The New York Times reports today that a secret intelligence document is now casting doubt on Saudi Arabia’s long-standing assurances that it can substantially increase oil production to meet soaring world demand. Saudi Arabia is the only country left in the world with any spare production capacity.
Saudi Arabia’s oil reserve data is an official state secret; the state oil company publishes numbers, but without any independent verification of their validity.
The Times story also quotes Edward O. Price, the former head of exploration for Saudi Aramco, who has questioned Saudi Arabia’s claims to have increased its proven resources by 150 billion barrels in 2004. Twenty years ago, a detailed study by the four American oil companies then in partnership with Aramco concluded that there was very little undiscovered oil in the country.
Price met last year with Nansen Saleri, a senior Aramco executive, who told him that the estimates were based on a 2000 United States Geological Survey report—a report which Price said totally lacks credibility and was not based on detailed field work, as the old Aramco studies were.
In other words, Saudi Arabia is promising the United States that it will meet soaring world oil demand based on estimates conducted by a U.S.G.S. survey that is not based on field work and is viewed as unreliable by the former head of what is now the state-owned oil company. Furthermore, the U.S.G.S. survey estimated an additional 87 billion barrels, not 150; the Times article does not explain where the additional 63 billion barrels were supposed to come from.
None of this will surprise those who have been following the peak oil debate—especially anyone who has read Mathew Simmons’ Twilight in the Desert. Simmons, a well-respected energy investment banker, spent two years studying 200 published technical papers on Saudi Arabian oilfields and concluded that there is no way Saudi reserve claims can be accurate. Simmons also debunks the notion that Saudi Arabia is “underexplored”.
The Times article is welcome in that it casts further doubt on Saudi claims, which are often taken at face value. The writer buries his lede, however, and muddles his reporting, providing irrelevant context and never addressing the true significance of significantly lower Saudi reserves. Thus, the average reader is unlike to grasp the true import of inaccurate Saudi data.
The fact is that Saudi Arabia may not even be able to maintain even its current production for long, much less expand it; and if Saudi Arabian production begins to decline, it will mean that world oil production is declining, and history will have entered an entirely different era.
I strictly recommend not to hold off until you earn enough cash to order different goods! You can take the personal loans or short term loan and feel yourself fine
Posted by: Rodgers31Jimmie | July 19, 2011 at 04:13 PM