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Peak Oil: Simmons v. Saudis, Round Two
Neil King, Wall Street Journal (Environmental Capital blog/column)
Both Nansen Saleri, former chief of reservoir management at Saudi Aramco, and Houston-based investment banker Matthew Simmons are feeling good these days about the famous-and weighty-debate they held four years ago at Washington’s Center for Strategic and Security Studies.
Are Saudi Arabia’s massive oil fields in great shape-or falling apart? Can Saudi Aramco help slack the globe’s soaring energy thirst far into the century-or has that ability already peaked?
Simmons, in his book “Twilight in the Desert” argued that several big Saudi fields, including the massive Ghawar field, were showing signs of serious strain. Their debate before a packed house at CSIS marked an unprecedented moment of openness for the secretive Aramco.
Saleri now says in an interview that time has proven Aramco right. Simmons “was saying four years ago that Ghawar was going to collapse and that Saudi Aramco was going to go into decline….[But] that precipitous decline never occurred,” he says.
Saleri, who left Aramco last year to create his own Houston-based reservoir-management company, insists Ghawar will keep pumping five million barrels a day far into the future. Aramco also managed to revive some other behemoths, like Abqaiq.
“Abqaiq became a renaissance story for Aramco,” he says, insisting that the field’s pressure remains strong and its water content is going down even after more than 60 years in production. Abqaiq “is doing fantastically,” Saleri says.
Simmons, reached by phone in Houston, says he feels equally vindicated-and increasingly alarmed. He based his book largely on information dug up in old technical journals. In recent weeks he has hit the archives again, with thoughts of writing a second book.
What he has found, he says, “is so unbelievably scary you can’t believe it.” He claims that there is mounting technical evidence that Aramco is struggling to deal with increasing volumes of water at its hugest fields. With water production going up, he says, oil production is going down.
“It is absolutely clear as a bell now that all of those fields are heading toward being another Cantarell,” referring to the massive Mexican offshore field, which is now in rapid decline.
So how different are the world views of Simmons and Saleri?
Saleri says he’s convinced technology will help revive aging reservoirs all over the globe, and world oil production won’t hit peak until well after 2050.
Simmons believes we may already have hit that peak. After his recent studies, he now fears he has “grossly underestimated how savage the post-peak oil reality will be.”
(12 February 2008)
Hat tip to Neil King. Comments, links and photos at original.
Bartlett interviewed by Warren Brown, DC auto columnist (Audio)
Warren Brown, WMET
Congressman Roscoe Bartlett was a guest February 5 on Warren Brown’s “On Wheels” radio show from 12 noon to 12:15pm carried in the Washington DC metro area on WMET-AM 1160. It can also be heard live or downloaded as an mp3 from the internet at this link:
Topics for discussion include the anticipated approval by the House of Representatives this week congratulating the Automotive X Prize competition to produce a 100 mpg gasoline equivalent car and President Bush’s recent comments during his trip in Saudi Arabia that acknowledge peak oil – ie. limitations on the ability of world oil production, particularly by OPEC, to match increasing demand.
(5 February 2008)
The label on the broadcast (from the drop-down menu) is “On Wheels 20080205”. The interview begins at about 3:30 minutes into the audio segment.
Warren Brown is one of the few journalists in the Washington Post to write about peak oil. We’ve linked to him before at Energy Bulletin. -BA
Simmons speaks to Minnesota House of Representatives (slides, audio)
Matthew Simmmons, Simmons & Co. International
On a snowy Feb 4, 2008 Matthew Simmons presented to a joint meeting of the Minnesota State House & Senate Energy Committees.
Agenda: HF995 (Hilty) Peak Oil; Governor memorialized, by resolution, to take action to prepare a plan of response and preparation to meet the challenges of peak oil. Presentation on global energy supply constraints.
See & hear it!
MP3 of the audio is on this page:
or download here:
(4 February 2008)
Courtesy Jim Teter.
Green Ink: All The Coal In China
Keith Johnson, Wall Street Journal (Environmental Capital blog/column)
Venezuelan tough talk and cold weather drove oil higher Monday, reports the WSJ, but a healthy U.S. inventory situation is keeping a check on prices for now, notes Bloomberg. Venezuela’s scrap with Exxon will likely mean big pain for state oil company PdVSA, the WSJ reports, since it is torn between exploration needs, social spending commitments, and now an asset freeze. Why haven’t high oil prices stunted the U.S. economy? Global growth has benefited U.S. exporters, so the U.S. has basically covered the higher cost of oil, says Real Time Economics.
This is the end: A detailed look at peak oil and “The Limits to Growth,” over at The Oil Drum, posits that running out of oil could be a quicker and more painful hit to civilization than global warming. At the Energy Bulletin: More dirt on the $100,000 bet between peak-oil proponents and researchers CERA. Meanwhile, Peak Opportunities takes a close look at fast-declining oil fields in Mexico.
If China’s thirst for oil has been behind part of crude’s surge, China’s impact on global coal prices will come even quicker and harder, reports the WSJ. Now a net coal importer, China’s appetite is having a butterfly effect around the world, helping coal miners in the U.S. but pressuring prices for the world’s main source of power. And maybe of transport fuel: TOD takes a look at the economics of coal-based ethanol.
General Motors swung to a fourth-quarter loss of $722 million, reports the WSJ, but things were worst at home: the automaker lost $1.1 billion in North America. That’s already a tough market, which is why GM chief executive Rick Wagoner said he wants a nationwide fuel-economy standard, reports the WSJ, rather than tougher standards in individual states that would “only make it that much harder to achieve the end results we all want to see.”
Finally, fusion makes its umpteenth comeback, notes EcoGeek, with power-generation costs that could rival coal in five years. Five years is how long South Africa will struggle with power outages-long enough to derail the 2010 soccer World Cup perhaps, worries Common Tragedies.
(12 February 2008)
Links at original. Professionally done – I hope this WSJ blog will continue. -BA
