Saudi Oil Minister al-Husseini says wikileaks quoted him out of context.
Wikileaks effectively says that the oil minister said that the Kingdom does not have the estimated reserves bandied about and thus the oil reserves are overstated by 40%.
In fact, what he was alluding to was that in 2007 Saudi State Oil Company Aramco said that their reserves were 716 billion barrels which would on current technology trends rise to 900 billion barrels recoverable in 20 years time (2027).
The denial wikileaks alleged meant that the 716 billion barrels were false.
In fact, al-Husseini goes on record to say that the 716 billion barrels reserves are almost certainly correct whereas he was skeptical about the 900 billion barrels.
The full story is here: http://www.rigzone.com/news/article.asp?a_id=103987&hmpn=1
Make up your own minds
7 comments:
The Saudis lie about their production rates a;ll the time.
In 2000, they were bragging that they dramatically increase production to prevent another oil price spike. they promised steady growth in oil production.
In fact they spent many billions of dollars to drill new rigs and step their horizontal drilling and saltwater injection systems.
While they were bringing these systems online, their existing infrastructure saw a very significant drop in production, leading to oil price spikes and subsequently a gasoline price spike that didn't significant damage to our economy.
It took the Saudis three years and many billions of dollars to get production back up to 2000 levels.
The Bush administration did a good job in blaming the market crash in May 2001 that came after the pricing crisis, on the attacks that occurred later in September. the media took up the meme. Because future events, change our past, right? Well actually, people have short memories.
If the Saudis weren't lying braggarts, and they had been telling the truth, their current production would be 30% to 40% higher than it actually is.
In this day age we place more value on what people say, than what they are doing. The Saudis say a lot of conflicting things, and these words mean more for most people, than their actual production rates and their costs of production.
Sorry for the late comment.
I would personally take the wiki leaks ”leaks” with a bit of salt, since Saudi-Arabia is (as far as I know) working on bringing a new (though smaller than the original) oil sites online. Then there are the Russian plans of searching for oil in the arctic reaches (which are also British in a way, since BP have joined the Russians in this undertaking)
On the Russian subject I remember a number of “revelations” made by a Russian oil executive, who made headlines throughout the world in 2007 (I think) when he stated that Russia would become an increasingly unreliable oil-producer, since its reserves had peaked at the time and went into decline.
Since then Russia has managed to reverse the trend and managed to increase production a year or so ago (I wish I could supply you with the sources, but hours of searching proved to be fruitless. I do remember that I first read about all these things, including production increases, on the BBC)
Also, let’s not forget that the Russians are moving into the unexplored eastern parts of Siberia, with the intention of expanding their oil and gas industry.
I wonder what the future will bring once the adaption decades have passed.
Ps: about inflation and punctual recessions, such a thing would not be a major change in the western world, since we tend to have a recession once every decade or so :D
I also hope my spelling isless horrible this time ;)
Weasel, that sounds more like conspiracy theory than reality to me.
Any case we'll see.
Rather than quote the same old tired stuff you can read on any doomer board why don't you take a bet?
I bet you $20 in todays money that we DON'T see a global collapse of industrial civilization caused by peak oil before 2020.
Will you take that bet?
Anon,
Thanks for your comment. I agree 100%. We've been tending to count the Russians out but in all likelihood there are at least a couple if not more bakkens in Russia as well as oil sands.
Any case, I'm pretty sure that the Deutsche bank scenario is fairly close to the mark so that by 2020 we are seeing significant demand destruction (which balances out any declines) caused by electrification.
Something I just remembered; There is something that most doomers tend to forget when it comes to the saudi-arabian (and OPEC) ability to increase production. Back in late 2007 when Oil prices were storming though the roof, western governments pressured OPEC to increase production but they hesitated, saying prices were not in line with fundamentals.
After a while western pressure only grew (I even remember something about the British PM threatening to restore the “villain” status of OPEC in the UK from the 70tes unless they did something to ease the oil-prices.
Ultimately OPEC bowed to the pressure and increased oil production (this was sometime in 2008).
The increase however disappointed speculators (who were already worried that OPEC reluctance was a sign that it simply couldn’t raise production at all) and only caused them to push prices higher.
Then a few months later, the busting of the housing-bubble and the resulting credit crisis spread from the US to the rest of the western world and within a very short time oil prices crashed completely. The declining prices struck OPEC hard, and ultimately they decided to cut back on production in an effort to prevent a full price collapse. That cut remains in effect today.
What is interesting is that OPEC was right that the former prices were not in line with supply and demand fundamentals, since the prices almost collapsed right when the recession struck, much faster than demand would have been able to decline.
In turn, prices bordered on 2007 lines immediately after signs of recovery started to appear, only to fall again when optimism retreated.
My point here is, that current OPEC reluctance to increase production is well justified, since they burnt their fingers the last time they didn’t trust their own judgment.
It is also interesting that the current Saudi oil-minister has been wrong in his past skeptical predictions.
Anon,
Agreed. The funny thing is that the whole doomer camp rests on a handful of false assumptions. The first is that reserves cannot grow and thus the oil producers must be lying. That rests on a fundamental misunderstanding (surprise!) of what reserves actually are and a complete put-the-head-in-the-sand when shown "currently-non-economic-resources". The other part is to say that economics is bullshit and that they, the superior scientists have access to the only hard science and that economics is gibberish like psychology. That economics isn't 100% as hard as e.g. physics in no way invalidates that it has some predictive ability. That our money is worthless paper which can be theoretically printed in unlimited quantities in no way changes the fact that with extra expenditure we can convert more of the resource to reserves. That with extra expenditure we can create better, more efficient technology that INCREASES our ability to extract energy.
Also: a fundamental and deliberate misunderstanding of the doomers is to attempt to shoehorn the concept of EROEI onto ALL energy as if we have declining energy sources across the board. We do not. There is SOME evidence (and only some) that the return on energy invested to get each barrel of oil out is diminishing. That's only a problem if we're relying ONLY on oil or on static or declining EROEI energy inputs. We are not. The EROEI of other non fossil fuel based inputs such as windmills and solar panels is INCREASING and even if it were static, since they are energy producing infrastructure rather than a limited resource which is burned up to produce energy like oil, we get continued and multiplying use of them as time goes on. In short the doomers are attempting to pull wool over the eyes of the uneducated.
As far as I know, the "kings" of the "return on energy invested to get each barrel of oil out is diminishing" argument are the old oil-wells, the new "harder to get" sources and oil-sands :)
What the doomers fail to understand is that though we use more energy on these areas now, there is no reason to assume that technology won’t reverse that (like it has in the past)
Often they (doomers) make it sound like the decline of our returns from extractions is a continuous development, which it is not.
Oil-sands for instance require more energy for extraction, but are still worth the effort since it doesn’t require more energy for every single output (something doomers would want us to believe):)
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