It seems to me that the first rule of being in power is job security, not that your comments contradict this. But your early-on emphasis on maximising profit might not be the key consideration.

Is it reasonable to suggest that the Saud Family is principally facing an existential crisis (or a percieved one, if there is any difference) at this point? So the balancing game and the swings up and down of supply offerings might be the 'dance done to prolong the dance itself'.. Or at least until some other solution presents itself.. and there one is again advised to be careful what one wishes for, in case what 'presents itself' is a geologically imposed energy-sanction.

Of course, the decisions a manager makes would ideally be based on good, detailed oilfield information, which we here lack, it seems. But to read back from the actions we see, I have to first ask whether they are guided by Adam Smith and those market economics assumptions, or if other priorities and endgames (besides 'maximise shareholder value') are at play in the decision process.. I think 'maximum profit' is a security blanket in western thought, even if it, like the 'security' of carrying a handgun, may not be as guaranteed as one wants to believe.

Bob Fiske

Robert, let's try this step by step.

I don't see what the Saudi's have to gain from announcing either their true reserves, or the fact they they have passed peak. When we say Saudi's, let's be clear we mean the House of Saud, not the country, by the way, a difference that may yet come home to roost.

I'm guessing the present situation serves the Saud House just fine. If we presume that their stated reserves are not accurate, they have information that others don't, and can build future policies on that. Very helpful, both politically and economically, to know more than others. Their present position doesn't depend on what they really have, just on what people believe they have.

A Saudi peak announcement can lead to global economic panic, something that, today, most likely wouldn't be good for them, or their US buddies. Prices may go up, but they may plunge as well, better keep the economy quiet and rolling in a steady stream of income.

Admitting that they have less than stated reserves might cost them face and status, both abroad, just look at OPEC, and at home, where the House of Saud is tolerated only beacuse of oil revenues.

What's best: an aura of unlimited profits, or one of large, but limited ones?

So no, I don't see what they have to gain by coming clean. But maybe you see things I don't.

Robert, very good post, thanks. But I have a question. Now I know you really do not know what Saudi's true crude reserves are. None of us do. But we all have our suspicions. Here are a few guesses that were current on February 20, 2006:

Oil & Gas Journal....................264.3 billion barrels
BP Statistical Review..............262.7 billion barrels
Colin Campbell.........................159 billion barrels
Dr. A.M. Samsam Bakhtiari...120 to 140 billion barrels
Ron Patterson..........................70 to 80 billion barrels
Robert Rapier..........................???
Anyone else who would venture a guess. ????

I realize you may be reluctant to venture a guess, but please do. Let’s suppose for a moment that there was a way to accurately measure Saudi’s reserves. (Although we both know there is not.) And then suppose this were a contest and the one with the closest guess would win a million dollars. What would be your guess? Okay, my guess of 70 to 80 billion barrels is not specific enough so I would guess 75 billion barrels.

Ron Patterson

Robert,
Ther House of Saud is a family of 5,000 oligarchs who "own" the largest production in the world. If they admit to peak oil their 20 mm subjects will realise how badly they've been cheated, and a bloodbath will likely follow to rival the Bolshevic or French revolutions. Also, the US dollar will really and truly collapse and their US Bonds, stocks and real estate become illiquid and possibly worthless.
If I were King of Arabia, I'd probably lie as long as possible about the true state of the reserves and production while rapidly selling as many US assets as possible without an abrupt collapse in the price of the US dollar. I'd buy gold as quickly as possible, and I'd try to make allies in the Islamic Fundementalist movement by giving them financing and refuge in my territory in the hopes they'd stave off beheading my family when the Islamic poop hits the fan.
Isn't it funny that this seems to be whats happening?

But wouldn't an announcement of peak and impending decline be just the thing to catalyze a worldwide scramble for alternatives?

It might not impact the House of Saud (and Big Oil) in five years but in ten, fifteen, or twenty, it would certainly cut something off the hoped-for long, profitable tail.

Also, as others have, I raise the point of political instability -- rulers who once appeared to be beneficial parasites but, in the absence of future oil revenues, are seen only as parasitic might have to skedaddle to Montreux or Dubai years ahead of schedule.

On the subject of US inventories, it has been reported that they're high. Compared to three or four years ago, they certainly are. On the EIA website, though, inventories in 1982 were even higher than today.

What's so important about the five year average as opposed to a longer timeframe?

Robert, Have you been talking to Dmitry ?

"If the challenge is to avert planetary self-destruction, then let's all get on the same page: formulate a project plan, define the next steps, and start executing." Then you realize that the person you are talking to is serious, and the situation becomes awkward. "

Good luck with the "if I were king" excersizes in intellectual masterbation.

Batten the hatches and take stock of your Profound Locale folks...

Your analysis is like one that seems similar to classical economics in its assumptions that people act in a rational fashion. While I suspect there are fairly strong tendencies in KSA to try and deal with the oil issue in a rational way, one would have a tough time trying to sell the idea that the Saudis are 'rational' in a larger sense, unless you consider the medieval feudal kingdom structure of their society to be a rational one.

