Expert says Saudi oil may have peaked

[eek.]

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As oil prices remain above $45 a barrel, a major market mover has cast a worrying future prediction.

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Energy investment banker Matthew Simmons, of Simmons & Co International, has been outspoken in his warnings about peak oil before. His new statement is his strongest yet, "we may have already passed peak oil".<?xml:namespace prefix = o ns = "urn:schemas-microsoft-comfficeffice" /><o></o>

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The subject of peak oil, the point at which the world's finite supply of oil begins to decline, is a hot topic in the industry. <o></o>

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Arguments are commonplace over whether it will happen at all, when it will happen or whether it has already happened. Simmons, a Republican adviser to the Bush-Cheney energy plan, believes it "is the world's number one problem, far more serious than global warming".<o></o>

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Saudi oil peaking?<o></o>

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Speaking exclusively to Aljazeera, Simmons came out with a statement that, if proven true over time, could herald by far the biggest energy crisis mankind has known. <o></o>

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"If <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-comffice:smarttags" /><st1lace w:st="on"><st1:country-region w:st="on">Saudi Arabia</st1:country-region></st1lace> have damaged their fields, accidentally or not, by overproducing them, then we may have already passed peak oil. <st1lace w:st="on"><st1:country-region w:st="on">Iran</st1:country-region></st1lace> has certainly peaked, there is no way on Earth they can ever get back to their production of six million barrels per day (mbpd)."

The technical term for damaging an oilfield by overproduction is rate sensitivity. In other words, if the oil is pulled out of the ground too fast, it damages the fragile geological structure of the field. This can make as much as 80% of the oil within the field unextractable. Of course, at the moment, virtually every producer is at full tilt. The most important among them is <st1:country-region w:st="on"><st1lace w:st="on">Saudi Arabia</st1lace></st1:country-region>; their Gharwar field is the world's biggest.<o></o>
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One of the first hints that Simmons got over possible Saudi Arabian overproduction was from researching an obscure <st1:country-region w:st="on"><st1lace w:st="on">US</st1lace></st1:country-region> Senate committee meeting in 1974.<o></o>

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Field damage<o></o>

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"A whistleblower in Saudi Aramco, <st1:country-region w:st="on"><st1lace w:st="on">Saudi Arabia'</st1lace></st1:country-region>s oil company, was first reported in The Washington Post. He had claimed that Aramco had been overproducing the giant Gharwar field and that if they did not slow down, they would damage the reservoirs.



"The committee, which swore witnesses in under oath, produced over 1400 pages of documentation on the subject, it included some specialist advice which advised cutting Saudi production to 4mbpd to maintain production levels."

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Currently, at near maximum production, <st1:country-region w:st="on"><st1lace w:st="on">Saudi Arabia</st1lace></st1:country-region> is producing about 9mbpd, though recently they claimed they could potentially produce 12mbpd or even as much as 20mbpd. A claim Simmons called "pie in the sky".<o></o>

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"The faster you pull a reservoir, the faster you pull out all of the easy-to-produce oil," explains Simmons. "What happens is that you lose massive amounts of what the oil industry calls oil-left-behind still inside the field. These issues, as you can see, have been known about for years."

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Overproduction<o></o>

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"If you look at what <st1:country-region w:st="on"><st1lace w:st="on">Iran</st1lace></st1:country-region> is doing, they are actually going to inject natural gas to the tune of 2bcf (billion cubic feet), through a 72in pipe into their Aghajari oilfield. It is a $2bn project. This is in order just to boost production from 200,000bpd to 300,000bpd. In the 1970s Aghajari was producing 1mbpd. It has been overproduced."

