[Doly]

I will make the point again...Simmons is a Merchant Banker with his own agenda. He is not a technical person, and reading 200 papers will not make him one.

So... what's your opinion on the matter of PO?

[spartacus]

Like all commodities, there will at some point be a physical/economic limit to production.

I will point out the example of coal, where reserves remain in Europe, but economic and social conditions are such that in France and England the production has ceased or is negligable compared to the past.

This does not mean that the coal is not present. Likewise, there are not too many Cornish tin mines around for similar reasons.

The Peak oil argument is one of timing, not occurrence. Sooner or later we will be in depletion mode. I think it is fanciful to assume that any resource is infinite.

However, there is a peak 'production' level that is governed by reservoir deliverability on the one hand, and willingness to invest in additional infrastructure on the other.

Since the last oil price shock, world demand has increased, but prices collapsed. Oil went out of everyones view as it was relatively cheap. It's only the current speculative bubble that has everyone concerned.

I

[julianj]

I was very impressed with the book, but like Matt Simmons, I'm not a technical person, and of course we are all befuddled by the secrecy of the Saudi regime.

I'd be very interested to see a critique of the book posted by well-informed parties such as the posters above.

[aldente]

Pstarr don't get yourself so worked up..
To me it is good news and time bought that some capacities here state that there is a possible extention of the status quo. I love it. For a while there I had a signature under all my posts: "Being aware of Peak Oil means that you have seen the future".
What I meant is that the only distinction between the posters on this forum and the rest of the population is their ability to sense and see the future.

We all have a desire to see the future and one of the methods is to analytically take the past and extrapolate it into the future via the present. Mathematical formulas are vehicles and contain a lot of compressed information. Seemingly abstract formulas can be made visible and therfore intuitively accessible through art and the objective is that they "trigger" processes in highly observant minds.

I posted pictures of that nature in the past but they have been misunderstood and deleted by the administrators of this site. Here again the Mandelbrot set in the hope that I holds up:


{I'm responsible for one - the one a couple members found inappropriate for their situation. A link still works... Many workplaces in the US now are highly censored, one way or the other - must be accommodating; EE}

[rogerhb]

so only a certified, accredited, diplomad, titled, and highly honored reservoir engineer and geologist is qualified to opinionate on such matters? If this were the case then Peakoil.com would be blank.

No, we've still got Kenneth Deffeyes!

[DantesPeak]

More reviews, and one by Simmons himself:

The Response to Twilight in the Desert
by Matthew Simmons
So far, the praise for Twilight in the Desert has outstripped the negative comments by about 50 to one! This has been a pleasant surprise.

I have now received hundreds of letters, e-mails and calls from people who have finished reading my book. Scores of these comments have come from some of the top oil and gas technical experts in the world, and a surprising number of CEOs from the leading independent exploration and production companies have sent me cartons of books to sign so they could distribute copies to their board members and other senior managers. The most common praise the book has received has been for its thoroughness, for the clarity with which complex reservoir management issues were discussed and for its ease of reading.

However, not all of the feedback has been supportive of my thesis. The handful of critics who have surfaced so far have questioned the book’s accuracy on several fronts. I will summarize the key issues critics have raised.

http://www.worldenergysource.com/wemr/letterA_0905.cfm

Why Simmons Is Wrong about Saudi Oil
by Ali Daneshy
Matthew Simmons’ arguments in Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy are providing more ammunition to the proponents of peak oil. I’m not the first one to disagree with Simmons on his thesis about Saudi oil. Michael Lynch, a leading critic of the peak oil theory, has also criticized Simmons’ approach. In his book, Simmons warns that Saudi Arabia cannot boost its production to "10, 12, or even 15 million barrels of oil a day for the next 10 or 20 years, let alone 50 years" and that "nothing in the data supports the claim that Saudi Arabia can maintain production at current levels for more than five to 10 years."

Simmons means well in this and other writings and should be commended for it. He fully recognizes the importance that energy plays in our standard of living and the welfare of the world, and he is obviously worried. But he is quite wrong on Saudi Arabian oil production potential.

Saudi Arabia’s high oil production is not a recent or momentary event. Saudi Arabia has been producing at more than 9 million barrels per day for the last 13 years, and at around 10 million barrels per day for the last three. When natural gas condensates are included, daily production now equals nearly 12 million barrels of liquids.

