Monday, February 11, 2008
independent confirmation of the decline of ghawar
in the main, i think the american foray into the middle east -- surreptitiously cloaked in the post-9/11 dogma of fighting "terrorism" and spreading "freedom" to make it palatable to an inherently populist and moral electorate -- has been quietly all about these two things: 1) maximizing production from what large under/misdeveloped fields in the mideast there are, and 2) negating possible political bottlenecks that would constrict such development. is there a more realistic (in the sense of 'realpolitik') course of action for the suzerain of the global economic empire?
there have since been some fairly candid commentaries that oil production will not meet demand. potential economic and social consequences in the west could be hard-hitting and sudden as the export problem becomes an issue by as soon as 2010.
the reality of a production capacity peak, whether the reason is hubbert's peak or chronic underinvestment in capacity, is being bolstered by OPEC. some ministers have recently said that the cartel is running flat out, and in any case have refused to increase production quota in spite of massive demand increases and $90+/bbl pricing. the president of the united states is on the record implying that saudi arabia, at least, cannot expand production.
moreover, oil companies themselves have been quietly giving credence to the imminency of hubbert's peak.
Dr Jim Buckee has just retired as President and CEO of Talisman Energy, a major independent Canadian oil company with a market capitalisation of $25-billion. On the phone from Perth, Dr Buckee told me that 'peak oil' was now either here, or very close.[... just last week the Chief Executive of Shell came out and said that easy oil was coming to an end.]
... I think it was only a matter of time before one of them had to say that and the pronouncements of the majors are inscrutable at best and I believe they often have a very political overturn. Always the line of the major oil companies, Exxon, Shell, BP has been, 'there's plenty of oil, you know technology will overcome shortages; we'll find it'.
They changed a little bit to, 'there's plenty of oil, but access is difficult' and then this is a change again saying, 'well actually, it looks like it's finite and you know we're looking over the hill'.
now comes this via econbrowser -- an analysis of well drilling over ghawar which indicates that earlier analysis regarding ghawar's decline are probably accurate.