<RFK and Garbage Trucks: Two Measures of Success The Oil Drum Coal To Liquids In Australia>
<DrumBeat: April 12, 2008 DrumBeat DrumBeat: April 14, 2008>

127 comments on DrumBeat: April 13, 2008

Comments can no longer be added to this story.

Show without comments | PDF version

westexas on April 13, 2008 - 9:59am Permalink | Subthread | Parent | Comments top

Of course, we are getting decidedly mixed messages from the Saudis. The oil minister is talked about proven + probable + possible of hundreds and hundreds of billions of barrels, approaching a trillion.

In any case, the data are not yet conclusive, but we can say that the successor swing producer, Saudi Arabia, is showing the same post-peak characteristics as the prior swing producer, Texas, at about the same stage of depletion (based on HL), to-wit:

Higher Oil Prices + Increased Drilling = Lower Oil Production

Comments can no longer be added to this story.
xeroid on April 13, 2008 - 10:22am Permalink | Subthread | Parent | Comments top

leave it in the ground, with grace from god, our children need it

At least the Saudi King is being honest at last - it's not like it isn't obvious stuff - without oil the Saudis literally die, so it's not like we on TOD didn't expect this.

Drip, drip, drip! When, if ever, will MSM get the message?

Comments can no longer be added to this story.
pedestrian on April 13, 2008 - 11:50am Permalink | Subthread | Parent | Comments top

The King appears to be saying that he doesn't buy into significant reserve growth for his country, that future high prices won't have the effect of creating additional reserves. In other words, he appears to be skeptical of the theory (unproven, of course) that the world economy and the future well-being of billions now rely upon. From a mainstream economist's perspective, the King is truly radical.

Related to this is that he seems to be suggesting Saudis won't be raising production. Ever.

Comments can no longer be added to this story.
toilforoil on April 13, 2008 - 2:41pm Permalink | Subthread | Parent | Comments top

Very good observation, Pedestrian. I wonder if, as well, his most excellent majesty hasn't recognized that the longstanding line that market forces are keeping several million bpd of production offline is beginning to look like the shallow lie that it is in the face of relentlessly increasing oil prices.

Shifting the narrative from exaggeration about reserves and distortions about adequately supplied markets and large inventories (essentially all new demand is coming from countries like China with no known inventories), to concerns about the well-being of future generations of Saudis, improves the credibility of the 'managed' production scenario. The king probably considers this to be a superior 'information' strategy in the face of arguments from regime opponents that the kingdom's primary resource is being frittered away.

Comments can no longer be added to this story.
Robert Marston on April 13, 2008 - 9:52pm Permalink | Subthread | Parent | Comments top

It's all propaganda and not very good propaganda at that. Either the Saudis are willfully holding oil off the market to make a killing -- short term gain for long term disaster -- or they are just attempting to obfuscate the fact that they can't substantially increase production.

I hate reading these statements. They aren't even comforting lies. What the Saudis have failed to understand is that a good lie holds in it at least a part of the truth. This stuff here is just mumbo-jumbo -- with added mumbling for effect.

Comments can no longer be added to this story.
ace on April 13, 2008 - 7:26pm Permalink | Subthread | Parent | Comments top

I thought that the King's statement about leaving the oil in the ground for the children was very smart. If Saudi oil production later this year is below 9 mbd then the King can simply say "we are saving some oil for our children".

Here is a chart from Zagar's ASPO 2005 presentation which shows some static fields in green which could be saved for the children.

Saudi Arabia Discoveries OIIP - click to enlarge
source
Saudi Arabia Can It Deliver?
Jack Zagar, MHA Petroleum Consultants
ASPO Conference - Lisbon, Portugal, May 19-20, 2005
http://www.cge.uevora.pt/aspo2005/abscom/ASPO2005_Zagar.ppt

The static green fields may be small in size and harder to develop than large fields but could be significant. The 65 static fields contain about 17% of OIIP of about 100 Gb. Assuming a conservative recovery factor of 30% this gives 30 Gb URR in total. The average URR per field would be just over 0.45 Gb.

Assuming that the King's statement is a warning that Saudi's oil production is now in slow decline, or at best on a 9 mbd C&C plateau, then I have no doubt that the world's crude oil and lease condensate production is now in irreversible decline as shown below.

click to enlarge
Please note that the chart above includes Alberta tar sands production but excludes biofuels, natural gas liquids and refinery processing gains.
For more info please see http://www.theoildrum.com/node/3623
and http://www.theoildrum.com/node/3665

Comments can no longer be added to this story.
JoulesBurn on April 13, 2008 - 9:53pm Permalink | Subthread | Parent | Comments top

One thing that's interesting when looking at the Saudi Discoveries plot is that of all the fields discovered since 1970 or so, they chose to develop the Hawtah fields -- and they have proved to be problematic. And they didn't stumble across them, either. They looked real hard, and then were very excited (and boastful) when they found them. Why develop those, and not the others (especially those which are larger)? The super light API oil? I don't think that they were inspired by JFK* and did it just "because it was hard". Rather, the others were less attractive for some reason. Go after the easy oil first, and wait for later technology improvements to make getting the harder oil out less costly.

*from his Moon Speech

Comments can no longer be added to this story.
ace on April 14, 2008 - 4:34am Permalink | Subthread | Parent | Comments top

I suppose the Hawtah fields, at the bottom left of the chart below, were the easiest to develop compared to the other discoveries made since about 1970. Many of the other discovered fields in the 1970s appear to be located in the upper left corner of the chart below. These fields might also contain heavier oil and lack infrastructure.

click to enlarge

Comments can no longer be added to this story.
creg on April 13, 2008 - 11:34pm Permalink | Subthread | Parent | Comments top

excellent chart! thanks ace!

Comments can no longer be added to this story.
clifman on April 15, 2008 - 8:28am Permalink | Subthread | Parent | Comments top

Given the attitude exhibited in the top article, even when inklings do occur to the MSM, their stake in BAU will, shall we say, color their interpretation. What begins as a bashing of ASPO shifts into some recognition of the problem: the liquids that can pass for “oil” cannot grow fast enough in a business-as-usual case. But I find this paragraph to be disgustingly arrogant (emphasis added):

Even if oil does peak and demand remains positive, the effects might not be all that bad. Alternatives would begin to come on strong, as market forces, while lagging, would nevertheless kick in with surprising speed. Sure, we might have to get used to “stagflation” again for awhile. And if energy prices go through the roof, and gasoline costs $12 a gallon, that will still be OK to those of us who can afford it. Plus, it will have the highly desirable side effect of keeping the Third World in their...well, let’s just say in third place. (After all, if everybody gets rich enough to buy a car, who will make my $80 tennis shoes for $1 in labor?)

Comments can no longer be added to this story.

127 comments on DrumBeat: April 13, 2008

Comments can no longer be added to this story.

Show without comments | PDF version