The fluctuations in Saudi production have come mainly in response to demand changes and the Saudis’ desire to be the dominant player in the energy world. When needed, they have shown the capacity and ability to increase their production. And the speed of these changes has been in line with what experts would consider reasonable, albeit slower than the layman’s expectations.

http://www.worldenergysource.com/wemr/letterB_0905.cfm

[knoppix2004]

Yay! Just got my copy in the mail today from Amazon. Still warm from the press. No review yet, but just read the back, he gets great reviews from some respectable figures. Okay, I'm off to go dig in.

Those of you who can’t afford to buy the book, try getting it from a library. I was in Mid-Manhattan Library, and the librarian told me that they will have the book in the library soon. Try www.nypl.org in two or three months, and see if they have it. However, they also have some excellent books written by other authors.

[spartacus]

pstar.....it helps to have the education + experience to sort the wheat from the chaff. You go on believing the doomsday scenario....I'll keep working on the Aramco oilfields! It's unlikely he will get too many comments from Aramco staff.....where is the compelling reason to even bother refuting him....he won't believe it anyway.

Mr Simmons, in his own reviewof his book and comment s received states:

Finally, to the critics who say that an investment banker doesn’t have the technical expertise to understand SPE papers, I have two responses. First: I did my homework as best I could. Second: I had extensive conversations with some of the finest reservoir and geological experts in the world. All the material was reviewed before publication not only by many people with exactly the right expertise but also by people who had personal knowledge of the Saudi Arabian reservoirs about which I was writing. To them all, I express my deepest gratitude, because they made sure that this investment banker didn’t make a fool of himself!


Unfortunately, his "expert" reviewers have done him a diservice. There are enough mistakes in the technical review to bring into doubt any conclusions he has drawn.

As I originally posted......it makes no difference to me.....it's this sort of stuff that drives the oil price higher and puts dollars in my pocket.

And finally, perhaps the high oil price reflects the real cost, and will lead to a fall in demand, thus deferring the inevitable!!

[Revi]

Matthew Simmons is very interesting to hear speak. He really knows his stuff and can communicate the seriousness of the situation to a broader public than just us peak freaks. I went to a screening of End Of Suburbia at his movie theatre in Rockland. Afterwards there was a discussion. He suggested that the world is projected conservatively to demand 125 million barrels of oil in 2020, but we may only have around 70 million. Just that little bit of info rolls around in my brain. Do you think we'll all be driving around in hybrid hummers if we have around half the energy we had before? Or will we need it to heat our homes?

I read Twilight in the Desert, and the punchline was buried in the last chapters. He knows a lot. Maybe we should listen to him! He also advocated transparency in reporting world reserves as a crucial first step towards making the amount we have left work for us. Great idea! Then we could plan on what to do with what we have left. Kinda like looking at the bankbook before deciding what to do with your money.

[azur]

Unfortunately, it will appeal to non-technical people because it SEEMS that Simmons knows what he is talking about. To the Professional Petroleum Engineer, who has worked the fields he talks about, it is rubbish.

I am currently compiling a list of reservoir engineering faux pas that Simmons made in his book...care to help out?

It's easy to poke fun at Simmons, isn't it. Of course he is not a reservoir engineer, or a petroleum engineer, or a geologist. I too had to cringe at a few of the errors. But to focus on that it to miss the point completely.
What Simmons has produced is the only (as far as I know) attempt at a comprehensive analysis of the Saudi reserves question, which is crucial to the whole issue of PO. The fact that it takes an investment banker to do that for us oil industry personnel should make us ashamed, not defensive and hyper-critical.

In my view (an engineer in the offshore oil business for 25 years) when taken at a high level this is an important piece of work. Yes, it may be weak on some details, but it is an important review of the situation in Saudi. To see that Saudi reservoirs are prone to the same produiction problems as the rest of the world, and are using the same solutions, means that they are not that special and will eventually suffer the same decline and demise as the reservoirs in the rest of the world.

To Simmons, I say Bravo and Well Done for having the courage to tackle this issue and open up the debate on this critical topic.

