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The two key lines are the dotted rust-colored line -- which shows declining production from the world's largest oil field -- and the spiking green line, which shows a frantic expansion of oil rigs to try to keep the field producing crude oil. Even if this strategy were successful, logic says that this super-giant oil field is getting more and more expensive to run. But it does not appear to be succeeding.
You might also notice the odd horizontal blue line -- "Proven reserves". In a chart with lots of spikes up and down, odd how that line doesn't move, isn't it? De Nial ain't just a river in Egypt -- it seems to be characteristic of the Saudi government's oil policy.
Also note the second graph on the page I link to. It shows that Ghawar is currently about 50% of Saudi Arabia's total production. That's how big this one field is.
As Matt Simmons writes about in "Twilight in the Desert," the stark reality is that Ghawar is symptomatic of the other giant Saudi oil fields. These huge fields have been in production for over 50 years, and they are nearly tapped out. The decline in production at these fields is predicted by many to be rather shocking. I think this chart shows that this is what we're seeing now.
The upshot of this post is that Saudi Arabian production is going to decline by millions of barrels/day (it's currently around 8 million barrels/day) So, $5/gallon gasoline is right around the corner. Dump your guzzlers now, while they still have resale value.
More later on other implications of the collapse, which is apprently impending.
1 comment:
Mexico's largest fields (where we get more oil that we do from the Saudis) have been in decline for awhile now, and worldwide production has been "past peak" for at least a year now. I guess we'll see if $90-100/barrel oil is enough market incentive for more oil to magically appear.
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