World Energy Crisis Related News

Twilight in the Desert
The Coming Saudi Oil Shock and the World Economy,
by Matthew Simmons

Do you think that Saudi Arabia can open a few valves or drill a few more wells to provide more oil? This book will disabuse you of that notion. The Saudi government has repeatedly assured the world that it has huge reserves and that oil exports can be easily increased. Simmons disputes this. According to Simmons, Saudi Arabia finds it increasingly difficult to produce oil at the present rate, let alone increasing production to satisfy increasing demand.

The Society of Petroleum Engineers (SPE) has 64,000 members from 115 countries. SPE technical papers are available online at http://www.spe.org These papers are peer-reviewed and meet high scientific standards. Twilight in the Desert is based on Simmon's reading of 200 plus SPE papers published between 1961 to 2004. Many of the papers were written by Saudi engineers.

Simmons has an MBA from Harvard but he seems to know oil geology as well as an oil geologist. He founded Simmons Company International http://www.simmonsco-intl.com/ Go to "Simmons News" to read what he said March 2003 when he testified before the Senate Committee on Energy and Natural Resources. Simmons was also an advisor to Vice President Cheney’s Energy Task Force in 2001.

The publisher of Twilight in the Desert is John Wiley & sons http://www.wiley.com/WileyCDA/ which was founded in 1807. As of June 2005, Amazon ranks this book #38 in sales.

Here is a summary of the book beginning with facts and numbers and a little oil geology. The world consumes about 80 million barrels of oil each day and Saudi Arabia supplies nearly 10 million of that. Just one oil field, Ghawar, produces 4.5 million and it has been a major producer for more than a half century. Just three other fields, Abqaiq, Safaniya and Berri supplies most of the rest. It is impossible to overstate the importance of Ghawar.

Oil in an oil field reservoir is under pressure. As the oil field produces oil, the pressure gradually decreases. When the pressure is released, dissolved gas bubbles out of the oil. The same thing happens when you open a soft drink or can of beer. The pressure at which the oil bubbles is called the bubble point and it can not be allowed to happen. The gas forces oil away from the wellhead and stops the flow of oil. The effect is permanent. It is a consequence of trying to produce oil too fast.

It is possible to maintain reservoir pressure by pumping gas into the reservoir or by pumping water beneath it or around the periphery. The oil produced in this way is usually mixed with water. GOSPs (gas oil separators) must be used. Their capacity can limit production if the water content gets too high. When the water "cut" gets too high, the well becomes uneconomic and it must be shut down. A high water cut is also indication that the well is producing too fast. It can also mean that the reservoir is being damaged.

The US government became aware of these problems in Senate subcommittee closed door hearings in 1974. Senators grilled oil company executives who then controlled Saudi oil production. They admitted that they consistently underestimated world oil demand. The senators also accused the oil companies of over producing oil before turning the responsibilities of oil production over to the Saudis. The executive's motives were profits. The senators feared that the damaged oil fields would not be sufficient to supply world oil needs back in 1974!

The content of the hearings were made public in 1974 but it never made the news. The watergate hearings were underway at the time.

When the Saudis took control of the oil fields the first order of business was to look for more oil fields. They knew they had to reduce the production of Abqaiq, Safaniya, Berri and especially Ghawar to avoid damaging them. The most advanced technology available was used for the search. The Saudis did not find much.

The Saudis claim to have 260 billion barrels of oil reserves. You can find this number in many places including the BP Statistical Review and this website. The Saudis claim they will be able to produce 15 or 20 or even 25 million barrels per day. These are widely accepted numbers but they are apparently not true.

The Saudis are pressed by a $170 billion dollar debt and an exploding population. (The average Saudi woman has 6.7 children.) The Saudis were forced to depend on their old oil fields. They did this with horizontal drilling. It is possible to drill many holes through a reservoir without moving the drilling rig. The drill bit can be steered to stay below the gas cap and above the water. This is advanced technology that can keep an oil field producing at a high rate. But it does not increase the amount of oil produced ultimately. This is a key point.

The SPE papers show that the Saudis were producing oil at rates that risked damaging their oil reservoirs in the 70s and that is true today as well. The Saudi claim of vast reserves is apparently not true or they wouldn't exploit their old fields to the extent that they do.

