[R-G] (no subject)

[gregory meyerson]

This piece should add to the discussion.


btw, in his book, Matt Simmons asserts without argument that capitalism  
will be able to continue growing post peak, without exacerbating global  
warming.  Seems like he's dreaming.




Saudi King drops quiet bombshell; U.S. mediasleep through it April 21,  
2008


Saudi King drops quiet bombshell; U.S. media sleep through it By Steve  
Andrews and Randy Udall, ASPO-USA   April 21, 2008


On April 13, Reuters reported the following from Riyadh: Saudi Arabia’s  
King Abdullah said he had ordered some new oil discoveries left  
untapped to preserve oil wealth in the world’s top exporter for future  
generations... “When there were some new finds, I told them, ‘no, leave  
it in the ground, with grace from god, our children need it’,” King  
Abdullah said... Saudi production capacity stands at around 11.3  
million bpd, and is scheduled to rise to 12.5 million bpd next year.  
The King’s remarks seem to confirm a statement made last year by Saudi  
oil minister Ali al-Naimi who, when asked “How high can your production  
go?” replied, “We’ll get to 12.5 million barrels a day and then we’ll  
see.” If the Saudi announcement was a bombshell, American nearly  
newspapers ignored it. We decided to canvass experts we respect to see  
what they thought.



Tom Petrie, vice president, Merrill Lynch: “King Abdullah’s quote  
speaks to the fast-emerging reality of what I call ‘practical peak  
oil.’ The Saudis and other exporters are placing a new emphasis on  
elongating the petroleum exploitation and depletion cycle. This stems  
from a growing awareness of the challenges of conventional resource  
maturity, as well as rising resource nationalism. This is likely to  
result in an earlier occurrence of global peak oil output than many  
consumers yet recognize.”


Charles T. Maxwell, senior energy analyst, Weeden & Co: “If Saudi  
Arabia’s oil reserves are not going to be made available to the world  
in future years, beyond the expansion they have already signaled (to  
12.5 million barrels/day), then the geologic oil supply constraints  
that we are feeling in many other parts of the world are going to close  
in on us earlier and more severely than we previously thought. It’s a  
major change in policy. It’s a powerful message. It makes the geologic  
message that much more decisive.”

Chris Skrebowski, editor of Petroleum Review: “King Abdullah’s  
statement represents the final seal of approval on an emerging Saudi  
policy of restricting output to save oil for future generations. In  
recent years the Saudis have been managing expectations of future  
capacity steadily downwards. No one now talks of their reaching 15mn  
b/d. If they reach 12.5mn b/d, while maintaining 1-2mn b/d of ‘spare’  
capacity, we should plan for Saudi production to be 9-11mn b/d for the  
foreseeable future. “High oil prices and bulging treasuries are giving  
producing countries the option of maximizing plateau production. We may  
never know if these decisions are being dictated by geology or driven  
by a political imperative of ‘saving oil for later generations.’ I  
suspect it’s a mixture of the two. “In any case, there is now a  
broad-based move by energy exporters, including Russia, Angola,  
Azerbaijan, and Norway, to restrict expansion to maximize plateau  
flows. If this takes hold, then global supplies will reach a peak  
rather earlier than analysis of future projects would indicate.”

Matt Simmons, chairman of Simmons & Co. International: “This statement  
by the Supreme Ruler of Saudi Arabia has far-reaching implications.  
That King Addullah would now instruct his servants to conserve the oil  
they pump and save some for the kids and grandkids of today’s Saudi  
citizens is most profound. “King Abdullah has exhibited a sense of  
wisdom not seen since his brother, King Faisal ruled the Kingdom until  
his tragic assassination. Assuming his health continues, he might lead  
Saudi Arabia successfully into a post-peak world and create sustainable  
middle class wealth for the 90% of Saudi Arabia who had accidentally  
been left behind. “The world should bless this intelligent  
pronouncement. It is a reflection that Twilight set in on the oilfields  
of Arabia a few years ago.”


Richard Nehring, president of Nerhingdatabase.com: “This development is  
part of what I’ve called the ‘Prudential Plateau.’ Some key countries  
with large reserves and resources have decided to maintain production  
at current levels-but not increase it. This is a two-edged sword: you  
can no longer count on these countries for increases, but you can count  
on them for the base. The United Arab Emirates and Qatar will probably  
join in this shift.”


Jeffrey Rubin, chief economist, CIBC World markets: “A far more  
plausible explanation for faltering growth in Saudi production and  
exports is that they are rapidly approaching maximum production. Given  
soaring rates of internal consumption for oil, they will soon be  
exporting less not more crude to world oil markets. “Russian Natural  
Resource Minister Yuri Trutnev’s has said that Russian production and  
exports will fall this year, for the first time in a decade. We  
forecast that exports from OPEC, Russia and Mexico will actually  
decline by 2.5 million barrels per day between now and 2012. It’s far  
from obvious who is going to fill this supply gap, let alone meet the  
need of future global crude demand growth.”



Jeremy Gilbert, BP’s retired chief petroleum engineer: “I have no idea  
whether there was a real choice for the Saudis to make. Perhaps it’s  
all ’spin’; perhaps there were discoveries, but there was some property  
of the reservoirs which made them very difficult to develop, and it  
made sense to delay development until improved technology or much  
higher prices arrived; perhaps it’s the plain basic truth - a very rare  
commodity. “What I do know is that several countries in the Gulf have  
long chosen to operate their fields with depletion rates far below  
those that a Western company would consider optimal, or even sensible.  
Depletion rates of between 1 and 2%/ per year are not uncommon in the  
United Arab Emirates. Local leaders have repeatedly said that they feel  
an obligation to preserve some of their natural resources. These  
feelings must be intensified when their recent production has been sold  
for US dollars which have depreciated by 25% or more against other  
strong world currencies over the last four years. “The countries around  
the Gulf, which would once have come to the aid of a faltering U.S.,  
now are either delighted about the U.S. plight or just don’t care. They  
are not going to do anything to reduce world oil prices. Instead, they  
are going to maximize their economic take while minimizing depletion of  
their sole natural resource.”

Herman Franssen, president of International Energy Associates: “King  
Abdullah’s remarks reflect the new thinking in the Middle East, where  
the Kuwaiti parliament has also expressed a need to stabilize oil  
exports. Higher oil prices enable producers to focus more on domestic  
investments than on increasing exports. All Gulf countries have seen  
huge growth in domestic demand for power and fuel. By 2015, Iran may  
consume as much of its crude oil as they export. The King’s remarks  
mean that we in the industrialized countries better start looking for  
other solutions.”



Steve Andrews and Randy Udall are two of the five co-founders of  
ASPO-USA. Article found at :   
http://www.energybulletin.net/newswire.php?id=43048 Original article :   
http://www.aspo-usa.com/index.php? 
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