should already be well into downscaling our society and preparing for the inevitable.

The worse news? Some of the most pessimistic of post oil analysts have suggested that we are facing no less than this.

Yeah, that looks like a lot of fun.

Solutions? Alternatives? They're in the works, but we're nowhere near as far along with them as we should have. Instead of fawning over this guy, America really, really should have been listening to this guy. But, oh no, we put it off, and put it off, and now reality is loudly banging on the door, ready to bust it down and beat us bloodly senseless for our stupidity. And it serves us right.

The bottom line: America and the rest of the Western World faces a very rocky transition period ahead. It will almost certainly be a hard landing for the US in particular, though, as gas prices in our heavily automobile-dependent society rise to $5 and then $10 per gallon, and even higher. There will be mass layoffs, mass unemployment, and the stock market and economy will crash. A Second Great Depression, even worse than the first one, will set in. Millions may starve or die of thirst. Countless more face death by disease or even at the hands of their own desperate, angry citizens. There may be an attempt by a Republican (or a "Republocrat") Administration to go to war with China, Iran or whoever else stands in our way of keeping the Oil tap trickling on. With a reluctant, if not decimated military force, we will not win.

Basic necessities that you take for granted today may become consiously vital to your health and survival tomorrow. You will travel much shorter distances (forget Disneyworld), and work, whatever of it you manage to find, will be much closer to home. The bright side? I hope you like your neighbors, because you will be seeing a LOT more of them. In general, people will have to learn how to SOCIALIZE and work together again, which isn't a bad thing by any means. In general, industrialized society will break down and we will have to return to a mostly agrarian-based structure. Organic Farming methods, and not Oil, will be the key to food production and a more sustainable way of life.

One more positive note -- http://www.energybulletin.net/1469.html
-- Some people believe that Organic Farming yields can match and even exceed those of crops produced by petroleum. Now, if we can just figure out a way to keep the lights on.

[NickB79]

36. How old are you?

Until the turn of the century, average life expectancy was what, 45 yrs? Modern oil-based technology has been responsible for most of that increase. I'm only 25, and I don't want to think of myself as over-the-hill, do you?

[happyslug]

42. I love people who do not understand the stat they are citing.

While it is true that the life expectation prior to 1900 was age 45, that was from birth NOT from five years of age. If you reached the age of Five (5) you had the life expectancy to live till you turn 70 (and this was true from bibical times, thus the bible says people will live 3 score and ten).

Given that a five year old could expect to live to 70 how did life expectancy become 45? While If you have two people one dies at age 89 the other dies at age 1 what is the average life expectancy of these two people? (The answer is 45 or 89 years plus 1 year divided by 2 people).

The reason for this is that Prior to 1900 the biggest killer of people was childhood diseases. Childhood vaccines minimized and reduced these to very low numbers AND IT IS THESE VACCINES MORE THAN ANY OTHER REASON THAT PEOPLE'S LIFE EXPECTANCY INCREASED AFTER 1900.

The second Source of improvements is the understanding of disease including Bacteria (i.e. "germs"). Thus treatment of water, generally improvement in sanitation (Not only sewerage but the elimination of the horse , as the main means of transport in urban areas).

I am one of the first to appreciate modern medicine, but modern medicine has to take a back seat to the above two activities when it came to extending life expectancy. Now the above two often was the work of Doctors and other medical experts, but are NOT the treatment of individuals but of society. Oil based society help in this regards (for example replacing the horse manure with air pollution, a PLUS if you understand all of the disease that came with have horse manure in the city streets). Vaccines are less depended on oil, but in many ways a bigger factor in improving health.

My point here is more to show you to be careful with life expectancy, for prior to 1900 life expectancy is artificially low do to the high infant mortality rate. Once you turn age Five (5) life expectancy has NOT increased that much since 1900 (about five years in length and more to do with medical treatment so that young men survived wounds they received in the late teens and early 20s than in any other single factor).

[NickB79]

43. Those are all very good points

I realize that sanitation and vaccination are two key elements that led to the vast increase in life expectancy we see today, and that oil depletion would have less effect on these than most other sectors of our society. However, I was thinking in terms of another great equalizer of population surpluses: food shortages.

Prior to 1900, more people in the US lived in rural areas on farms than in cities. Their means of food production was dependant on man-and-horsepower, fertilizers supplied by manure and crop rotation. Today, fewer than 1% of Americans live on or work on farms. Modern farms are heavily dependant on oil and natural gas for fuel, fertilizer, pesticides, and herbicides. Many fields have lost massive amounts of topsoil that will take centuries to restore, and in the meantime require constant synthetic fertilizer supplements to maintain their productivity. Without oil, modern farming as we know it would grind to a halt. Crop production would plummet, and transporting the available food to be processed and then distributed in cities would be very costly as well.

I grew up on a farm, and when I look around myself now that I live in a large city, I don't think 1 in 10 of the people I see on a daily basis could manage to run even a modest farm. As scoffed at as it is, successful farming is actually a quite exacting science, a science quickly being forgotten at a time when it is needed most.

[Dissenting_Prole]

39. Tell 190 millions spoiled brats in suburbia...

that their dream has come to an end. Then stand back.

http://www.endofsuburbia.com/

[Igel]

19. Bahrain did the smart thing; they positioned themselves as the

new Beirut, a major banking and information-processing center. They saw their oil was going to be running out, and they trained citizens, built infrastructure, and is hitting the ground running.