My own expectation would be that there might be a fair amount of rationality among high-level policy making people in KSA (including King and main Princes), but that there are strong currents of irrationality at lower levels represented by the level of petro-engineers who may (or may not) have a much more accurate grasp of what the overall oil picture is vis-a-vis depletion and spare capacity. And these people are who the policy-makers depend on for the... well, policy making. I see no reason to believe that, at this oil-engineer level, one would find any more rationality or acumen than one would find in say the engineers who predicted the North Sea would sail along until 2010 at max levels, or any similar such group. Look at the Exxon thread and their broad dismissal of PO based on tar sands and 'oil shale.' In fact, if one considers the Exxon and other US-based oil companies as occupying an analogous position in the US as the ARAMCO people occupy in KSA, you would likely get a very optimistically skewed picture of US oil capacities and capabilities. As WT has pointed out, there are even a few who still insist the US has not yet passed its peak.

I see no reason whatsoever to believe that the ARAMCO people are somehow more capable of delivering a true picture of their oil situation than are the US oil industry people.

Saudi Arabia is an interesting and important country for a number of reasons. It's history as a nation is short and intertwined with the recent history of the United States to a remarkable degree. Going way back, it appears that President Rooseveldt made a deal with the Suadi royal family, which was as simple as it was profitable. The United States would support, protect and co-opperate with royal family, with military force if necessary, in return for Saudi oil. In reality Saudi Arabia became a U.S. protectorate and valued partner. There have been ups and downs in the relationship and friction, but basically the alliance has held for the last sixty years.

Saudi Arabia has gone through enormous changes during the last fifty years. Population growth has been dramatic. Six, seven, eight children are the norm. Saudi has one, if not the fastest growing populations on the planet. I believe currently the Saudi population is growing a over 8% a year! The population is also one of the youngest in the world. With a substantial majority under thirty. Unemployment is massive. Estimates vary between twenty and thirty per cent. Good jobs are hard to find, without the right connections. At the same time there are hundreds of thousands of young people with excellent qualifications who are frustrated and increasingly bitter and angry at how their country is governed or perhaps that should be miss-governed.

At the same time as unemployment has grown the living standards for the majority of subjects has fallen substantially. The oil revenues simply can't keep pace with the rapid growth in population.

At the same time as many young Saudies have received educations abroad, they return to a society which is still basically fuedal in its social and political structure. In truth all normal political activity is banned as we would recognise it in the west. About the only "safety valve" where one can express ones discontent is through religion.

The Saudi Royal family, which the United States has promissed to support, is fabulously wealthy, but ridden with strife and factions. The different factions appear to balance each other out, leading to something close to inertia and making "reform" impossible.

Saudi is a country sitting not only on oil, but also on an enormous powderkeg, which could explode at any moment, given the smallest of sparks.

Civil strife or a revolution in Saudi Arabia would draw in the United States almost immediately. It's almost a paradox that whilst Saudi appears "stable" it is also incredibly dynamic, like a pressure cooker waiting to blow.

"Reformists" in the royal family are aware of the enormous problems they face, how on earth do they placate and control the legitmate asperations of their subjects, firstly by creating jobs, without releasing powerful social forces that might sweep the monarchy away. The Saudi royal family are balancing on the edge of a sword.

If it's true that the royal family have wasted the nations oil legacy and reserves are far less than normally assumed, this would function as the spark that would lead to an explosion in Saudi Arabia that would have implications far beyond its borders.

Yep.

Thats about right.

Rule number 1:

Maximise the return on your assets

As would any good family business. (which is all KSA really is).

Russia is doing the same BTW. - Cannot blame them for learning Capitalism... we showed them how.

The boot is on the other foot and its kicking...

I agree with this Robert. But doesn't this kind of logic apply only when you know that you are cose or very close to your peak production?

Hi Robert. I agree completely with the bulk of your story, however, I believe you are wrong that the Saudis would admit to being post peak. I invite you to reconsider this point, based upon the following considerations.

RR wrote:

If my oil production has peaked, I think I would admit it to the world. I would be glad to admit it. I explain to my country that even though production has peaked, we will still be producing a lot of oil for many more years, and now we will get an incredible premium because of the pending supply/demand imbalances. The coming years will be prosperous indeed.

The thing to note is that the consequences for admitting peak occur regardless of whether peak has actually occurred. That is, if admitting peak makes for a prosperous future, it might also be the case that talking up peak prior to actual peak (ie. claim "we may have peaked" when they know they haven't) might also bring a prosperous future. According to your narrative, there appears to be no sensible reason why the profit maximizing time to admit to peak should coincide with the actual peak itself.

If you want to claim that the Saudi's would admit to peak when it occurred, and attribute this to a profit motive, then you need to explain why talking up peak early, or admitting it late, would not produce even better profit outcomes. There appears to me no obvious reason why this would be the case.

