The pleasure was surely visceral. If it's in WikiLeaks, it's got to be true. Certainly it was a moment of triumphal satisfaction for the Peak Oil Pranksters. There it was in digital 'black and white,' embedded in cables released by WikiLeaks and headlined by the the Guardian: "Saudi Arabia cannot pump enough oil to keep a lid on prices." The story reports that in November 2007 the U.S. Consulate General, subsequent to a meeting in Riyadh with a former Saudi Aramco "oil executive," cabled Washington that reserves of the world's biggest oil exporter were being overstated by nearly 40%. Really?!
Firstly, how competent was this Saudi informant, Sadad al-Husseini, and on what basis was he authorized to speak? His credentials seem legitimate enough, but his message was curious to say the least.
Second, the Saudis have been stubbornly opaque about the extent and size of their reserves. They have steadfastly refused to disclose their reserve estimates, nor have they permitted any independent agency to audit their oil reserves. This, in spite of the vital role Saudi Arabia plays in supplying world markets.
Thirdly, the 300 million barrels of Saudi oil reserves that, according to the Embassy cable had been overstated, are highly suspect to begin with. Without specific confirmation, the Saudis have let the world believe that their reserves range in the area of 260 billion barrels, a figure generally accepted by the field and held as maximalist gospel by the peak oil crusaders, such as the late Matt Simmons. Yet, deducting 300 million from 260 million doesn't make much sense.
Fourth, the source of this information was conveyed to the embassy personnel in 2007. It infers only 51 percent of Saudi reserves as being recoverable. That was then, this is now. In the more than three years since, there has been a time warp in the application of new oil drilling technology. Extraordinary strides have been made in drilling for oil and gas. In the United States alone, because of new drilling techniques, shale gas has been accessed, and the gas reserves of the United States have increased five fold over the past five years alone, enough to cover our domestic needs, and making the United States a potential exporter of natural gas. A further example is the growing oil production from shale oil drilling techniques in the Bakken formation of North Dakota and Montana that will be producing millions of barrels/day in the years ahead.
Most significantly however was a report that same year, 2007, the year the WikiLeaks intercept was written, that was published in the New York Times, "Oil Innovations Pump new Life Into Old Wells." From the article:
Within the last decade, technology advances have made it possible to unlock more oil from old fields, and at the same time, higher oil prices have made it economical for companies to go after reserves that are harder to reach. With plenty of oil still left in familiar locations, forecasts that the world's reserves are drying out have given way to predictions that more oil can be found than ever before.
The article, presciently, goes on to comment:
Increased projections for how much oil is extractable may become a political topic on many different fronts and in unpredictable ways... Many oil executives say these so called peak-oil theorists fail to take into account the way that sophisticated technology, combined with higher prices that make searches for new oil more affordable, are opening opportunities to develop supplies. As the industry improves its ability to draw new life from old wells and expands its foray into ever-deeper corners of the globe, it is providing rebuttal in the long-running debate over when the world might run out of oil.
The article further cites Nansen G. Saleri, the head of reservoir management at the state owned Saudi Aramco, who advised that new techniques are significantly boosting Saudi Arabia's reserves, techniques such as real-time imaging software and the ability to drill horizontal wells. Saleri stated, "Saudi Arabia's total reserves were almost three times higher than the kingdom's officially published figure of 260 billion barrels." He further estimated the kingdom's resources at "716 billion barrels, including oil that had already been produced," continuing that he "wouldn't be surprised" if ultimate reserves in Saudi Arabia eventually reached 1 trillion barrels.
The question needs be asked, what was the purpose behind Sadad al-Husseini passing along his information to the American Embassy in Saudi Arabia in November of 2007? The perception of shortage and inability to meet demand is one of the bedrocks of the oil producer's pricing propaganda, thereby rationalizing ever-steepening prices and massive profits to the OPEC cartel and their oil industry allies. Passing on self-serving information about oil production constraints to U.S. State Department channels of the oil-addled Bush administration, the Saudis could be confident it would not be analyzed with a critical eye and would serve as an underpinning of what lay ahead. Six months later, oil was to hit $147 a barrel, and we were paying $4/$5 per gallon at the pump, helping crash the economy a few months thereafter.
The Guardian article, to buttress the WikiLeaks revelations, seeks out comment from Faith Birol, chief economist of the International Energy Agency. They quote Birol as saying "conventional crude output could plateau in 2020, a development that was 'not good news,'" without telling us that Mr. Birol's previous employer was OPEC. And then to bring the argumentation home, they cite Jeremy Leggett, "convenor" of the UK Industry Taskforce on Peak Oil and Energy Security, as saying, "We are asleep at the wheel here: choosing to ignore a threat to the global economy." Perhaps Mr. Leggett would be better identified as as choirmaster of the Peak Oil Choir.
