The Saudi Oil Bombshell--Asia Times (new book out, too)

From the new World Media Watch up now at http://www.zianet.com/insightanalytical
Tomorrow at Buzzflash.com



1//Asia Times Online, Hong Kong Jun 29, 2005

http://www.atimes.com/atimes/Middle_East/GF29Ak01.html



THE SAUDI OIL BOMBSHELL

By Michael T. Klare
Michael T Klare is a professor of peace and world security studies at Hampshire College and the author of Blood and Oil: The Dangers and Consequences of America's Growing Petroleum Dependency


For those oil enthusiasts who believe that petroleum will remain abundant for decades to come - among them President George W Bush and Vice President Dick Cheney, and their many friends in the oil industry - any talk of an imminent "peak" in global oil production and an ensuing decline can be easily countered with a simple mantra: "Saudi Arabia, Saudi Arabia, Saudi Arabia."

Not only will the Saudis pump extra oil now to alleviate global shortages, it is claimed, but they will keep pumping more in the years ahead to quench our insatiable thirst for energy. And when the kingdom's existing fields run dry, lo, they will begin pumping from other fields that are just waiting to be exploited. We ordinary folk need have no worries about oil scarcity, because Saudi Arabia can satisfy our current and future needs. This is, in fact, the basis for the Bush administration's contention that we can continue to increase our yearly consumption of oil, rather than conserve what's left and begin the transition to a post-petroleum economy. Hallelujah for Saudi Arabia!

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."

SNIP

If Simmons is right about Saudi Arabian oil production - and the official dogma is wrong - we can kiss the era of abundant petroleum goodbye forever. This is so for a simple reason: Saudi Arabia is the world's leading oil producer, and there is no other major supplier (or combination of suppliers) capable of making up for the loss in Saudi production if its output falters. This means that if the Saudi Arabia mantra proves deceptive, we will find ourselves in an entirely new world - the "twilight age" of petroleum, as Simmons puts it. It will not be a happy place.

Before taking up the implications of a possible decline in Saudi Arabian oil output, it is important to look more closely at the two sides in this critical debate: the official view, as propagated by the US Department of Energy (DoE), and the contrary view, as represented by Simmons' book.

MORE

bill.

"...Saudi Arabia's oil output is generated by a few giant fields, of which Ghawar - the world's largest - is the most prolific.

These giant fields were first developed 40 to 50 years ago, and have since given up much of their easily extracted petroleum.

To maintain high levels of production in these fields, the Saudis have come to rely increasingly on the use of water injection and other secondary recovery methods to compensate for the drop in natural field pressure.

As time goes on, the ratio of water to oil in these underground fields rises to the point where further oil extraction becomes difficult, if not impossible. To top it all off, there is very little reason to assume that future Saudi exploration will result in the discovery of new fields to replace those now in decline. "

But the Bush/DOE/GOP are selling projections that have Saudi oil production doubling.

And our media - and sadly our Democratic Party leaders - let the useless "Energy Bill" get spoken of as something more than a tax break for rich oil corporations, an over-ride of local law to get new nuke plants, and a welfare program for corn farmers. :-(

Lets call them Big Corn.

Anyhoo, oil will hit peak soon, and SA will soon enough let us know when. The whole house of cards will tumble down. Kinda sad.

And our people won't even make it easy to get 50 miles to the gallon in our horseless carriages. I guess they figure tax revenues will go down if we all paid less taxes at the pump. Can't have that, now can we?

keeps getting heavier and heavier!

no-blood-for-oil!

peace

I'm only about 50 pages in, but it is a methodical demolition of all the happy assumptions we've had on Saudi oil supplies for years and years and years.

The interesting thing is that the clerk said that they'd sold 10 copies just that day, and the book was buried back in the business section. Interesting.

You'll never believe the market optimists again.

and scary, too. And all the while, the US has no plan for the future and alternative energy sources. And according to the author's sources, the world has about 5 years to get its act together before the decline sets in.

Glad I have a bicycle.

Production (right now) is actually very strong. The trouble is the emerging economies of China and India.

The 'REAL' crunch comes when the supply truly starts to decline and the demand curve continues to grow expotentially.

...which will go into harvesting/refining as soon as the price of ground oil hits about $75 a barrel or so.

Huge quantities of the stuff in Canada, US, Australia, etc...