OIL (when this troublesome liquid will run out) chapter 4 / 5

chapter IV
Oil is now being consumed four times faster than it is being discovered, and the situation is becoming critical.



ARAMCO OIL COMPLEX

 The consumption of a finite resource is simply a finite venture and the faster we use the quicker it peaks. Saudi Arabia is a major oil producer with 73% of all incremental world demand being met by this country. The worrying fact is that 90% of their production comes from only 5 mega fields (one is the Ghawar field which is the biggest ever discovered), and are all at risk of unplanned production collapse. In 2004 there were warning signs of production falling into depletion. For years, Aramco, the Saudi national company, use secondary recovery techniques by injecting enormous amounts of seawater (7 million barrels daily) into their biggest field to boost production. These methods have only temporary effects, and lead to accelerated rates of depletion in the future.

 
An imminent peak and sharp decline in oil production could cause a worldwide recession." U.S. GAO –2007

By 2012, surplus oil production capacity could entirely disappear..…" U.S. Department of Defense –2008 & 2010.

Between 2005 and 2008 conventional oil production ceased to grow, ..…" Global Witness Foundation –2009

A global peak is inevitable. The timing is uncertain, but the window is rapidly narrowing." UK Energy Research Centre -2009

The next five years will see us face … the oil crunch." UK Industry Taskforce on Peak Oil and Energy Security –2009

While there is no agreement yet on the exact date that world oil production will peak, the degree of consensus among them is quite remarkable. Out of 21 studies, the statistical mean date is 2013 (excluding some of the biased oil company estimates), suggesting that the world may be facing shortfalls much sooner than expected.

Recently, CNN and Britain’s Independent also point out the reality of Peak Oil, acknowledging that world oil and gas reserves are as much as 80% less than predicted.

At a current average global consumption growth rate of 2% annually (1995-2005), by 2025 the world will need 50% more oil (120 mbd), and the International Energy Agency (IEA) admits that Saudi will have to double oil production to achieve this. And that's not even taking into account that 80% of the world is only just starting to use oil & gas



SAUDI oil pipes

 Based on Simmon’s analysis, sudden and sharp oil production declines could happen at any time. Even under the most optimistic scenario, Saudi Arabia may be able to maintain current rates of production for several years, but will not be able to increase production enough to meet the expected increase in world demand. There is no likely scenario that some new frontier can replace Middle East oil declines.

Senior Saudi energy officials have privately warned US and European counterparts that Opec would have an “extremely difficult time” meeting demand. Saudi Arabia calculates there is a 4.5m b/d gap between what the world needs and what the kingdom can provide. Repeated promises for increases in production have consistently failed to materialize.
CHAPTER 5