Sa'udi Arabia is having trouble with their Sa'udization program. Too many jobs are beneath the dignity of native born Sa'udis. Too many pointless degrees. They're going to have a rough landing, I suspect. (All consideration of "peak oil" and implications for the US and other countries aside.)

[No Exit]

22. May they go back to roaming the desert as nomads!

Okay, I admit it, I am repulsed by the huge fortunes of saudis.

You should see them (and Kuwaitis) converging on the Mayo Clinic. Yup, they take only the best in health care. Must be nice.

[bpilgrim]

28. CONSPIRACY THEORIES on DU only make us LOOK BAD! who needs oil anyways

we got by before, eh?

http://news.globalfreepress.com/movs/Al_Bartlett-PeakOil.mp4

psst... pass the word ;->

peace

[bpilgrim]

29. Republican adviser to the Bush-Cheney, Simmons believes Iran's oil PEAKED

as well...



"If Saudi Arabia have damaged their fields, accidentally or not, by overproducing them, then we may have already passed peak oil. Iran has certainly peaked, there is no way on Earth they can ever get back to their production of six million barrels per day (mbpd)."

more...
http://english.aljazeera.net/NR/exeres/80C89E7E-1DE9-42BC-920B-91E5850FB067.htm

peace

[teryang]

33. Here is a contrary Saudi source's statement

http://www.gasandoil.com/goc/company/cnm44131.htm

Saudi Aramco comments on the oil scene
By Syed Rashid Husain

I only put this link on here because it expresses a different point of view. I could not find the date of this article. I question whether the Iranian fields have peaked. This notion is inconsistent with numerous articles on this web site which suggest that Iranian fields are underdeveloped.

At any rate it is the increase in demand coming from Asian/Chinese development which is causing the price rise. Production levels are expected to increase but not enough to meet demand. This is something different from peak oil but the dynamics are similar. Of course peak oil may just come at a later date.

In any case it is clear that the dominant energy resource of choice will be LNG. This is the alternative behavior that major energy companies are investing in now. There is also a conversion technology called Gas to Liquid or GTL. Shell is the most advanced of the majors in its investment and exploitation. Their investments seem to make sense in light of their uncompetitive position in proven reserves. My lay understanding is that GTL technology can also convert anthracite to liguid fuel. The primary output of GTL is a "cleaner" diesel suitable for transportation fuel.

[bunny planet]

41. I read somewhere, can't remember where, perhaps at From the Wilderness

site that Valerie Plame was not deep under cover on weapons of mass destruction, although she may have been involved with that at one time. At the time she was outed by Novakula however, she worked for an American company with a branch in Saudi Arabia, and the undercover work shw was doing was to find out just what condition the Saudi Oil fields were in, had they peaked, were they going to peak soon etc. Perhaps she had already found out that information, and had outlived her usefulness, also what she knew and what her colleagues knew would be very dangerous for the * administration when and if it leaked out. She had to be cut off from her source and decommissioned as an asset. Think about Darth Cheney still 'secret' energy task force meeting in 2001 in the months just before September 11th.

If Valerie Plame let on to anyone that the Saudi Oil fields were about to peak or had already, the neo-con plan for invasion of Iraq to secure more oil would've become even more transparent to everyone, not just those of us who are paying attention to these things. If spoiled energy wasting Americans ever found out they were going to be cut off from cheap oil and their gluttonous lifestyle any politician in power would not be able to survive the backlash. Look what happened to Jimmy Carter, he tried to be honest with the American people about why there had been an oil shortage, and what we needed to do right away to begin the change over to renewable forms of energy, and for that honesty he was booted out of office.

So Valerie Plame's information was way too volatile to be allowed to be exposed. She was outed to cut her off from information about peak oil, weapons of mass destruction the cover story. If you analyze * and Darth Cheney's foreign policy just from the perspective of the possibility of global peak oil all the little dots connect. This is their fear, they have to wage war in order to secure those supplies. I also read that Halliburton just did some heavy investing in a Florida power company that is focusing on solar and wind energy. Hmmmmm, wonder why. Looks like they want to tap out their oil income for as much as they can get while already having a stranglehold on whatever renewable energy resources come on line. Meanwhile tell the people nothing, let them suffer if we have a hard landing economically or any other way from the power down.

They probably have an underground bunker Xanadu already built and in place with plenty of food, water, and generators to hide out in if things get bad up here on the surface. People need to wake up. I recommend everyone see the movie 'The End of Suburbia' and pass it on to as many people as you know, and they pass it on etc. It is a very simple documentary, told in accessible, even sometimes funny, terms, and it will introduce the idea that maybe our way of life as it exists is not sustainable in the very near future.

But, maybe if we educate ourselves and act at the local level, we can do something to promote soft landings in our own commnunities. We obviously have to go grassroots on this, and soon, our federal government is obviously going to do NADA to protect and defend us, that's already abundantly clear.

End of Suburbia movie can be purchased through their website, I believe it's www.endofsuburbia.com or just google the title.

Check out Peak Oil Group on DU, we need lots of people to be discussing these things.