Simmons explains why he wrote this book. He notes that Saudis themselves are either lying or in serious denial about their own oil fields. He notes that for years the rest of the oil industry has lazily taken Saudi assurances at face value instead of investigating them closely. He pleads for detailed field-by-field reports, test-well analyses, and exploration results that would convince everyone they're telling the truth?

Posted January 2005

Civilization as we know it is coming to an end soon. This is not the wacky proclamation of a doomsday cult, apocalypse bible prophecy sect, or conspiracy theory society. Rather, it is the scientific conclusion of the best paid, most widely respected geologists, physicists, and investment bankers in the world. These are rational, professional, conservative individuals who are absolutely terrified by a phenomenon known as global “Peak Oil.”

The ramifications of Peak Oil are so serious, one of George W. Bush’s energy advisors, billionaire investment banker Matthew Simmons, has acknowledged, “The situation is desperate. This is the world’s biggest serious question,” while comparing the crisis to the perfect storm: “If you read The Perfect Storm, where a freak storm materializes out of the convergence of three weather systems, our energy crisis results from the same phenomenon.”

In May 2001, George W. Bush himself went on the record as saying, “What people need to hear loud and clear is that we’re running out of energy in America.” In October 2003, Bush’s nemesis Michael Moore released the book, Dude, Where’s My Country? Chapter three of the book, “Oil’s Well that Ends Well,” was dedicated to the coming post-oil die-off.

If you’re like 99 percent of the people reading this letter, you had never heard of the term “Peak Oil” until today. I had not heard of the term until a year ago. Since learning about Peak Oil, I’ve had my view of the world, and basic assumptions about my own individual future, turned completely upside down.

A little about myself: In November 2003, I was a 25-year-old law school graduate who found out he had just passed the California Bar Exam. I was excited about a potentially long and prosperous career in the legal profession, getting married, having kids, contributing to my community, and living the “American Dream.” Since learning about Peak Oil, those dreams have been radically altered.

I must warn you, the information contained in this book is not for the faint of heart or the easily disturbed. Whether you’re 25 or 75, an attorney or an auto mechanic, what you are about to read will likely shake the foundations of your life.

Posted December 2004

Oil: Anatomy of an Industry, by Matthew Yeomans. Freelance journalist Yeomans deftly traces the history of oil in America. He then shows that American consumer culture has led to an addiction to oil--an addiction which makes oil America's Achilles' heel. He points out that American diplomacy and the war in Iraq are mostly about oil.

The second half of his book describes a solution to the energy dependence problem. He suggests that the government fund research to develop energy efficient vehicles. He also suggests that hydrogen is part of the future. Planetforlife points out that hydrogen is not an energy source and that it is not an optimal energy carrier. Despite this disagreement, Planetforlife recommends this book.

Posted September 2004

The September issue of National Geographic is devoted largely to Global Warming. Here is a quote from the editor;

"After a decade as Editor in Chief, I have a pretty good idea which articles will provoke a lot of angry letters. Whenever we publish stories that challenge widely held beliefs, some readers get mad, and they write to let us know.

Well, we're about to do it again. We're devoting 74 pages of this issue to a three-part series of stories on global climate change, and I'd be willing to bet that we'll get letters from readers who don't believe global climate change is real, and that humans contribute to the problem. Some readers will even terminate their memberships.

Why would I publish articles that make people angry enough to stop subscribing? That's easy. These three stories cover subjects that are too important to ignore. From Antarctica to Alaska to Bangladesh, a global warming trend is altering habitats, with devastating ecological and economic effects.

