Tuesday, March 04, 2008
Today's Wall Street Journal op-ed by Nansen G. Saleri, the former head of reservoir management for Saudi Aramco, makes you wonder just how stupid the Saudis really think the rest of the world is.
And they're probably right.
With all the work done by the Peak Oil crowd (see Saudi Arabia's Crude Oil Propaganda) and after all the pleadings by the likes of Matt Simmons to make their reserve data available for public scrutiny, it all comes down to, "Trust us, the oil's there".
Just reading this editorial with it's four central arguments for why the world has plenty of oil - resources in place, recovery efficiency, rate of consumption, and state of depletion at peak - you have to wonder why the first argument merited only about 50 words of explanation while the other three arguments got about three times that amount.
The World Has Plenty of OilThat's all you get for resources in place - trillions and trillions of barrels - it's there - the guy used to work there, he should know.
Many energy analysts view the ongoing waltz of crude prices with the mystical $100 mark -- notwithstanding the dollar's anemia -- as another sign of the beginning of the end for the oil era. "[A]t the furthest out, it will be a crisis in 2008 to 2012," declares Matthew Simmons, the most vocal voice among the "neo-peak-oil" club. Tempering this pessimism only slightly is the viewpoint gaining ground among many industry leaders, who argue that daily production by 2030 of 100 million barrels will be difficult.
In fact, we are nowhere close to reaching a peak in global oil supplies.
Given a set of assumptions, forecasting the peak-oil-point -- defined as the onset of global production decline -- is a relatively trivial problem. Four primary factors will pinpoint its exact timing. The trivial becomes far more complex because the four factors -- resources in place (how many barrels initially underground), recovery efficiency (what percentage is ultimately recoverable), rate of consumption, and state of depletion at peak (how empty is the global tank when decline kicks in) -- are inherently uncertain.
- What are the global resources in place? Estimates vary. But approximately six to eight trillion barrels each for conventional and unconventional oil resources (shale oil, tar sands, extra heavy oil) represent probable figures -- inclusive of future discoveries. As a matter of context, the globe has consumed only one out of a grand total of 12 to 16 trillion barrels underground.
By Mr. Saleri's math, don't look for peak oil until sometime between 2045 and 2067.
Could there be a bigger disservice to the rest of the world than the continuing claims of nearly infinite global oil reserves, much of it still under the Saudi Arabian desert?
Maybe these claims would be just a little bit more believable if Saudi oil production hadn't declined over the last two years while they've continued to frantically poke holes in the ground in an attempt to coax more of the stuff to the surface.