Leading energy analyst believes Saudi Arabia’s crude oil supply near peak;

"Simmons hopes he’s wrong

Leading energy analyst believes Saudi Arabia’s crude oil supply near peak; calls for greater global reserve transparency to anticipate ‘cataclysm’

F. Jay Schempf

Petroleum News Contributing Writer (Houston)


Matt Simmons hopes he is wrong.

But if he’s right in his belief that Saudi Arabia’s giant oil fields might already have peaked and could start into rapid decline in as few as three years, somebody better have a “Plan B” ready or there’s no way, he says — absolutely no way — to avoid a world energy cataclysm.

Pretty strong words. Stronger, perhaps, than any uttered before about energy. Simmons spoke them, and more, at a July 9 Washington, D.C., presentation made at a meeting on Saudi Arabia’s future. The Hudson Institute sponsored the meeting.

Simmons asked for anybody, including the Saudis themselves, to refute his claim. But so far, in his view, nobody’s stepped up. He acknowledges, however, that the Saudis recently have been more forthcoming about their ability to supply all the extra oil the world will require from Saudi fields. But still, it appears that nobody is willing to counter his specific charges."

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IMHO the next 5 years may be interesting to say the least!

total economic meltdown? This is exactly what will happen when the world learns how perilously close we are to "peak oil". They'll try to keep this under wraps as long as they can, but sooner or later (sooner in my opinion) the cat is going to get out of the bag and the world will never be the same afterward.

Alterntive energy? Hell no, drill ANWAR, it'll supply the U.S. with oil for 20 years, right? Haha, not even close. People need to wake up, and damn soon. If Bush is elected in November, kiss your ass goodbye. Total economic meltdown within 3 years guaranteed.

Remains perplexing to me.

First, we can spend $200 billion at the drop of a hat BLOWING THINGS UP. What if we spent it instead on installing solar panels on everybody's roof? At $20,000 per home, in 10 years the entire country would be solar (Yeah, I know that doesn't solve all problems, but it's a step). Plus, that's be $2 trillion into the USA economy and out of the Saudi/Bush gang.

Also, there's an estimate 200-500 years of domestic coal left (don't ask me how I Know - except that I read that in This Forum so I suspect it must be true). Apparently the Nazi's were able to convert their economy to a coal-derived-oil economy in short order - and since some would claim that Nazi's are now running Our Country - we should be All Set. Maybe not forever, but for at least 3 years (and Yeah, it'll suck for the enviroment, but as long as The Economy remains strong, who cares?)

a year to spend. Plus, much of this country is unsuited for solar due to cloud cover etc. And that wouldn't begin to cover industrial and transportation energy needs, or other uses of petroleum (we make plastics, fertilizer, etc. out of it). That's why I'm glad to at least hear the words "energy policy" from Kerry/Edwards.

solar and other forms of clean energy would be preferable to spending 200 billion a year killing people.

I'm just trying to point out this will be a very complicated problem, and as near as I can tell, we (in the "entire USA" sense of the word) are doing nada. It seems like peak oil will change everything that makes this society function.

Ideally we could start with a reasonable energy policy (no tax breaks for 6000 lb SUVs as was recently implemented), and go from there. 200 billion a year would be a great start, but it would almost take a Manhattan Project or Moor Race effort to get there. And by "there", I mean a renewable energy future, whatever that will look like.

It didn't destroy the economy, did it?

And about the Moor Race (or as George Constanza would call it, the Moop Race) - sure, it's questionable how much sporting events really help the economy, but they're always a Nice Distraction.

:-)

To devote to becoming energy dependent if we cared to do so? And, if the money was spent in the USA, jobs would be created in the USA - not sent to Saudi Arabia and used to finance Terrorists who don't always have our best interests in mind.

And clearly, solar isn't the best option for all parts of the country - so yeah, the money could be tailored for different regions. Wind power here, tidal power there, harvesting energy from the Aurora Borealis in Florida and Alaska, and so on.

