Hoarding is exactly what the government is doing right now by filling the SPR, and frankly it's the best thing that could happen. It drives prices up. High prices encourage demand destruction. They also finance new well development. The hoarded oil gives us a buffer to fall back on once shortages become more prevalent. High prices are what we need in order to adapt to what's coming, and the sooner they happen, the better.
Joined: May 17, 2005 Posts: 386 Location: Northeast Ohio
Posted: Tue Jun 07, 2005 5:18 pm Post subject: 'Twilight in the Desert: ...' Matthew R. Simmons
Yay! Just got my copy in the mail today from Amazon. Still warm from the press. No review yet, but just read the back, he gets great reviews from some respectable figures. Okay, I'm off to go dig in.
Bought it 2 days ago. There is a lot of material to digest, and it's very well documented. I realize I need to prepare for the coming economic downturn more than ever. 99% of the population does not have a clue about what's about to occur. I've told me children and loved-ones what going down, but I feel the only thing that's going to get anyone's attention is a crisis.
99% of the population does not have a clue about what's about to occur.
To be more accurate it is rather 99.9% of the population. So far I have not been successful in truly fitting in the maginitude of consequences of Peak Oil in the dominating patterns of my personal day to day thinking as much as I tried to do so during the last two years.
The effects and consequeces of Peak Oil and the accordgingly unfolding reality are truly incomprehensible on a personal level. Twilight in the Desert is the best PO book available since it is so down to earth and follows analytical thinking that is truly old school. It is not written from a personal level and yet readable as such.
Last edited by albente on Mon Aug 01, 2005 1:22 am; edited 2 times in total
Don't forget...North American natural gas production is reported to be a pending immediate crisis...record, record, drilling yet production stayed flat or, by some accounts, fell slightly.
A hot summer and/or a cold winter and things will be very interesting...
Very high prices...blackouts...mandatory power rationing and fuel switching looming? It'll jolt a lot of people up if that happens.
I don't know if LNG can fill the gap quickly enough...
No reviews yet?? I'm shocked. There are 9 reviews already on www.amazon.com.
I'm half way through with Twilight, and it is great. Hard to put down. Very well written.
I love the beginning of the book. It gives a great, interesting history of Saudi Arabia, its oil production, its politics over the years(Israel, US, etc.), its problems with its populations(unemployment, terrorism, etc.).
Then the book gives a great explanation of each oil field and how they have been produced over the years throughout history(when American companies were involved and now with Saudi Aramco) and how Saudi Arabia has reacted through political events(73-74 Oil Embargo, Iran Revolution, etc) Trust me it doesn't sound interesting but it's actually riveting.
Wonderful descriptions of each oil field. Wonderful descriptions of problems faced in each field throughout their production. It talks about how the fields may have been overproduced at certain times of history and the reasons why. It also gives great basic details of current advanced recovery techniques used to get oil.
I've learned more than I ever thought I would so far. Ghawar has been one bad a-s-s oil field! You'll learn a ton about this King of kings.
I'm a fact person. I like to see facts. They're there. Ghawar and the other giants are in bad shape. Let's hope they don't decline too soon!!!
I got the book last week. This is a pleasure to read and a good one to keep on hand as reference.
I mainly bought the book to learn more specifics about the the oil industry in Saudi--the wells, the technology/processes behind recovering, capacity etc. and of course an analysis of the current and future state of things and how that fits into peak oil.
Simmons adds up meticulously the case of a twilight for Saudi oil. He relies mainly on his expertise and 200+ engineering/scholarly papers from the Society of Petroleum Engineers.
While this is an incredible resource it would have been nice to have some more information and evidence directly from insiders. There are quotes from insiders from published news reports and Opec pronouncements but there doesn't seem to be a turncoat willing to step forward with hard data (except as extrapolated 2nd-hand from the SPE papers). One is hard pressed to expect Simmons to be an investigative reporter interviewing the Saudi Deep Throat--he's an investment banker and energy analyst and he focuses on the only evidence available due to the Saudi Fog--indirect evidence which is digested, cataloged and analyzed like a detective. In the end he makes a comprehensive and compelling case that a Saudi peak may be at hand.
This book may be a little tough to digest at times for people accustomed to lighter reading but it's well worth it.