[seahorse]

spartacus,

Tell us this:

(1) What is Saudi Arabias URR?
(2) How much is P1? P2? P3?
(3) How much is offshore?
(4) How much is light sweat or I should say "conventional" as defined by ASPO?
(5) What is Saudi Arabias maximum production capacity now?
(6) What will be Saudi Arabia's maximum production capacity be in 2015? 2020? 2025?
(7) Is Ghawar in depletion as has been reported by various sources? If not, what is its maximum level of production today and what is it currently producing today?
(8) Saudi Arabia announced they are ordering many new rigs for off-shore development, why not for on-shore development?
(9) How much is Saudi Arabia investing in on-shore exploration?
(10) What is a good average depletion rate for Saudi fields?
(11) What is the world's URR? How much of this is conventional versus non-conventional oil?
(12) In what year do you believe OPEC production will exceed non-OPEC production?
(13) When do you believe the world will experience the "peak" in world oil production?
(14) In what year do you believe non-opec oil will be in permanent decline?
(15) What do you believe is the URR for Russia? Please break this down in to percentages for P1, P2, P3.

[spartacus]

Seahorse...you're kidding, right.

Anyway, some of that stuff was presented at the CSIS forum with Mr Simmons. It may be the official take on things, but you will get some ideas. Go to http://www.csis.org/energy/040224_baqiandsaleri.pdf

I'll have a bash at it though!

You asked:

Q(1) What is Saudi Arabia's URR?
A: refer to Nansen Saleri's presentation, 131 billion bbls developed. Total reserves 260 bbl barrels. Slide shows reserves depletion for most fields.

Q(2) How much is P1? P2? P3?
A: P1? That's a bit tight (if you are talking probabilities). I assume you are talking 1P,2P,3P This is addressed in Mr Saleri's presentation.

Q(3) How much is offshore?
A: see Mr Simmons book for details of field names, then look at the presentation.

Q(4) How much is light sweat or I should say "conventional" as defined by ASPO?
Everything is conventional (don't know ASPOs definition). Waterflood is primary recovery, in that if you didn't use it you would get less than 10% recovery. There is no EOR. Mr Simmons book gives some details, but he does leave stuff out.

Q(5) What is Saudi Arabias maximum production capacity now?
A: See Mr Saleri's presentation.

Q(6) What will be Saudi Arabia's maximum production capacity be in 2015? 2020? 2025?
A:See Mr Saleri's presentation

Q(7) Is Ghawar in depletion as has been reported by various sources? If not, what is its maximum level of production today and what is it currently producing today?
Ä: See Mr Saleri's presentation

Q( Saudi Arabia announced they are ordering many new rigs for off-shore development, why not for on-shore development?
A: Saudi Aramco is expanding its drilling rig fleet by 100 percent over a two-year period, going from 55 in 2004 to a planned 110 in 2006. Nowhere does it say "offshore".

Q(9) How much is Saudi Arabia investing in on-shore exploration?
A:pass

Q(10) What is a good average depletion rate for Saudi fields?
A:Saudi Aramco claims that the total depletion rate of its oil fields, so far has been approximately 28%-30%. See Nansen Saleri's presentation as well for a lot of detail.

Q(11) What is the world's URR? How much of this is conventional versus non-conventional oil?
A: See the BP Statistical Review.

Q(Q12) In what year do you believe OPEC production will exceed non-OPEC production?
A: Don't know....but depending on what reserve/production scenarios you model (including undiscovered), you could get a lowside/highside estimate yourself.

Q(13) When do you believe the world will experience the "peak" in world oil production?
A: Hopefully not November!

Q(14) In what year do you believe non-opec oil will be in permanent decline?
A: You mean they are not already??

Q(15) What do you believe is the URR for Russia? Please break this down in to percentages for P1, P2, P3.
A: come on....be fair......I'm not the font of all knowledge for the entire world oil industry. Anyway, like all things, perhaps a blend of ASPO numbers, the CIAs numbers, and any other (in)credible source.

[seahorse]

Spartacus,

Actually, I'm concerned enough that I wasn't kidding and appreciate your answers. I know you can't be the forefront of all issues, but your certainly ahead of me and that's why I am asking.

Oil and Gas Journal had a good article last February about the importance of the "cross-over" event, meaning that time when OPEC production exceeds non-Opec production, that's why I asked.

As for non-OPec being in depletion, that has been an issue for some of the optimist like Lynch that insists non-opec isn't in depletion and will not be so for some time.

Haven't had time to look up the references you cite, but will do so. Thanks

[Barlow]

After hearing Mr. Simmons speak at Rep Bartlett's Sept energy conference in Frederick MD, I had run out of excuses not to buy the book. (I bought Prof Deffeyes, too, but already read two Heinberg books -- all speakers that day.)