Coffee, maybe a roll - perhaps a small glass of juice.

All of those depend heavily on oil for transportation and production. The coffee was transported from Columbia. The roll was made of wheat produced in North Dakota, and grown with large quantities of chemical fertilizers and pesticides. It was transported to a bakery which cooks vast numbers of the things, probably using natural gas. Then it was trucked to your store. The juice faces a similar set of requirements.

Notice that solar (or wind, or nuclear) won't fill the need very well. The price of the various components of our hypothetical breakfast will go up a lot at the same time fuel is going up. Wages probably won't keep pace.

So, what do we do? We cut back on spending, maybe a lot. We buy local goods because of lower transportation costs. But that means less economic activity, doesn't it?

What about the workers in the bakery? They may not be able to sell rolls at a price that covers all the costs, and that means lost jobs.

With all this inflation, coupled with high fuel costs, do interest rates go up? If houses start going down, you'll see a lot of people lose their houses. Could our highly leveraged businesses fail as a result of all this? At least some could, right?

Just my opinion...

That seems to overlook some important points.

1) Is coal not a short-term (say over the next century or so?) option for the replacement of many petroleum-based products?

2) The Navy has nuclear powered vessels, couldn't a similar mode of transportation be used to bring the coffee from Columbia?

3) There are many electric powered trains in many countries, couldn't an electricity-powered train haul the coffee from the docks, and the grain from North Dakota? And wouldn't there be jobs created in the conversion of diesel powered railways to electric, and the nuclear power plants needed to supply the electricity? IIRC, WWII provided quite the economic stimulus.

4) Once again, electricity can be used to cook things. The French, for example, have a reputation for being able to cook things quite well, and they use Nuclear Power for a huge amount of their energy needs. Perhaps even cooking. Then the natural gas could be saved for making fertilizers.

5) And what if your money was spent locally? To me that would be a win-win scenario. If to you a vibrant economy means keeping on sending our energy $$s to the Middle East, our IT $$s to India, and our Manufacturing $$s to China - I suppose we'll just have to agree to disagree since it doesn't to me.

As you point out, there's lots of coal and it can be converted. Railroads could be rebuilt. Shipping could as well - and ships can be fired with coal, or with nuclear power.

And, again as you point out, nuclear power is an option.

The challenge is one of time. If the oil crunch hits hard and soon, and the lead time for such strategies as we've discussed requires decades, then disruptions will occur. If the oil crunch is a lot further off in time, and we start doing all of the things you mention and more, then many of the problems can be avoided.

Trouble is, no one knows for sure when the crunch will hit. No one knows how hard it will hit. And we aren't doing much to implement your strategies or anything else.

There's a further problem, and that's cost. Yes, we can get the coal. Yes, we can convert the coal. But there are costs, both in terms of money and in terms of energy, to extract the coal and convert it. The same thing applies to nuclear power.

So, on the one hand, you can still have your coffee, roll, and juice. But it will cost a lot more. Meaning you'll have less to spend on other things. Which results in reallocation of labor and capital...and, hence, disruption again as the economy adjusts.

We can thermally depolymerize garbage and biomass to get some our carbon. We can also directly hydrogenate carbon dioxide, using atmospheric carbon dioxide. For the very short term, we could potentially hydrogenate carbon dioxide put out by coal fired plants, getting two rounds of fuel for each unit of CO2 pollution but I think this would be a very, very, very bad habit to get into for the long term.

The atmosphere cannot support more carbon dioxide from coal or coal synthesized oil or methane. We must eliminate fossil fuels as quickly as is possible.

