Published on Tuesday, October 4, 2005 by ASPO-USA
Sadad al Husseini sees peak in 2015
By Steve Andrews
Sadad al Husseini, recently retired head of exploration and production for Saudi Aramco, offered very insightful comments during an interview with Peter Maass in Saudi Arabia. Maass reported Husseini’s perspective in his August 21, 2005 piece “The Breaking Point” (posted under “Articles” on this site) in the New York Times Magazine . In a follow-up email exchange with ASPO-USA’s Steve Andrews, Husseini said he would be unable to attend and present at the November 10-11 Denver peak oil conference, but he did offer pointed commentary about peak oil production. While his comments are more optimistic than those of Colin Campbell, Matt Simmons, Chris Skrebowski and a host of others, they certainly strike a vastly more realistic chord than the typical fare from Saudi Aramco press releases and presentations.
Q: My question to you, and I would like to share your answer with attendees at the conference as well as with our state’s Energy Office here in Colorado: Do you have an approximate range when you estimate that world oil production might peak? Given that you won’t be able to join us [at the November 10-11 Denver peak oil conference], your comments on this point would be tremendously appreciated.
A. Thank you for your e-mail. In response to your question, the answer is a little long winded but this is an important matter that needs a clear response.
Oil capacity today is not production limited but rather processing limited. That is to say, the DOE reports the world's refining capacity has leveled at around 83 mmbd for some time and refinery expansions are slow and costly. We have seen new downstream capacity investments average 300 mbd/year over the last several years. Doubling that rate would still put major changes in refinery expansions well into 2010 and beyond. Therefore the refinery capacities are now the effective ceiling for oil production.
The DOE shows oil demand (presumably after refining) is increasing at something like 1.5 - 2.0 % per year. This was doable in the past because of the excess refinery capacity that prevailed until 2003/2004. From here forward, satisfying oil demand will require 1.2 - 1.6 mmbd of new refinery capacity per year or 4 to 5 new world-scale refineries every year. These normally require 4 - 5 years to execute at a cost of no less than $ 2 B per 100,000 b/d of capacity. With deep conversion and petrochemicals, the investments are even higher.
Because of these massive requirements, I believe the production outlook will be gradual production increases over the next ten years limited by slow refining capacity expansions.
Given the current outlook in terms of global exploration and development, the rate of investments in the oil value chain, energy prices, and the prevailing legal and political investment climate, I believe oil production will level off at around the 90 - 95 mmbd by 2015. This plateau can be sustained beyond 2020 at continuously higher oil prices and with rapid improvements in overall energy efficiencies throughout the world.
A rapid global refinery expansion program that eventually matches an increasing oil demand rate of 1.5 - 2.0% per year cannot be achieved before 2015 at the earliest and is highly improbable in any case.
Therefore my answer is: under the current circumstances and outlook, oil is likely to peak at a 95 mmbd plateau by 2015 and can then be sustained well beyond 2020 at increasing real oil prices.
Best wishes with your conference and I hope to read more about it in the forthcoming weeks.
Article found at :
http://www.energybulletin.net/newswire.php?id=9498
Original article :
seahorse2 wrote:Peak refinery has been confirmed by the Saudis. It seems that no one except me accepts that Peak Refinery means Peak Oil right now. I've asked Lynch on the Lynch forum to comment on this, he has not. Peak Refinery, if true, means world economic growth stops, bc no more refined product comes on line to meet growth. Here's the article, also posted on this site under news.
ha ha that's a good one. I don't think so. Just about every public opinion poll out there shows the majority of Americans blame the oil companies for this current mess. The average Joe-Sixpack is clueless about PO.retiredguy wrote:.............
My prediction: The US government will underwrite the construction of any/all new refineries in the US. Similar incentive to that given the nuclear industry in the new energy bill. The American public will assume the financial risk.
USA TodayRoad to recovery sinking into Gulf Updated 7/18/2006 12:25 AM ET By Elliot Blair Smith, USA TODAY
LEEVILLE, La. — Gravestones trail into the water along Louisiana State Highway 1 within view of the mechanical-lift bridge that rises lazily above Bayou Lafourche to allow shrimp boats and tugs to pass.
The road and bayou curl together from local shipyards to deep-water oil platforms in the Gulf of Mexico, known as "the blue-collar coast."
This is the intersection of a fading Cajun dream, where French-speaking immigrants once fished and farmed sugarcane and cotton, and the jarring new reality that has transformed a deteriorating two-lane highway into an energy artery that carries crude oil and natural gas from the Gulf to the rest of the USA.
Nowhere in Louisiana are the nation's needs and the local population's desires so closely aligned as on the crumbling asphalt ribbon that reaches to Port Fourchon at the state's southern tip. Fourchon supply boats serve the giant Louisiana Offshore Oil Port, 18 miles into the Gulf, which offloads crude oil supplies from foreign tankers, and 75% of all deep-water Gulf oil and gas drilling.
Last year, Hurricane Katrina temporarily shut down most Gulf production and forced the evacuation of the peninsular strip of land that LA-1 traverses, laying bare the nation's dependence on a remote road that connects 16% of all U.S. oil supplies to 50% of the USA's refining capacity. Stranded energy supplies sent consumer prices soaring. The aftershocks rattle markets even now, amid a new hurricane season.
pedalling_faster wrote:in 50 years it might be a skin-diving location.
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