The first 100 pages of the book is fairly easy history reading, a narrative about the history of oil in Saudi. Of importance in this section is Saudi Arabia's rush to increase production in it's biggest oil fields. This was at a time when future effects of possible overproduction may not have been understood. This may have set the future
The next section of roughly 150 pages gets a lot heavier with helpful charts and illustrations. This is the part of the book I really found most interesting since I don't have a background in geology or the specifics of oil extraction and reserves. Simmons gets into the nitty gritty such as descriptions of the process of oil reserve analysis/data, details on the geology of the wells, drilling methods, types of capacity. There is a full chapter on Ghawar, another chapter on the second tier giants and another chapter on the rest. The following chapters discuss forthcoming exploration in Saudi and natural gas.
Finally the last part of the book ties everything together with the logic of all this comes together ie Aramcos lack of transparency, doubts about reserve claims etc.
I think most people will find this a highly rewarding read.
I've read about 50 pages so far, but the thing that struck me the most is the map of the Saudi Oil Fields. Seeing Ghawar and some of the other super-fields - that still account for most of Saudi production - as little slivers in the Arabian peninsula, really brings home the insanity, and fragility, of our current economic system.
I have just finished reading the book. It looks like all Saudi fields are in some sort of trouble. Peaked or otherwise. The biggest problem is the exessive use of water in the fields. Oil fields collapse quicker when pumped full of water. Simmons couldn't point out any date when Saudi oil production would collapse. It could be anytime.
In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.
During the 1990s it was fashionable to scoff at the notion of limits to growth. A knowledge-based economy was coming into being in which natural resources didn't matter. The future would be driven by a search for new ideas rather than the struggle for control of the planet's assets. We were entering an era defined by information technology, in which rapid economic growth could continue for ever. It was never easy to square this fanciful philosophy with historical reality: the 1990s began with the first Gulf war, which was fought solely to secure oil supplies, and cheap oil was the basis of the prosperity of that feckless decade. Yet somehow or other these facts were forgotten, until Iraq.
With the launching of the second Gulf war, the crucial role of oil in the world economy was exposed. From statements made by a number of its American supporters, it seems clear that the strategic objective of the Iraq war was to enable the United States to withdraw from Saudi Arabia, which had come to be seen as an unreliable ally. According to the game plan, Saddam Hussein would be toppled, Iraq would be pacified in a few months and oil would fall to $10 a barrel. The global economy would then take off in another boom with the US in firm control of the world's second-largest oil reserves.
This was always a far-fetched scenario, and things have not worked out as envisaged. Iraq is a failed state in the grip of an intractable insurgency, and the price of oil is roughly $60 a barrel. The scramble to secure energy supplies is more frenzied than ever. The Great Game has been resumed, not only in central Asia but also in the Gulf. If Iran is attacked by the US in the course of the coming year or so, one reason for this will be to stymie energy supply agreements that Tehran may be planning with America's competitors, notably China and India.
The limits to growth have not gone away. They have re-emerged as classical geopolitics - a condition of continuous rivalry among the great powers for control of the world's most valuable natural resources. In this intensifying struggle, no country is more important than Saudi Arabia. The kingdom is the world's pivotal oil producer. Any disruption in supplies of its oil would be hugely destabilising to global markets. Even more crucially, it is the most important resource base for the oil that will be tapped to meet growing world demand. As emerging countries industrialise, their energy use increases exponentially. Saudi Arabia is the site of the planet's largest low-cost oil reserves, and in effect acts as the energy bank of worldwide industrialisation.
Matthew R Simmons is convinced that Saudi oil production is near its peak, or indeed may have passed it, a development with awesome implications. Simmons, a veteran oil finance insider who has been an important adviser to the Bush administration, has done a huge amount of research and bases his conclusions on carefully sifted evidence, not large theories. Yet his view is consistent with the theory of M King Hubbert, a Shell geophysicist who argued in 1956 that production rates for oil and other fossil fuels exhibit a bell curve: when roughly half the oil has been extracted, production declines. No one took much notice of Hubbert at the time, but he predicted that oil production in the continental United States would peak and start declining in the late 1960s or early 1970s - as it did. Since then a number of large oilfields have also peaked, including the North Sea in 1999. When oil peaks it does not run out - there is usually a slow decline that can be spun out by new technologies - but the unavoidable result is falling production.
