A Saudi Oil Well dries up

[doom&gloom]

HA HA! wait till 'the fix' on shale really comes home ot roost!

http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100019812/saudi-oil-well-dries-up/

*snip*

If Citigroup is right, Saudi Arabia will cease to be an oil exporter by 2030, far sooner than previously thought.
A 150-page report by Heidy Rehman on the Saudi petrochemical industry should be sober reading for those who think that shale oil and gas have solved our global energy crunch.
I don't wish to knock shale. It is a Godsend and should be encouraged with utmost vigour and dispatch in Britain. But it is for now plugging holes in global supply rather than covering the future shortfall as the industrial revolutions of Asia mature.
The basic point – common to other Gulf oil producers – is that Saudi local consumption is rocketing. Residential use makes up 50pc of demand, and over two thirds of that is air-conditioning.
The Saudis also consume 250 litres per head per day of water – the world's third highest (which blows the mind), growing at 9pc a year – and most of this is provided from energy-guzzling desalination plants.
All this is made far worse across the Gulf by fuel subsidies to placate restive populations.

*snip*

[don]

Re: A Saudi Oil Well dries up

The Saudis also consume 250 litres per head per day of water – the world's third highest (which blows the mind)

Does this factor in the ski slopes

[Southernguy]

Re: A Saudi Oil Well dries up

Bold and underline are mine: PCO now MS.
SG

"From Heidy Rehman at Citi:

• Saudi Arabia Could be an Oil Importer by ~2030 — Saudi Arabia is the world’s largest oil producer (11.1mbpd) & exporter (7.7mbpd). It also consumes 25% of its production. Energy consumption per capita exceeds that of most industrial nations. Oil & its derivatives account for ~50% of Saudi’s electricity production, used mostly (>50%) for residential use. Peak power demand is growing by ~8%/yr. Our analysis shows that if nothing changes Saudi may have no available oil for export by 2030.

• It Already Consumes All Its Gas Production — Saudi Arabia produces 9.6bn ft3/day of natural gas. This is entirely consumed domestically. It is looking to raise gas production to 15.5bn ft3/day by 2015E, implying a 2011-15E CAGR of 12.7%. However, peak power demand is growing at almost 8% pa. We believe Saudi Arabia will need to find new sources to meet residential & industrial demand.

This may concentrate a few minds in The Kingdom. The country is already planning an 80GW nuclear blitz though they are woefully short of nuclear power experts.
It has big hopes from solar projects based on successes of solar farms in California. Both nuclear and solar would allow it export more of its oil output.

A great deal could change. New desalination filters should reduce energy use drastically, for instance. Saudi fuel subsidy policies may change.
While I don't wish to judge the claims of this report – I merely pass it on to readers since I don't know enough about the Saudi system – but it is yet another piece of evidence pointing to Peak Cheap Oil.

Jeremy Leggett, the head of the UK Taskforce on Peak Oil and Energy Security, says Britain is sleepwalking into a potential disaster by failing to prepare fully for a global supply crunch.
The refusal to listen to warning signals is comparable to the complacency in the build-up to the financial crisis, he argues, but with graver implications for the British economy.
I agree."

[LorenS]

Re: A Saudi Oil Well dries up

A fair bit of middle east oil consumption could be offset by other means of electricity production (solar, nuclear). Which is why Iran has a legitimate interest in nuclear power. Weapons grade fuel is not my specialty, but I think that if we could set them up with pebble bed reactors that should satisfy their legitimate interests while still discouraging weapons production.

Pebble bed fuel is pretty useless for weapons, correct?

[Ghent12]

Re: A Saudi Oil Well dries up

"We" should set them up? I think maybe "we" should set up our own infrastructure first.


Also, I'm still not sold on the "peak cheap oil" hypothesis. It definitely would appear on the surface to be doom and gloom for petroleum, but it has appeared that way for decades now. What has actually changed? Both technology and "proven reserves" seem to be keeping pace, at least enough to avoid shortfalls and the like over the medium term.

[gwynedd1]

Re: A Saudi Oil Well dries up

A fair bit of middle east oil consumption could be offset by other means of electricity production (solar, nuclear). Which is why Iran has a legitimate interest in nuclear power. Weapons grade fuel is not my specialty, but I think that if we could set them up with pebble bed reactors that should satisfy their legitimate interests while still discouraging weapons production.

Pebble bed fuel is pretty useless for weapons, correct?

At the rate we are going, Iran is going nuclear one way or another.

[gwynedd1]

Re: A Saudi Oil Well dries up

Sometimes I hope we are running out of oil. At least then I could pass off this engineered economic slump as the act of enlightened oligarcs trying to restructure the economy.

[sunpearl71]

Re: A Saudi Oil Well dries up

A fair bit of middle east oil consumption could be offset by other means of electricity production (solar, nuclear). Which is why Iran has a legitimate interest in nuclear power.

You can also add Wind as another means of electricity production that Iran is looking seriously. My previous neighbour, who worked for a UK Wind turbine company, used to travel to Iran very frequently last year as his company had a number of projects there.

