Ever heard of "Peak Oil?" or "Hubbert's Peak"? Wikipedia's definition:
|The Hubbert peak theory, also known as peak oil, is an influential theory concerning the long-term rate of conventional oil (and other fossil fuel) extraction and depletion. The Hubbert peak theory is named for American geophysicist M. King Hubbert, who created a model of known reserves and proposed the theory. In 1956, Hubbert predicted that oil production in the continental United States would peak in the early 1970s. U.S. oil production did indeed peak in 1970, and has been decreasing since then.|
So... is Saudi Arabia really experiencing 'peak oil'? Some experts believe that's the case:
|Speculation over the actual size of Saudi Arabia's oil reserves is reaching fever pitch as a major bank says the kingdom's - and the world's - biggest field, Gharwar, is in irreversible decline.|
The Bank of Montreal's analyst Don Coxe, working from their Chicago office, is the first mainstream number-cruncher to say that Gharwar's days are fated.
Coxe uses the phrase "Hubbert's Peak" to describe the situation. This refers to the seminal geologist M King Hubbert, who predicted the unavoidable decline of oilfields back in the 1950s.
"The combination of the news that there's no new Saudi Light coming on stream for the next seven years plus the 27% projected decline from existing fields means Hubbert's Peak has arrived in Saudi Arabia," says Coxe, referring to data compiled by the International Energy Association's (IEA) August 2004 monthly report...
...Since , despite pumping around 9mbpd, Saudi Aramco says the size of its reserves have not only remained the same but increased slightly from 258gb to 259gb thanks to better extraction techniques.
However, Simmons believes Gharwar, responsible for about 5mbpd of Saudi output, may have been damaged by poor management.
Pumping large amounts of oil at the maximum rate can damage the geological structure of the field, usually referred to as "rate sensitivity". Basically the hole falls in on itself, making large amounts of oil within it un-extractable...
In other words - by their own admission - Saudi Arabia will have added only 800,000bpd of supply in the next seven years. That is the best-case scenario...