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In 2004 Shell said it had lost 20%
of its reserves
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</TD></TR></TBODY></TABLE>Simmons also says the same thing happened with the oil company <st1:City w:st="on"><st1lace w:st="on">El Paso</st1lace></st1:City> last year. <o></o>



"At the same time as the Shell write-off, <st1lace w:st="on"><st1:City w:st="on">El Paso</st1:City></st1lace> realised they had been producing their fields too hard. As a result they had to write off 41% of their reserves." In 2004 Shell first announced it had lost about 20% of its oil reserves.<o></o>

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Another clue came as Simmons discovered a ferocious debate that had been going on inside Saudi Aramco about overproduction.



"The company claimed in the early 1970s that it would be able to produce 20 to 25 mbpd, then by 1978 it was 12mbpd. Now it looks like 9.8mbpd is the maximum," he says.

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Precious resource<o></o>

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"Luckily for them, demand quietened down in the 1980s. People thought when they cut production that they were simply trying to drive up oil prices, but in fact they were resting their fields to limit the damage.



"But then came the first Gulf war and they were forced to crank production up again and they have been fighting the problem ever since.<o></o>

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"In 1981 in their own book, Aramco and its World, something they give out to new employees and such, they openly talked about how maximising production would permanently harm their fields and that maximum production could not continue. They thought demand would fall and the fields would be sustained. Unfortunately that has not been the case."

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The reasons for maximising production are not always obvious, they can be technical, but also geo-political.<o></o>

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"There is always a balance for producers. Do you want to conserve your fields and produce slowly? Or do you want to be a statesman? Would you rather be a market leader with all that brings, or a smaller, less powerful producer?"

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The idea that <st1lace w:st="on"><st1:country-region w:st="on">Saudi Arabia</st1:country-region></st1lace> could force its production up to 12mbpd or higher is met with scorn by Simmons.<o></o>

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"This is dangerous stuff," warns Simmons. "If we say they have not peaked and then they choose to further increase production, they will only hasten their field decline, and waste huge amounts of valuable oil into the bargain. And oil, as we are only now coming to realise, is the world's most precious resource."

http://english.aljazeera.net/NR/exeres/80C89E7E-1DE9-42BC-920B-91E5850FB067.htm

 

[Shotgun]

They've been saying this for 30 years now...kind of like the guy on the street corner screaming 'the end is near'. I guess one of these days he's going to be right. I'll certainly bet against it though.

 

[Hobbes]

Al-Jazeera is definitely where I would go for a reasoned report on the oil reserves of the Mid-East. On the off chance it is true no one will have to argue about U.S. involvement as American GI's will be exiting poste haste.

 

[eek.]

Al-Jazeera is definitely where I would go for a reasoned report
on the oil reserves of the Mid-East.

You guys need to broaden your horizons.
i.e. don't believe everything your Government tells you.

Al-J is turning out to be like an arab version of the BBC.
This is why it is banned from so many Arab countries.

Fox is just sillynews.com which is why no one would ever bother banning it from anywhere.

Matthew Simmons, of Simmons & Co International

Matthew R. Simmons is the founder and Chairman of the world's largest energy investment banking company, Simmons & Co. International. He graduated cum laude from the University of Utah and received a Masters degree with distinction in Business Administration from Harvard Business School. He then served on the faculty as a research associate for two years. In 1974, he founded Simmons & Company International. He is past Chairman of the National Ocean Industries Association and a trustee of the Farnsworth Art Museum in Maine. He serves on the Board of Directors of the Associates - Harvard Business School and past President of the Harvard Business School Alumni Association. He serves as a Board Member of Kerr-McGee Corporation, Brown-Forman Corporation, the Center for Houstons Future, Houston Technology Center, ICIC and The Atlantic Council of The United States of America. He is also a member of the Counsel of Foreign Relations.

http://www.globalpublicmedia.com/people/matt_simmons

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Matthew Simmons has been a key advisor to the Bush Administration, Vice President Cheney's 2001 Energy Task Force and the Council on Foreign Relations. An energy investment banker, Simmons is the CEO of Simmons and Co. International, handling an investment portfolio of approximately $56 billion. He has served previously on the faculty of Harvard Business School. Among Peak Oil researchers he is known for two seemingly contradictory things: being a staunch supporter of George W. Bush and his policies and probably the only outspoken insider to talk openly about Peak Oil.

