But I am still literally astonished that Oil Patch types are predicting rising production given the evidence that production from the Big Four and the North Sea is nose-diving.

WT,

I check in a few times just to see what you're saying due to the respect you've garnered around here.  I've got one answer for you though and it's from your mouth actually.  

You've always talked about how the East Texas Oil patch was being drilled like crazy following the RR Commisions decision to remove the quotas.  Everyone drilled like crazy and the information verifying Hubbert was established.  Less oil was produced.  Aggregate world peak is no different, so the views of those in the oil patch should also be similar.  I would expect the same/similar reaction as the one over 30 years ago.  Ive been taking a lot of sociology and psych courses for electives.  I've learned that human action is truly at the center of economics, but it took psych and sociology to connect the dots.

As has been pointed out already, for those who click on the link, they will find that this is not what he said. That is your version of what he said, and as I argued before, your interpretation is incorrect.

NO Robert, that is exactly what he said! He said existing fields. Ghawar is an existing field. I am astounded that you think it can be interperted in any other way. They need 500,000 to 1,000,000 million barrels per day of new production just to keep even. They recently brought on 300,000 barrels per day of new production in Haradh but that did not stem the decline. Just prior to that, 600,000 barrels per day of new production was brought on line from Shaybah and that bearley kept them even in 2005.

Of course Saudi closed the doors on scrutiny of their oil operations in 1982. So, seriously, we don't have good information on what's gone on since then. Plus, given your above misquote, I would prefer to see the original information in context. We do know that they have increased production in recent years.

But they have never since reached the peak point of 1980 or even the production they reached in 1981, the year Ghawar peaked. After resting Ghawar for over a decade they were not able to get it back to its 1981 peak. And again Robert, there was no misquote on my part.  And as for the original source of the data, Simmons says it comes from The Oil & Gas Journal, various issues 1950--1882. Now you I take Simmons' word for it.

A interesting thing about that. I can't take credit for being the first to notice this, but if Ghawar is down some 2 million bpd as reported, that means they were able to open up the taps on 2 million bpd of additional production. I think you underestimate what they are capable of, given what they have already demonstrated.

I think it entirely possible that Ghawar is down below 4 million barrels per day. And I think it possible that Saudi is also inflating their current production. In fact I also have inside sources that tell me that this is exactly the case. But because that source is still employed in Saudi Arabia, I am not at liberty to comment further on that.

I would ask you, Ron, to consider your future influence if the Saudis do increase production. Think about credibility here. You want people to listen to you, but they won't if the Saudis increase production and you keep saying they can't. You know that their oil operations are not transparent, so it would be wise to avoid dogmatic statements.

Robert, I am saying the same thing that Deffeyes is saying. I am saying the same thing that Simmons is saying. I am saying that we are currently at the peak. I am saying that it is highly likely that December of 2005 was likely the peak month but at any case we are at the peak of world oil production right now.

We have several other people on this list saying the very same thing. But if it is your wish Robert, that everyone on this list preach the same line, that we all pull our punches, then just say so. If this list has an official line, a line of which none of us are allowed to step over, then just say so.

I fully realize that I am putting my reputation on the line. Simmons says he is staking his career on what he wrote in Twilight and on the statements he has made since. Well, I do not have a career to lose but I think I know about as much about Saudi Arabian oil production as anyone on this list, having spent 5 years there myself and have a very close relative there now and has been there since 1991. (He is not an oilfield engineer but many of his Thursday night partying buddies are. And I know what they are telling him.) Yes, I fully realize I am staking my reputation on what I am saying about Saudi Arabia. That is just how strongly I feel about it.

I believe, with every fiber of my being, that Saudi Arabian reserves are grossely over estimated. I believe the same thing about all Middle Eastern reserves. Therein lies the greatest danger of all. Wall Street believes those estimates, the Government believes those estimates, Yergin and CERA believes those estimates and many peak oilers on this list seem to believe those estimates. It is faith in those numbers that is inhibiting governments and markets from taking any action concerning the coming oil crisis. And you wish, Robert, that I should soft-peddle this problem? I say I will not! And if you insist that I take my concerns elsewhere because you and the other editors believe that I am shouting fire in a crowded theater then so be it. Just say so and I will be gone.

Ron Patterson

THe strongest evidence that sa has peaked is that production declined throughout the year even as the number of rigs has increased.

This combination of events does remind one of what happened in texas when the rrc allowed full production... as wt often reminds us.  Everything is quite consistent with texan history... sa announces confidently their program to increase production, more rigs begin to drill, production declines.

Maybe sa has not peaked, nevertheless the evidence to date indicates they may well have done so.  TOday they are cutting production to shore up prices... given this, how long should we give them to demonstrate that they can, indeed, increase production past 10M/d? Two years? 10?

Looking at this another way, at what price would you say the absence of sa production above 10M/d strongly suggests sa cannot produce at such a level? $80/b? $100/b? $200/b?