[gwynedd1]

Re: A Saudi Oil Well dries up

"We" should set them up? I think maybe "we" should set up our own infrastructure first.


Also, I'm still not sold on the "peak cheap oil" hypothesis. It definitely would appear on the surface to be doom and gloom for petroleum, but it has appeared that way for decades now. What has actually changed? Both technology and "proven reserves" seem to be keeping pace, at least enough to avoid shortfalls and the like over the medium term.

There is also a real amount of tightening that could happen. American cars are enormous. Diesel is about a 3rd more efficient. In reality we could cut the fuel consumption by half. No, you really don't need that overnight etc.

[BadJuju]

Re: A Saudi Oil Well dries up

There is also a real amount of tightening that could happen. American cars are enormous. Diesel is about a 3rd more efficient. In reality we could cut the fuel consumption by half. No, you really don't need that overnight etc.

Definitely. When push comes to shove, you adapt. I don't drive a car and nor have I ever.

[Ghent12]

Re: A Saudi Oil Well dries up

There is also a real amount of tightening that could happen. American cars are enormous. Diesel is about a 3rd more efficient. In reality we could cut the fuel consumption by half. No, you really don't need that overnight etc.

Well some careful consideration should be done in terms of air quality if switching to diesel en masse. But that has nothing to do with the fundamentals of the petroleum industry, which seems to always discredit Malthus. You're right.

[aaron]

Re: A Saudi Oil Well dries up

Malthus ---> if he was right, and it sure seems that way, then we should be in for a big crash/mass starvation in the world. The food we eat comes from oil. A couple nukes dropped in the ME and that Malthusian population crash will happen. Or a solar flare knocks out electronics. That'll do it too.

[BadJuju]

Re: A Saudi Oil Well dries up

Malthus ---> if he was right, and it sure seems that way, then we should be in for a big crash/mass starvation in the world. The food we eat comes from oil. A couple nukes dropped in the ME and that Malthusian population crash will happen. Or a solar flare knocks out electronics. That'll do it too.

It isn't right, though. It ignores simple things like conservation or alternative sources of energy or the massive supply of oil that exists that simply isn't cheap. Contrary to popular thought, little of the oil we consume is used for agriculture. 60-70% of the world's oil consumption goes towards PERSONAL transportation. Much of the rest goes towards commercial transportation. And of the oil that goes to agriculture, most of that goes to livestock which uses far, far more energy. The scenarios you posted are the kinds of things that would be devastating regardless. Peak oil is bunk and has been proven to be bunk. With all due respect, I think people need to take another look at what EJ has written on PCO.

[Ghent12]

Re: A Saudi Oil Well dries up

Malthus ---> if he was right, and it sure seems that way, then we should be in for a big crash/mass starvation in the world. The food we eat comes from oil. A couple nukes dropped in the ME and that Malthusian population crash will happen. Or a solar flare knocks out electronics. That'll do it too.

There is no reason to believe in a Malthusian doomsday at all. Mass starvations occur, in the past few centuries at least, almost entirely as a result of policy which disrupts distribution of food. It wasn't some drought or plague that caused starvation in Ireland during the Potato Famine, it was British policy. Nor were natural causes to blame for the largest starvations in history in Mao's China. Diseases and plagues occur all the time, but starvations occur because of political reactions to such things or for other arbitrary political reasons.

There is already a substantial amount of per-acre inefficiency on American farms that can be reduced as much as it is economical to do so. This is because American farmland is far more valuable than the labor that works on it (even including immigrant labor), as compared to Europe which has higher per-acre farm efficiency because of the relative scarcity of land. It is the people which supply the food, and not the other way around. One thing that seems to be absent all these doomsday predictions is the effect that population has on technology--more people means more brains and more specialization which applies as much to energy as it does to food. Malthusiists have seemingly no reply, other than the old "wait and see, we're doomed!" which is tired and perpetually discredited.

Human population numbers are at a far greater danger from natural causes such as asteroids or from policy decisions such as communism or world wars. "Running out of resources" will only happen if government policies promote that result, rather than allowing people to resolve human issues.

[DSpencer]

Re: A Saudi Oil Well dries up

One thing that seems to be absent all these doomsday predictions is the effect that population has on technology--more people means more brains and more specialization which applies as much to energy as it does to food.

This is an interesting thought, but there seems to be quite a few limits to this idea. For one thing, technology still relies on resources including raw materials. Despite any potential gains in technology I'm still inclined to believe that earth couldn't support 1 trillion people. Also, I don't think the number of people working on new technology is increasing at the same rate as the population.

Certainly there is correlation between population and technology but I believe that better technology does more to cause higher population than the other way around. I also believe better technology does more to improve future technology than more people does. Otherwise I would expect India and China to be leading the world in technological breakthroughs.

Just to be clear: I'm not making these arguments in support of some kind of Malthusian doomsday scenario. They are just interesting thoughts to consider.