Such is the oil information we are fed by the oil industry, a somnolent press and passive government agencies, all trying to make us feel better while we pay exorbitant rent for what we have foolishly let become a basic economic necessity.
http://www.youtube.com/watch?v=hHmXhgBhtWk
MrEnergyCzar
Costs don't matter . . . price is what people are willing to pay.
MrEnergyCzar
I think it's been superseded by sonic dectection, but for many years, mudlogging was the way oil was found.
Mudlogging is taking tiny samples of mud from an exploratory drill hole, making slides of it, and looking for microscopic fossils.
The presence of microfossils...generally corresponds with the presence of oil.
Even if oil were abiotic...there seems to be absolutely no evidence that mother nature's going to fill the tank in anything remotely like the brief amount of time needed to keep our oily economy oozing along.
Whay are y'all surprised about this? the US hit peak oil in 1970, discovery peaked in the 60's. The globe is not a balloon filled with petroleum, it's mostly rock, and the conditions to create petroleum are rather selective.
this is not just true of the Saudis, by the way--Mexico's declining production and increasing consumption may remove them as an exporting country by 2017. Since the US depends on Mexico for 11% of all its imported oil, this is no small problem for us.
http://www.theoildrum.com/node/7465
ALL the OPEC countries are likely inflating their reserves the way the Saudis are.
Right. "accessed." Lovely euphemism for a process that actually involves the risk of polluting water basins with huge quantities of toxic chemicals.
But, no, we're not structured sustainably, and we have to stop sticking our heads up our rears about it.
This is going to pinch.
Like almost all industries, including solar PV and semi-conductor production, shale requires some use of toxic materials. They've drilled 500 shale wells in Houston alone, and the people there seem to be getting by just fine. The dangers from shale drilling has been overblown but the peak-oil fearmongers whose livlihood is based on energy scarcity. The spot price of natural gas indicates energy abundance.
Once fossil fuels are depleted, how will we manufacture all the semiconductor chips for solar panels and nuclear grade components that go into nuclear power plants? Maintaining a clean room requires a tremendous amount of energy,and nuclear grade components require precision manufacture and testing which makes them very expensive. As an engineer in the energy sector, I see no healthy discussions about these issues and no new truly sustainable technologies on the horizon.
News of new technologies arrives in my inbox everyday, none of which will resolve our fundamental problem of diminishing oil reserves. Did you know there's a chip that can be implanted in the brain to intercept pain signals?
I'd like to see some geologists weigh in on this issue, yet the people who are the true experts are curiously silent on the issue of Peak Oil. Why is that?
Colin Campbell founded ASPO and he's an expert--PHD in Geology, exploration for Texaco, BP, Fina and other oil companies. He's not shy about his credentials--or his opinions.
http://www.oilcrisis.com/campbell/
Current president of ASPO is Kjell Aleklett,Professor of Physics at Uppsala University, Sweden, and leader of Global Energy Systems research and the Uppsala Hydrocarbon Depletion Study Group.
The late Matt Simmons was the founder of Simmons Energy and an adviser to Cheney's Energy Task force (which he denounced several years ago). He wrote TWILIGHT IN THE DESERT, about Saudi Arabia's peak of oil supply.
The 2005 Hirsch report for the DOE lists the names of the major geologists who've staked out a position on when Peak Oil will occur. It's a downloadable PDF.
http://www.netl.doe.gov/publications/others/pdf/Oil_Peaking_NETL.pdf
there are plenty of reputable scientists, geologists and oil-field experts willing to speak out about Peak Oil. But somebody has to put a microphone in front of them.
Who was privy to the State Dept cable?
Couldn't have been much of a secret - if oil speculation ensued after it's transmittal.
Conversely, the perception of abundance allows OPEC nations to lie blatantly about reserves so they may sell beyond their allotted percentage of estimated reserves - an agreement all are bound by. Articles denying oil shortages in any form give the impression of no need for renewable resources and stifle alternative energy development.
If oil was so abundant wars would not be a necessity to gain the privileged of shipping oil half way across the globe, it wouldn't take 1 bbl of oil to produce 2 bbls from oil sands, and it wouldn't be necessary to drill further and deeper offshore. Shame on you, Mr. Learsy, for succumbing to a lobby who's only goal is excessive profits through further dependence on a dwindling resource, and having the gall to publish the swill here.