I couldn't put Simmon's book down. I loved the detail of the key oil fields and their history.

The underlying message is SAUDI ARABIA WILL NOT BE AN ENDLESS SUPPLY OF OIL TO THE REST OF THE WORLD BECAUSE THEIR OIL FIELDS ARE OLD, VERY OLD AND REPLACEMENTS FIELDS OF THAT MAGNITUDE ARE NOT FORTHCOMING.

A secondary message that I was taken somewhat by was the natural gas situation in Saudi Arabia. That merely points to an underlying problem in the ME: Too many people. (There are 29 million people in Afgahistan with no visual means of support, except us, now.)

Noted in previous posts were discussions about Simmons' wasn't a reservior/pet engineer, but merely a banker. Well. Duh. In today's world, there's only one thing more precious than money -- and that's one's health and safety. Bankers must make educated decisions, particularly in high risk areas like oil/gas. I doubt if Simmons really needs to know how to calculate the flow of flooding water through a Super K zone.

I don't know if any of you all have been in work situations where -- sometimes -- the first line person with the experience is so close to a situation, they can not see the forest for the trees. Not that it's their fault, but it just may be their job description to worry about the bark on the tree. (Of course, the other side of that coin is management better listen to that person about his/hers judgement on said situation.)

Another interesting speculation was the US owners of Aramco allowed the Saudi oil fields to be dangerously ramped up in production during the 1970's to cash out before full Saudi ownership came about in 1979. This high production rate alegedly damaged the fields. Didn't I read somewhere that Iraq damaged their fields back in the day by water injecting them?

A few things struck me reading his book:

1. Don't all mature fields have the same sort of problems as the Saudi fields do?

2. Thanks to the CIA (spies, ex-Aramco workers, and satellites), doesn't our government really know more about the Saudi oil situation than we are being told? After all, Simmons has the 1970's CIA Senate reports in Apprendix C.

3. Simmons was on Cheney's 2001 Energy Advisory Board. I expected more comments in the book about Iraq's oil. There were none.

4. I would have liked to see estimated production curves for Ghawar -- and so would the rest of the world.

Because of Mr. Simmon's position of influence and knowledge, I wonder if using the SPE papers was a front to report on things he already knew but discreation would prevent him from publishing. It matters, not.

Great book, but some sections are sleep-inducing for the non-technical reader.

[Revi]

I really got the feeling from the book that it's later than you think. The world has been relying on Saudi oil for over 4 decades now. That's a long time for an oil producing region. Saudi Arabia has a lot of oil, but even that won't allow us to increase production, or maybe even hold it stable. This book really brought the reality of peak oil home to me. We're in trouble. Ghawar won't save us.

[donshan]

1) For me reading Simmons book was a wonderful introduction to the history of Saudi Arabia's oil development, its people, and the location and extent of the oil fields. I am sure those who have worked in the industry in Saudi Arabia already knew all this, but many of the rest of us did not. Now I know what "Ghawar" is, and can at least follow the discussions by the technical experts here in this Forum and elsewhere as they discuss the issue of Saudi oil reserves and production.

2) I was also impressed with the enormous detail and work it took to prepare this book with all the detailed maps, tables, and statistics. I have written quite a few technical papers and reports and just the proof reading of a book this detailed is an awesome task to assure the typists, and graphic artists did not mess up the data and captions.

3) I don't think quibbling about details, or "minor" arguments effecting a few million bbl/day of production are the important point. For me the most important point in the book is located on page 336 in a sidebar and in the text.

... It is virtually impossible for Saudi Arabia ever to produce 20 to 25 million barrels a day

The US Department of Energy's EIA agency has published the official US Government projections. These numbers are used to guide policy by the Administration, DOE R&D efforts, and actions by the Congress. These data are at odds with Simmons.

Who do I trust? Simmons, or my government?

