[FoRK] Malthusiasm II: Hubbert's Peak meme picking up steam
jbone at place.org
jbone at place.org
Wed Feb 25 17:28:06 PST 2004
Geege posted a link about this a week or so ago; I think I've
mentioned it once or twice (once today, I know) --- and now this in
from the NYT, via John Robb's blog:
Economy: The looming oil crunch
The NYTimes  has an interesting report (anticipated by this blog)
on Saudi oil fields:
Energy forecasts call for Saudi Arabia to almost double its output in
the next decade and after. Oil executives and government officials in
the United States and Saudi Arabia, however, say capacity will probably
stall near current levels, potentially creating a significant gap in
the global energy supply.
This is in line with Hubbert's peak -- an analytical technique that has
proven to be extremely accurate at predicting the peak of oil
production. The analysis predicted the peak of US oil production in
1972 and the peak of global production in 2003.
The idea behind the analysis is that while vast new resevoirs of oil
have been found, that oil is very expensive to extract. Additionally,
the easy to extract oil, that is being pumped at the current price, is
depleting at at ever increasing rate:
The average decline rate in Saudi Aramco's mature fields — Ghawar and a
few others — "is in the range of 8 percent per year," without
additional remediation, according to the company's statement. This
means several hundred thousand barrels of daily oil production would
have to be added every year just to make up for the diminished output.
As the price of oil increases, it makes the newly discovered fields
economical. However, the amount of new oil production at a higher
price will not make up for the loss of production at mature fields.
The result in aggregate is a fall in production. The US hit this peak
in 1972 and its oil production has fallen every year since. The world
hit it in 2003. Here's an example of this dynamic:
To offset its declines, Saudi Aramco is bringing back into production
one idle field, Qatif, and is enhancing production at a nearby offshore
field, Abu Safah. The company says that with expert management, these
fields will produce about 800,000 barrels a day. But current and
former Saudi Aramco executives question those expectations, contending
that the goal of 500,000 barrels a day for Qatif is unrealistic and
that development costs are higher than anticipated. Qatif poses real
difficulties. It is near housing for Saudi Arabia's minority Shiite
population and contains high concentrations of hydrogen sulfide, a
highly toxic gas. Its development is "particularly challenging,"
according to a technical paper by Saudi Aramco engineers presented last
year in Bahrain, which said that 45 percent of potential drilling sites
"were rejected due to safety concerns."
The problem we all face is that global demand for oil is climbing at an
accelerated clip (with new requirements coming from rapid development
in China and India) at the very point that global oil production is
starting its inexorable decline. The economic and social problems this
will cause are going to require some of the best diplomacy we have ever
This decline in production, and the higher prices that result, will
create increasing demand for alternative energy sources. For exampe:
Bill Gross is on the right track.
It does point to an alternative reason to take Iraq: to eliminate the
political impediments to full Iraqi oil production.
Developing countries like China are incredibly inefficient in their use
of oil, so the impact of this crunch will be felt faster there.
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