So I'm asking you--even those of you who don't believe the Earth is getting warmer and that human behavior is a contributing fact--to turn to page 2. This isn't science fiction or a Hollywood movie. We're not going to show you waves swamping the Stature of Liberty. But we are going to show you the hard truth as scientists see it. I can live with some canceled memberships. I'd have a harder time looking at myself in the mirror if I didn't bring you the biggest story in geography today."
http://magma.nationalgeographic.com/ngm/0409/index.html

Red Sky at Morning. This book will change the way we understand the future of our planet. It is both alarming and hopeful. James Gustave Speth, renowned as a visionary environmentalist leader, warns that in spite of all the international negotiations and agreements of the past two decades, efforts to protect Earth’s environment are not succeeding.
http://www.redskyatmorning.com/

Oil, Jihad & Destiny (Will declining oil production plunge the planet into a Depression?) by Ronald R. Cooke. This book does not shy away from answering the difficult questions. Cooke describes the effect of Islamic fundamentalism on world oil production, for example. He has taken a careful look at the future and his conclusions are not colored by wishful thinking. It may be soothing to hear a "new energy source will be found" or "we can have energy independence" but Cooke clearly explains the barriers to energy self-sufficiency. On the other hand, he details a number of practical steps we can take to avoid the chaos of oil depletion. Oil, Jihad and Destiny ends with a challenge. Will we respond in time? A description of this book may be found at www.futurereality.org Oil, Jihad and Destiny may be purchased through www.booksurge.com or www.amazon.com

Posted July 2004

The Club of Rome commissioned the Massachusetts Institute of Technology (MIT) to perform several studies beginning in 1968. The questions posed include Are current policies leading to a sustainable future or to a collapse? and What can be done to create a human economy that provides sufficiently for all? The results of the study were summarized in a widely read book called Limits to Growth which is still in print. In 2004, the same authors published Limits to Growth The 30--Year Update. Learn more about the Club of Rome: http://www.clubofrome.org/archive/reports.php

Stanford biologist Paul Ehrlich published The Population Bomb in 1968--which is still in print. The Population Bomb was widely read and the subject of controversy. Paul and Anne Ehrlich are coauthors of One with Nineveh published in 2004. One with Nineveh is in many ways the sequel to The Population Bomb.

These books deal with the big question of human overpopulation. Both books are primarily about science. They are not speculative or political. Yet, these books have been greeted by derision and hostility. These critics, it turns out, are from the far right. Hermann Kahn, founder of the Hudson Institute, is an example. Julian Simon, an economist and a fellow of the Cato Institute, is another example. In 1984 Kahn and Simon coauthored The Resourceful Earth wherein they asserted that:

Simon and Kahn are not mere critics--they influence the public and policy makers. Simon was one of the architects of the Reagan administration economics policy. Both assert that there are no limits to growth and economic well being. This assertion has a certain appeal but it has no scientific basis.

If you think that Simon and Kahn might be correct, consider this: Human population grows exponentially in the absence of famine, disease, warfare, etc. If you don't know what exponential growth means, just remember that growth gets faster as time passes. Now consider that the Earth is finite. It follows that something will limit human population. It might be fossil fuel. It might be clean water or farm land. There is abundant evidence that limits are being approached.

Nature has provided scientists with many examples of what happens when something limits growth. The reindeer on St Matthew Island provide an example. When the reindeer were introduced to St. Matthew Island, their numbers grew exponentially until a limit (food) was reached. Then the population collapsed from 6000 to 4. The number of humans grows exponentially and someday we will encounter a limit. Unlike reindeer, humans can anticipate problems. Humans and reindeer are equally bound by nature's laws. If you can refute this argument, please contact me.

We humans will want to practice population control before we encounter a limit.

Learn more about the St. Matthew reindeer here:

http://www.gi.alaska.edu/ScienceForum/ASF16/1672.html

Planetforlife deals with the energy problem which is only a part of the human overpopulation problem.

Posted June 2004

The June issue of National Geographic has an article whose full title is: "Think gas is expensive now? Just wait. You've heard it before, but this time it's for real: We're at the beginning of the end of Cheap Oil."

Posted May 2004

Colin Campbell and the Uppsala Hydrocarbon Depletion Study Group has now made the 2004 upgrade of the peak oil model. The peak is moved from 2010 to 2008
http://www.peakoil.net/

Seppo Korpela is a professor at Ohio State engineering school. See the links and articles related to a Looming World Oil Crisis. His paper, Oil Depletion in the United States and the World, is a very good 27 page summary of the problem. It was presented to the Ohio Petroleum Marketer's Association.
http://rclsgi.eng.ohio-state.edu/~korpela/