As I recall (please forgive me if I'm in error) you're a strong proponent of more nuclear power. How do we stand on reserves of Uranium? Do we have enough to fuel lots of reactors for lots of years, or would we be heading up another blind alley?

they are used. If we simply use Uranium in the once through cycle (as is policy in the United States) using enrichment technologies, the world reserves are about 60 years. If we use the (much wiser) technology of Uranium recycling, plutonium burning/denaturation, Thorium based fuel cycles, and we develop safe fast spectrum reactors, the world reserves of fissionable would be about 2,000 to 3,000 years. This assumes a base load consumption stabilized at the expected 2050 consumption level of 1000 exajoules, all of which is supplied by nuclear energy.

These calculations are mine, and are based on known reserves of Uranium and Thorium, chiefly available as land based ores. My figures are close to other estimates I've seen, although some people come up with much higher estimates, though I think these are dubious or assume the use of nuclear power only for electrical generation, and not for the manufacture of motor fuels and industrial heat, applications that are certainly available.

There are additionally three billion tons of Uranium in seawater, and this material would be commercially available right now if the price of Uranium were to rise to about $200-300/kg. (It is between $15-20/kg right now.) Thorium is often discarded today, as a side product from the mining of rare-earth metals with which it is often geologically associated. It has a minor use in refractory materials and gas lantern mantles.

I am a strong advocate of nuclear energy, but I believe that we should use the minimal amount of nuclear resources that we can get away with, in order to extend these resources to as many generations as is possible. In the strictest sense, nuclear resources are not renewable, but are in fact exhaustible. Although nuclear energy is the safest and cleanest option available now (except for wind power) I believe that each generation has some responsibility to accept the additional risks posed by the use of solar energy and biomass. In this way we might make nuclear energy available for tens of thousands of years, rather than thousands of years.

For the long term, we need to (ethically) reduce our population, which has already far exceeded the carrying capacity of the earth in my view.

Unfortunately, I'd say no. Hence, if it comes down to increased Coal Use or ECONOMIC MELTDOWN, I'm betting society will choose the former. Of course I know you claim the Nuclear Option is better but there seems to be a degree of hysteria surrounding that plan hindering its adoption.

In any event, I don't see COMPLETE ECONOMIC MELTDOWN within three years (At least not due to a shortage of oil).

History is of course littered with poor choices. On the other hand, historically people had much less information than they have now.

In my (admittedly) optimistic view, the growth of fundamentalism and dogmatism (and its sister hysteria) in modern times is not so much a strengthening trend, but it is rather a dying gasp screaming against the inescapable reality of the primacy of the scientific method, which involves measurement of things as they are and drawing inference based on those measurements. I believe that all we need to do in this matter of energy is to quietly and patiently refer to the data.

For a historical precedent, I prefer the case of Galileo. It did not result that the Pope's decree in any way effected a single orbital parameter of the earth, or of Jupiter, or of Mars. They continued to move as they always had. Ultimately it was necessary to overrule the Pope and not Galileo. History records the Pope as a fool. So it is with energy choices. We will not be able to use coal and oil forever simply because if we attempt this, so many of us will be killed that the demand for energy will necessarily go down. This is a simple feedback loop and it is independent of either ethics, reason or dogma.

I would not spend all of the energy (personal, not physical) that I do arguing the merits of energy solutions if I believed that the situation were hopeless and intractable and that we must simply have an irretrievable disaster before we wake up. I do believe that we can carefully tip toe back from the abyss, but as is always the case in times of danger, we will succeed only if we are aware, awake and careful.

I have traveled in liberal circles my entire adult life, over thirty years. I've seen a sea change in the liberal view of energy (including my own), especially with respect to nuclear energy which increasingly - and correctly - is being now be disentangled in many liberal minds from the justifiably maligned specter of nuclear war. People challenge me here all the time based on historical liberal views of nuclear energy, but even so, I very much doubt that ten years ago in a liberal place like this that I would be able to have obtained as many expressions of support for my argument that nuclear energy is clean and safe. One of the great strengths of liberalism is that liberals are forearmed at opening their minds. I believe that we have that capability as a species.