http://www.fromthewilderness.com/free/ww3/061203_simmons.html

 

[docmercer--banned]

Eek: I got an email from a Buddy this morning who works in the industry and we is screwed! My buddy sued Gov Bush back in the late 1990's and Bush was forced to take the witness stand .. that idea was quickly ended with a 6 figure out of court settlement as Bush would have been forced under Oath to answer questions on a number of things Daddy managed to get hidden:

"We are in an energy crisis that is so bad that complete financial ruin is unavoidable. And now, after a botched CIA takeover attempt a year or so ago, our government is actively trying to assassinate President Hugo Chavez of Venezuela, the leading oil and gas producer in the western hemisphere. In the wake of Bush's ongoing threats, Venezuela has just cut deals with China and India that will further threaten US energy supplies. Junior's European Adventure went really bad, in spite of what the corporate media says, and the entire world is opposing Bush in an effort to stop his further war plans and prevent a nuclear Armageddon. The Bush Crime Family is in so deep, and our once great nation is now so close to complete financial, diplomatic and military meltdown, that Bush/Cheney & Company will pull another 9-11 operation to muddy the waters and blame it all on the terrorists ... again! You may recall that the whole country was beginning to tank in early 2001 ... and 9-11 came along just in the nick of time to bail out the evildoers in Washington. This time, powerful elements within military, intelligence and conservative circles are working to make sure it won't happen again ... even if it means bringing down Bush by any means necessary. Fasten your seatbelt ... the ride will be a wild one!!"

 

[Marco]

Someday Saudi and all the rest of the oil countries will be pumping sand.....

One of the few good things about that scenario is that maybe then we will drop all the coddling that goes with "protecting the oil fields"......and start to treat the oil countries like some country in the middle of Africa that we generally ignore.

Then what, electricity and train travel?

Maybe hoist a sail on top of the ole' Dodge and wait for the right wind to go down to the local bar?

 

[JinnRikki]

Breakthrough in solar photovoltaics





THE HOLY Grail of researchers in the field of solar photovoltaic (SPV) electricity is to generate it at a lower cost than that of grid electricity. The goal now seems to be within reach.

A Palo Alto (California ) start-up, named Nanosolar Inc., founded in 2002, claims that it has developed a commercial scale technology that can deliver solar electricity at 5 cents per kilowatt-hour.

Molecular self-assembly



The breakthrough has come through the application of nanotechnology to create components via molecular self-assembly, including quantum dots (10nm large nanoparticles) as well as nanotemplates with structural order extending through all three dimensions.

In addition, Nanosolar has demonstrated that the three dimensionally engineered nanotemplates can be conformally coated or solidly filled with semiconductor paint to create ultra-thin solar cells with layers that are yet another factor 100x thinner than conventional thin-film amorphous silicon solar cells.

This allows a 10x larger surface area of these structures to be used to achieve a 10x increase in efficiency for such thin layers, thus making it possible to use even less material for similarly efficient cells. Conventional inorganic semiconductors tend to require intricate processing to ensure large grains of crystallinity (in the extreme case: mono-crystallinity) so that charges can travel hundreds of nanometres without getting trapped and lost (at internal crystal boundaries).

The 3D nanocomposite architecture of the ultra-thin-absorber cells makes possible absorption of a substantial fraction of the incoming sunlight despite the ultra-thin layers since the charges need to be transported only several nanometres without much opportunity for a loss.

This means the requirements on the semiconductor material can be relaxed and low cost materials such as inorganic semiconductors of the IIb/VIa and Ib/IIIa/VIa families as well as solution-coatable organic semiconductors can be used.