Could we be near a global oil peak? Simmons believes that point may already have passed and warns that the idea that technology can arrest the decline may be a delusion. In his view, Saudi oil production has been boosted by the use of technologies which actually reduce the future supply of recoverable oil. The implication is that Saudi production has peaked, and with it global oil production, at a time when demand is rising inexorably.
Twilight in the Desert is not always easy to read. It largely consists of highly technical discussion of the history and condition of Saudi oilfields. Yet its impact is to transform our view of the world. Many in the oil industry - and particularly Aramco, the Saudi oil company - will dispute Simmons's claim that Saudi production is near its peak sustainable volume. For most readers the question will be whether Simmons can be trusted. I am certain that he can. He is not the only oil expert to say that a peak in global production may be near (Dr Colin Campbell of the London-based Oil Depletion Analysis Centre is another) and, unlike many in the oil industry, Simmons has no axe to grind. This is a ground-breaking book by an analyst of unimpeachable authority.
Simmons's analysis suggests that the current phase of worldwide industrialisation is crucially dependent on the uncertain reserves of a single Gulf kingdom facing vast and potentially insuperable challenges. As he shows in a superb digression, the most formidable of these is population growth. The kingdom's current population of roughly 22 million is expected to rise to roughly 50 million by 2030, and unless there is a large and sustained rise in the oil price, living standards are bound to fall steeply - as they have been doing since the early 1980s. The Saudi rentier economy is facing a Malthusian crunch, and against a background of already high unemployment the result so can only be a condition of chronic instability. If the most obvious effect of our dependency on oil is a series of resource wars, another could be an upsurge of revolutionary movements in oil-producing countries. While it would be an error to think that the Saudi regime is on the brink of collapse, in a few decades the kingdom could well be an Islamist republic - or, perhaps more likely given its origin as an artefact of the colonial era, another failed state.
Simmons makes a formidable case for the pivotal importance of Saudi Arabia, but he may actually have understated the impact of peak oil. One reason is the central role of oil in intensive farming. Contemporary agriculture relies heavily on oil-based fertilisers, pesticides and herbicides. At bottom, the green revolution was about the extraction of food from petroleum, and a peak in world oil production could trigger a peak in world food production. A second is climate change. As oil supplies are becoming scarcer and less secure, many countries are looking to other fossil fuels such as coal. New technologies can make coal much cleaner, but a large increase in coal use alongside continuing dependency on oil could magnify the greenhouse effect. In other words, peak oil could accelerate global warming.
The conjunction of peaking global oil production with quickening climate change poses fundamental challenges that no section of opinion has adequately confronted - including the Greens. The energy-intensive lifestyle which is now spreading throughout the world cannot be sustained with non-renewable and polluting fossil fuels, but it is sheer fantasy to imagine that a human population of between six and eight billion can be supported on a combination of windfarms, solar power and organic agriculture. As Simmons notes, we may be approaching the limits of growth that the Club of Rome identified more than 30 years ago, and we are no better prepared to adjust to them now than we were then.
John Gray's latest book is Heresies: Against Progress and Other Illusions (Granta) _________________ --------------------------------
| Whose reality is this anyway!? |
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(-------< Temet Nosce >-------)
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Joined: Apr 11, 2005 Posts: 72 Location: Sin City, NV
Posted: Sun Jul 31, 2005 8:39 pm Post subject:
Great review.
I'm currently in the middle (page 182) and must say that if you're technically inclined, this is a great first "PO" book. It does not focus on PO per-say, but it makes very clear the global impact Saudi Arabia's inevitable oil production decline will have.
Funniest line in the book occurs right after Simmons discusses, in great detail, the problems with Ghawar and begins to touch on the other fields:
"It was tempting to simply offer a general statement to the effect that all the other great Saudi oilfields present the same general challenges that the Ghwar oilfield does, and live it at that with at 'Trust me.' " _________________ " Previous energy transitions were gradual and evolutionary. Oil peaking will be abrupt and revolutionary"
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No review yet, but just read the back, he gets great reviews from some respectable figures. Okay, I'm off to go dig in.