I believe that humanity as a whole will ultimately overcome this vast environment challenge, not without serious scars, but nonetheless alive. I am not sure that the United States will be a part of this renewal, but we would not be the first nation to be discarded by history after blazing a trail.

However, just because I can't ever stop myself from playing devil's advocate, I will bring up the history of the library of Alexandria.

At it's peak the scholars there were developing a theory of the atom, a solar system model where the earth and other planets went around the sun, and good calculations of the size of the earth (including the fact that it was spherical).

Then it was all burnt to the goddamned ground, and we suffered through 1500 years of Dark Ages and misguided Aristotelian anti-observational philosphy, before we dug ourselves out.

Of course, we've gotten a lot farther now, and many things are different. I'm just sayin...

charge of the final firing is said to have remarked something along the lines of "If the books do not agree with the Koran, they are wrong and should be burned, and if they do agree with the Koran, they are superfluous and should be burned."

There is however, a fundemental difference between then and now however, inasmuch as everyone on the planet knows that everyone else on the planet exists. Moreover, it is possible to replicate huge amounts of information and disseminate it widely. I happen to have thousands and thousands of documents on my hard drive on various subjects that I've down-loaded from the internet, and I'm sure that many of thousands of other people have done much the same. Therefore a person who burns my computer because it doesn't agree with the Bible, will not be able to kill the ideas contained in the documents.

I note that Galileo had a similar advantage in his time. The Pope might have an easier time of erasing Galileo's ideas had the printing press not been around.

I have heard it said that Archimedes probably invented calculus almost two millenia before Newton was born. Certainly Archimedes method of calculating pi - which survives - was quite nearly a limit of infinite sums. We'll never know this for sure, because of that matter with Koranic agreement; almost all of Archimedes texts were burned and much of what we know of Archimedes is second hand; but I very much doubt it's in anyone's power, the even the boy king, to erase Newton, or Darwin, or for that matter, Glenn Seaborg.

And the famous quote in question comes from a christian scholar, who got it admittedly from a second hand account. The muslims actually were quite good in taking care of ancient texts. They were much like the Irish in that regard.

As for Archimedes, I believe there was a recent translation of a work accredited to him, where he sees a need for calculus, and is attempting to work it out, yet can't quite get there. Can't blame the guy for trying though, hell, algebra wasn't even invented by the Arabs until, what, the 8th century?

any other religion.

I despise all religions equally. (Actually I'm really not that fair: I tend to despise monotheistic anthropomorphic religions more than deist and animist religions, although not by much.)

at the commercial level still consumes more energy than it will produce. I read an article in Nature describing a new advance that will make this technology feeble, but we're still a ways away. Do you have other information?

All energy transformations are less than 100% efficient; all involve an energy investment. They only lose energy when the require the input from another form of energy that exceeds their output.

I am not really interested (myself) in getting the energy value of garbage, or even biomass. I am only interested in the carbon in them as a chemical storage medium for other forms of energy, primarily nuclear and solar. This is in fact the role carbon serves in the biosphere. I believe that the best means of dealing with carbon is in situations employing supercritical water oxidation, which is sometimes thought of as being "thermal depolymerization" except it has a broader application.

The heat I would like to see in supercritical water oxidations would be either nuclear generated or generated by solar light concentrating systems such as heliostats and parabolic mirrors.

fibbing on what they have as back up and we can not find out from SA.That is one of the things stock price needs.

the effect of not propping up the dollar with oil trading will be like. It seems like the countries that have switched (or even considered switching) to Euros for oil trading have felt the fickle finger of fate.

that middle east countries were overstating their reserves.
The question was by how much... and the answer may be by factors
of 3 or 4 or even worse.

We need a "moon mission" effort by our government to develop
sensible alternative, and improved fleet standards in the mean time.