Lower cost



According to the CEO, Martin Roscheisen, the conversion efficiency (percentage of incident light energy converted to electrical energy) of the Nanosolar SPV cell is above 12 per cent for its first product prototypes. He claims that the Nanosolar SPV cell costs only $ 0.36 per peak watt.

The semiconductor paint can be applied to a flexible substrate , such as a polymer sheet , through a simple web printing process, to create an array of ultra-thin solar cells.

Nanosolar has developed proprietary substrate technology that keeps the substrate cost within a smaller fraction of the overall product cost than any other state-of-the-art thin-film solar cell technology. The company has also developed a powerful new way of interconnecting individual solar cells into larger modules and large-area sheets and allows high-throughput module assembly at high yield.

The flagship product, Nanosolar SolarPly, is a 14 feet x 10 feet solar electricity module delivering 120 watts per square inch at 110V. The company is now offering solar panels at below $1 per peak watt.

The Nanosolar team, headed by CEO Martin Roscheisen (listed by Fortune in 2003 among the top ten U.S. entrepreneurs below 40 years of age), has some top-notch Indian technologists assisting it.

Among them are Dr. Siva Sivaram (ex-Intel) and Dr. Arati Prabhakar , former Director of the U.S. National Institute of Standards and Technology.
N.N. Sachitanand

Here comes the cavalry!

 

[volhound]

this scare tactic was tried back in the 70's. some of you probably still believe that one

 

[nimue77]

this scare tactic was tried back in the 70's. some of you probably still believe that one

Peak oil is not a theory, it is just the inevitable. Whether or not alternative energies can replace oil quick enough to prevent large problems for the world is debatable.

 

[Hobbes]

Someday Saudi and all the rest of the oil countries will be pumping sand.....

One of the few good things about that scenario is that maybe then we will drop all the coddling that goes with "protecting the oil fields"......and start to treat the oil countries like some country in the middle of Africa that we generally ignore.

Amen to that...

 

[Buster]

http://blog.nanosolar.com/

Municipal Solar Power Plants
April 16, 2008
Posted by Martin Roscheisen, CEO

At Nanosolar, we believe very much that meaningful scale for solar will come foremost from utility-scale solar power plants, in particular from municipal solar power plants of 2-10MW in size. These are rows of solar panels mounted onto the ground of free fields at the outskirts of towns and cities, feeding electricity directly into the municipal power grid.

A 2MW municipal solar power plant requires about 10 acres of land to serve a city of 1,000 homes — that’s acreage generally easily available at the outskirts of any city of such size in even the most developed countries. Have one of these in each of several hundred cities and a Gigawatt of power is delivered — locally to where the power is needed and in a digestible size each.

In a municipal solar power plant, solar panels are mounted onto rails above the ground so that grass and flowers can continue to flourish in between and below the rows of panels. Care is taken that sufficient amounts of rainwater can drop through between adjoining panels so that the flowers and organisms below are not starved. In fact, in dry regions, the solar panels even benefit the ecosystem by increasing the moisture level in the soil.



Municipal solar power plants integrate very naturally into the existing landscape as well as the existing electricity grid. By feeding power directly into the (local, medium-voltage) distribution grid, they avoid the (long-haul, high-voltage) transmission grid which is expensive to build and expand, and they also avoid the expense of a substation for down-transforming transmission voltage to municipal voltage. It’s a form of distributed generation but at the wholesale level — ”Wholesale Distributed Generation” (WDG) – and it has been determined (using CPUC methodolgy and data) that there is a locational benefit of about 35% over wholesale power cost. These are real dollars that WDG power providers and rate payers can split in a win-win cost advantage.

In any region with a decent amount of sunshine, there is no more economic way of reliably providing municipal power during the day than through a municipal solar power plant. That’s because municipal solar power plants combine the locational benefit of avoided transmission with the time-of-day benefit of solar and the economics of scale.

Ground-mounted solar power plants are installed in industrially streamlined ways, with specialized tractors deploying standardized substructure components according to standard system block designs to achieve optimal cost efficiency.

