Saudi Arabia isn't Texas

[TheDude]

We now have more data, so I think we can learn a lot by going back, looking at forecasts, and see why they went wrong. I am hoping Stuart goes on the record soon. That will be a dark day for many doomers. People like pstarr will likely suddenly think he no longer knows what he is talking about.

Being a mere layman myself, I'm hardly much cheered by this news in the light of the declines in Cantarell and the North Sea, and demand going ever higher. They've managed to keep the ship afloat for a few years, is all. If they were increasing production enough to make the more cornucopian projections a reality that'd be different.

Don't get me wrong. I don't think we should trust Saudi. And I recognize that Peak Oil will soon be upon us. But I also believe that we discredit ourselves by making dire predictions that never seem to come true. This is what I am seeking to avoid.

There's a good deal of dire reality to kick around though, you must agree. And not just in the oil industry.

[threadbear]

Dude, Dude, Dude. Listen, We can cut our consumption at least 20% or more, on a purely voluntary basis. That, together with a global economic slowdown, is going to reduce oil demand. Doesn't this make you happy? Isn't it a good thing that we will be able to wean ourselves slowly off oil, while dealing with infrastructure problems, like crumbling roads and highways, species extincitions, climate change and water shortages? The future looks so distressing I can't imagine anyone signing up as a cyber soldier to do anything but fight a GRATUITOUS use of gloom, not join the defeated in their war to snuff out all hope.

I watched a peak oil documentary this weekend, and by the end, had I not known a bit more about the topic than the documentary touched on, I would have walked into busy traffic. Not healthy

[TheDude]

Doesn't this make you happy?

Oh, I'm grinning ear to frickin' ear.

What did you learn about peak oil that stopped you? Was it The Answer? "I'm Dr. Phil, and Resource Depletion is No Laughing Matter."

[threadbear]

Doesn't this make you happy?

Oh, I'm grinning ear to frickin' ear.

What did you learn about peak oil that stopped you? Was it The Answer? "I'm Dr. Phil, and Resource Depletion is No Laughing Matter."

I've learned that we have more time to wean ourselves off oil, than I thought. I also see a groundswell of green consciousness developing, being pushed forward by corporate greed, anxious to capitalize on the diminishing role of oil. But mostly-- I see poor people. I see the U.S. starting to resemble a third world banana republic, the middle class becoming the poverty class. Many infotech employees becoming the new Bob Cratchetts, if population doesn't stabilize.

In the future I see Kunstler's clusterf***nation evolving around large extended families inhabiting mcMansions that previously housed between 2 to 4 people.

Most people fear poverty. I look forward to it as a form of involuntary simplicity, and only hope the pain is spread around as evenly as is possible and humane. Employees spend too many hours at soul destroying jobs, shuffling the paper detritus of a financialized economy, around. As consumption drops and oil slowly diminishes, it would be great if this kind of vapid but rapid churning is replaced with something more spirited and meaningful.

[sjn]

Robert, I seem to recall you predicting that SA would increase production over the summer in response to falling inventories. We haven't seen this. What has happened is SA has increased internal consumption, while maintaining production levels, hence reducing exports. I think it's too soon for you to feel vindicated.

I suspect many other "doomers" will agree that we do not wish to see hope destroyed, just false hopes.

[RobertRapier]

Robert, I seem to recall you predicting that SA would increase production over the summer in response to falling inventories. We haven't seen this. What has happened is SA has increased internal consumption, while maintaining production levels, hence reducing exports. I think it's too soon for you to feel vindicated.

Your recollection is slightly off. I said that if we pulled down crude inventories, I would expect that Saudi would be called upon to produce more. But we stayed at record-high crude inventory levels all summer. Now, in that case, if the price starts to climb, they also have an incentive to pump more, and I said that was something else that could cause them to pump more. So, in response to the price climbing (and staying) into the > $80 range, they argued in favor of a production rate increase at the last OPEC meeting, and there are already reports from Asia that refiners there have been told that they would be getting more crude.

So, given that to this point things have gone exactly as I predicted, why on earth wouldn't I feel vindicated? I said Saudi production would flatten out, and it did. I said that they would be called upon when inventories fell or price rose, and they were. And they are responding.

Cheers, RR

[RobertRapier]

Robert is way too optimistic regarding SA. I always side with west texas on those debates.

By the way, it may be of interest to some here - particularly those who think Stuart and westexas are on the same page - that Stuart has really gone after westexas:

http://www.theoildrum.com/node/3050#comment-248303

Some pretty choice comments from Stuart, noting exactly the same kinds of tendencies I noted about westexas (and I had much venom spewed at me for making the observation). He ignores contradictory evidence, and cherry-picks his data to fit the conclusion. I have said it, here is Stuart saying it:

I think I'd rather fight about your tendency to throw out pieces of the data before applying HL to KSA, on the grounds that throwing out different pieces of the data in Texas would have produced the right answer there (if only one had known ahead of time which pieces to throw out).

Or alternatively, perhaps we could fight about your explanation of why a bunch of supergiant reservoirs in KSA are only going to have 15% or 20% recovery rates?

Good stuff. But it gets better:

And if you don't have the "time, inclination, data or expertise to obsess over" that, then why are you holding yourself out to the public as any kind of authority on the subject, because such people should find the "time, inclination, data or expertise" to know what they are talking about - or at least be willing to go figure it out when challenged and change their opinion if the facts merit it.

As I said, Stuart's views on Saudi have evolved since his earlier essays on Saudi. I know that will be disappointing to some here who felt Stuart's essays had put an end to the debate.

Cheers, RR

[threadbear]

Well, Robert. Your body of work seems to have survived the Bed of Procustus that Peak Oil has become.

[WebHubbleTelescope]

I guess the bigger question is whether SA will do anything to defer the global CrudeOil peak that we are currently seeing.

[LastViking]

I guess the bigger question is whether SA will do anything to defer the global CrudeOil peak that we are currently seeing.

The ensuing weeks have answered your question in spades, WHT. KSA production bottomed in 2007Q2 at 9.8mbd (second graph) and is presently 10.3 and climbing.

This has assisted the global trough of 84.75mbd recover to 86.5 and climbing.

Aramco has met its preannounced targets since 2004 continues to set new ones...