I think at least $100B program. The economic future of the world
is at stake. Oil at $100 or $150 per barrel is unacceptable, the
shock might lead to a worldwide depression. We DEPEND not just on
oil, but on CHEAP oil (and that's a big difference).

Where are the new fields and do recall it takes 20 years to get on line. They have new ways to find fields and no big ones have been found. No new refinery have been built and not because of the govt. saying no as all have been made a little larger at far less money. Why? Why are we sending army and Private armies to Mexico, Venezuela, Columbia, Ecuador, Malaysian Straits or trying to send them? I would say they are oil countries. These are the very counties talking about the Euro and not dollars. Look at the new ways they are using to get oil out, and they get less all the time. Guess who is going to control this oil, what is left.

of the 21st century ( IMHO ) will be resource wars, initially for Oil, and Water. What you are describing is the first defensive maneuvers by the US to protect oil resources ( not including Iraq ). You missed out the Army bases in the Caspian region, and West Africa!

As the oil runs out, so will the petroleum-based fertilizers that have supported unprecendented levels of agriculture yield. Coupled with the increasingly volatile climate changes that are already putting stress on agricultural production capacity, we're going to face widespread famine.

So those areas of the world that win the new Climate Lottery are going to be the focus for conquest. Which, of course, almost certainly guarantees a disruption of the ability of native farmers to grow food.

Actually, fertilizers are not currently petroleum based. Nitrogen fertilizer is made using natural gas for process heat and as a feed stock. Oil could be used as well, I suppose. Theoretically, any energy source/type could be used for process heat, and the hydrogen could come from sources other than natural gas, but the fertilizer would be very expensive.

Phosphorous rock is mined in the U.S. primarily in Florida and the southeastern states. Phosphorous is generally treated to make it fast acting, but I don't know the process. Ground phosphorous rock may be used, but it won't have a great effect immediately. I have read that our supply is 75-100 years at today's use rate. Morocco, for example, has very large deposits, but if we do not have fuel for shipping, we won't see as much coming over in sailing ships.

Potassium also comes from treated rock. I believe that it is quite common.

One way to conserve these three fertilizer elements is to recycle biomass back into the soil as much as possible. That's one reason why farmers used to put all manure back on the fields. We could do that again, but that approach works best with smaller farms producing livestock and feed in the same operation. It is not enough, though.

Some sewage treatment plants have been trying to reclaim "biosolids" that are not considered contaminated with hazardous substances. As we generally clean up hazards, the biosolids become better as well. Usually the biosolid is composted with woody plants, and can be spread on pasture and fields that do not produce human food.

It may be possible to reclaim nitrogen from our wastewater streams. I saw an internet site not too long ago for a company that had built a sewage treatment plant system that supposedly is able to extract ammonia from waste-water streams, and use it to make nitrogen fertilizers like anhydrous ammonia, ammonium nitrate, ammonium phosphate and ammonium sulfate, depending on the substance available. Of course, this is recycling urine. The Chinese are apparently interested. I do not know what the energy demands are of this system.

I would hope that sewage and water treatment plants would have priority in an energy-short future. Being able to pull even a small amount of nitrogen fertilizers, recycled, out of the waste stream would help. In addition, I have read of other systems that are able to remove phosphorous from waste streams.

Another method of recycling fertilizers is to save and compost non-meat food waste. This is being tried in the San Francisco area, and the resulting compost is very fertile.

All of these ideas may help replace a portion of the fertilizers that now are responsible for the huge crops farmers reap. To the extent that the recycling can take place regionally or locally, transportation fuel will be saved. Together with crop rotations, green manure and other organic/sustainable farming techniques, we might be able to lessen the effect of the withdrawal of most commercial fertilizer from our fields. Nonetheless, I don't expect that we will be able to export any food in the latter part of the 21st century. Indeed, we may not have enough here. It is all a scary thought.

This on Saudi Arabia / OPEC unable to produce any more oil per day:-

http://news.bbc.co.uk/1/hi/business/3529976.stm