While rooftops are surely a good application too for solar panels, it is a business that’s difficult to scale rapidly in a truly meaningful way. Crawling onto rooftops and mounting solar panels in compliance with building codes is fundamentally always a somewhat less efficient proposition.

In fact, municipal solar power plants are one of the most rapidly deployable forms of power: whereas it takes 10-15 years to get a new coal plant done (if ever given their carbon risk) or 5 years for a concentrating solar-thermal plant (also requiring a connection to the transmission grid), a municipal solar plant can be completed in as little as 12 months.

Furthermore, a unique feature of photovoltaic power plants is that they utilize power inverter electronics with increasingly intelligent features. Enlightened utilities around the world are now recognizing these as a very good way to manage and improve grid power quality. This is especially a point of pain at the outer branches of the electric grid where power quality is hard to manage otherwise. (Any U.S. utility executive who is concerned about the new world of local power but desires to learn more should join this trip.)

Municipal solar power plants offer an attractive level of efficiency, scale, and benefit in solar. This is just not yet known very well to the public in the United States and in California where this segment has been stifled not least by the policy gap that exists in California between the state’s Renewable Portfolio Standard (geared towards >20MW systems) and the California Solar Incentives (designed for <1MW systems).

But towns and cities throughout Europe and Asia have already proven the concept, and more and more — in fact increasingly entire counties — are now implementing plans to go 100% renewable based on a mix of solar and biofuels. It works, it is economic, and it is possible now. It is a silent revolution going on that the press rarely reports about.

[A nice exception is an article today in our local newspaper – “Local communities reach for power over energy” (SF Chronicle) – describing how Marin County in California is wrestling with going for local renewable power. We salute their effort. It is well timed, smart, and shows a lot of foresight. They are on the right track based on what we see happening in our own industry and in energy overall. In a few years, they will have less expensive power than it is available in the rest of PG&E territory.]

The amount of activity going on behind the scenes in readying technologies, sites, and financings for such is tremendous, and this will become very visible to the public in many locations in the United States in 2010. There is a reason why one of the world’s largest power producers invested in Nanosolar.

But now is the time for cities and counties to lay the adminstrative foundation for having their own power, 100% renewable, if they care to make a difference by then.

Update 4/30: Thank you for the hundreds of comments we have received to this posting via email. Our team has read and digested every single of them. To all those of you who are disappointed that our first product is not for residential homeowners, we can reassure you that we do have a fabulous residential solution on our near-term roadmap — one that will bring the utility scale economics of Nanosolar Utility Panel™ technology to homes everywhere and completely redefine how residential solar is done.

 

[fletchisrhsm]

Peak oil is not a theory, it is just the inevitable. Whether or not alternative energies can replace oil quick enough to prevent large problems for the world is debatable.

I agree, spot on.

 

[Anonymous1]

When large scale use of carbon dioxide is used to push up oil, you can begin to worry-not until then imo.

 

[quantumleap]

Dubai's known oil reserves are scheduled to run out by around 2010.

http://www.economist.com/cities/findStory.cfm?CITY_ID=DUB&FOLDER=Facts-History

This is why they are turning to tourism.

 

[artiesliver]

I'm in the industry and Matt Simmons is one of the world's leading experts on energy, so I wouldn't fully discount what he says (even if he is saying it Al'J.

 

[GoSooners]

The truth of the matter is it is very hard to get a completely accurate read on our oil reserves..But 15 years ago the so-called independent study experts predicted it would fall between 2015-2020..But even they are now saying that they underestimated the buildup of the eastern industrialized nations like India and especially China becoming such a transportation dependent society..I guess they got sick of riding their bicycles everywhere..Anyway, most are now saying the peak will come in this next President's first term..Probably around 2010-2012. With all of the impending USA/world disasters and economic mess wating to happen, I don't know why anybody would want to be President of this country..