Data from the Energy Information Agency of DOE show in OPEC only Saudi Arabia has surplus capacity of 1.0-1.5 millon bbl/day (October 2005) at the present time.
http://www.eia.doe.gov/emeu/steo/pub/3atab.html

Data from EIA International Energy Forecast 2005 Appendex E Table E-4 show the following data for OPEC Projected Production is to increase by about 20 million bbl/day by 2025:
http://www.eia.doe.gov/oiaf/ieo/pdf/0484(2005).pdf

1990 24.6 Million bbl/day
2002 28.3
2010 37.0
2015 40.0
2020 45.5
2025 51.4

EIA does not breakout Saudi Arabia, but if the other OPEC countries have zero excess production capacity today most of this must come from Saudi Arabia. The also project Non- OPEC oil produciton rates to increase about 10 million bbl/day. A total of about 30 million bbl/day increase in production by 2025 and they project prices to stay below $60/bbl in 2003 dollars.

EIA also projects oil prices and their figure 30from the link below which in Figure 30, an oil price of mid $30s in 2025 and a " high" price of about $50 in 2025 caused me to roll my eyes a bit, especially when you look at the sharp break of the upward trend in Fig 30 which shows a mid $40s price in 2005 and then a dropping price out to 2025 !:
http://www.eia.doe.gov/oiaf/ieo/oil.html

Link to Fig.30
http://www.eia.doe.gov/oiaf/ieo/figure_30.html

I am a scientist myself, and I don't trust "projections "like figure 30 with such changes in trend. What magical supply of oil is just around the corner to produce this rosy scenario, with prices still below $60 in 2025 ($2003)? Fig 30 has already been proved wrong by prices this year.

So my conclusion is I am in the Simmons camp. I would greatly appreciate one of Simmons critics providing a book or a reference that would explain EIAs price data chart, and to explain how they think OPEC can expand production by 20 million bbl/day at prices under $60.- THE very point Simmons says cannot happen.

Considering the fuss being made over Peak Oil, I would think a book refuting Simmons done with careful reservoir analysis of all of OPECs reserves to substantiate the EIA scenario would be a money making best seller.

This is not a trivial matter.

A report commissioned by DOE on the risks of not taking Peak Oil Seriously indicates it will take 20 years and Trillions of dollars in investment to replace the 210 million vehicles in the USA with more efficient ones and that a crash program is needed to start 20 years before the peak to develop alternative liquid fuels ( they don't think solar, wind or nuclear will help produce liquid fuels in time).
http://www.energybulletin.net/4638.html


If it is possible ,it is time refute Simmons with publication of hard data and analysis, sufficient to convince the world. There have been enough misrepresentations out of Washington DC in the past few years. I fear we are again not being told the truth, based on just figure 30.

I am open to all comments and explanations as to why I should believe EIA's figure 30, instead of Simmons.

To Quote EIA:

Resources are not expected to be a key constraint on world demand to 2025. Rather more important are the political, economic, and environmental circumstances that could shape developments in oil supply and demand.

Edit: added link to Figure 30

[DantesPeak]

Sorry,

Posting subscription material is illegal.

[dukey]

i've just finished reading his book
the hard thing about the whole peak oil thing is that its not production from 1 field. Its en entire net effect

but it seems like the last cards are in saudi arabia, and that production from nearly everywhere else is flat and in decline. Russia actually increased their oil/gas production this year and simmons briefly goes over the reasons for this. When the water is injected back into the oil fields sometimes pockets of oil get bypassed and left behind. So this according to simmons this is where the entire increase in production has come from (basically getting the last of the easy to get to oil). And this oil will probably fairly soon peak and go into terminal decline like it did in the 70's. Then of course going back to saudi arabia

from reading his book he goes over the fact that most of the output comes from like 4 or 5 fields. And it seems like most of the fields are in decline now, some which clearly have been for a while now. The only field which hasn't clearly peaked in Ghawar. And as most know this is the largest field on the planet and it produces something like 5 million barrels per day. Basically according to simmons fields have a rate sensitivity. Extracting the oil too fast damages the field and causes premature water break throughs and the pressure in the field to drop. If the pressure drops too low bubble point is formed and the gas in the oil all comes out of the oil. Production will probably nearly about stop then because the natural pressure in the field has wained.

Relating this to the constant stream of gargbage the saudis come out with. Them talking about wanting to cut production totally makes sense. Because they are probably damaging their most key fields keep production at this level. It may even be possible for saudi arabia to increase production, but how long this can last is very questionable.

[FireJack]

The SPR might play a very vital role this year in keeping oil from spiking.
IF they were smart they would allow oil to rise but not skyrocket. Im pretty certain well start to see the effects of higher gas prices. Will the economy finally break, hmmmm.