Therefore, if we accept profit sensitivity as the basis for the narrative (which I do), then it appears likely that the Saudi's would not admit to peak, for the simple reason that they have been so keen to keep their actual position with regard to peak occluded for so long. The timing of actual peak bears no relation to the appropriate time to admit peak within the context of maximizing profit. They are likely to keep their actual oil position occluded until which time they deem it profitable to reveal. There is no obvious reason why this time should coincide with the actual peak of oil production.

I think I just said the same thing about 4 different ways, but I hope it ended up being quite clear.

If I were king I would do exactly what they are doing... I would see denial as both maintaining demand for the last possible moment and, meanwhile, I would not be so sure I would mantain my uneasy perch on the throne if all my citizens realize over half our treasure has been spent, with no huge fund set up for future generations. The ungrateful wretches might even think I was in some way responsible. Anyway, if I had any thought of coming clean, the rest of the royals would remove me in a flash.

It has long been lucky that the majors, who are well aware of the exact sa situation, are looking at the dismal future from the same perspective. Consider the current xom chair... will he be voted hundreds of millions in retirement - as was his predecessor - for his valuable services if shareholders begin to focus on declining reserves everywhere? Even worse, might shareholders and/or the board revolt as they realize he is not successful in replacing reserves? His clear incentive is to deny as long as possible.

Regarding price, even common knowledge that less oil will be produced in the near future will not necessarily affect price much - the laws of supply and demand will still hold. If production stays in balance with consumption then price will not move much... once storage tanks are full refiners simply can't buy any more to store for future needs, and their lack of buying will lower price. Consider gold... we are far past peak gold, but price has not come close to inflation over the past decades. Of course, some exporters might choose to export less, and future prices will almost certainly climb.

I wonder if there are any details on how he is doing this. I would imagine the sugar content in Kudzu is very low, which is why he is having trouble getting results. You need a cellulosic process for this, but that is well beyond your average high school science project.

To conduct his experiment for the science fair and beyond, Tyler had to build a still. But before he could do that, Jablon had to fill out application forms with the U.S. Department of Revenue in Cincinnati for a federal permit to build a still on the school campus.

I had to do something similar in grad school to synthesize TNT. I went through a lengthy process with the ATF. For some reason, they get really suspicious if you want to make TNT. :)

Dear Don,

Calm down, get a grip... at least I believe that's the rhetorical trick one uses to frame one's opponents.

Methinks it's time to batten down the hatches and tighten the riggin' there be choppy waters and dragons ahead! Pull in that bowline and splice the mainbrace, boys!

I was talkin' to a tar the other day, in a tavern over a cup of grog, who actually took part in crunching numbers for U.N. in minor though not insignificant capacity.

According to him the report on climate change is a compromise. So many countries were involved and so many different interests, that one spent literally months debating the meaning of single words. Single words. What did these words mean in different languages and how could one translate them and agree on which language would form the basis of the final document. This was apparently a long, tedious and exhausting experience for all concerned.

What I'm getting at here is that the report is a very "Political" document. That is it is "Compromise". What can we all, or most of us, agree on without coming to blows!

My friend mentioned that a more "radical" group of younger climatologists are privately tearing their hair out because they think the official report isn't strong enough, basically we may be rapidly getting close to various tipping points sooner than most people realise. That we may be heading for a rise of four degrees in fifty, not a hundred years, but keep that to yourself and don't tell the kids.

Fair winds be with you always, shipmate!

You are right to bring this up.

The IPCC is essentially a commitee.

Committees (In my experience) tend to find for a result that tends towards an average:

Neither too conservative or too extreme.

They want to appear sufficiently concerned but not be blamed for panic. This is always true where predictions are concerned.

May be two thirds of the time, a committee gets it two thirds right.

But it is worth pointing out that a Camel is in fact a race-horse designed by a committee..

Committees, like modern business is now addled with Group-Think.

Trouble is, such committee systems are particularly bad in dealing with tip-points and the possiblity of chaos as a variable.

We are in uncharted waters.

And committees rarely make for good leadership.

HOWEVER!!!
On othe op-ed page (same day) is a piece by Philip Stott suggesting that 75% of global warming is caused by cosmic rays! I'm not making this up! I'll paste it here and hope WSJ doesn't get upset.

COMMENTARY

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Political Science
By PHILIP STOTT
February 3, 2007; Page A11

I confess I was afflicted by a profound world-weariness following the release yesterday of the latest gloomy machinations from the Intergovernmental Panel on Climate Change (IPCC). The U.N.'s global-warming caravanserai, founded in 1988 by the World Meteorological Organization and the United Nations Environment Program, had this time pitched camp in Paris, in order to issue the "Summary for Policy Makers" relating to Working Group One of its "Fourth Assessment Report: Climate Change 2007." This is the group that focuses on "The Physical Science Basis" of climate change, and its summary was greeted with the usual razzmatazz, the Eiffel Tower's 20,000 flashing bulbs being symbolically blacked out on the evening before. Further IPCC reports are due this year, one in April from Working Group Two, on the impacts of, and adaptation to, climate change, and another in May, from Working Group Three on climate-change mitigation.
[Illustration]

But it is the science summary that always gives rise to the jamboree -- with journalists, politicians and eager environmentalists desperate to claim that this particular report is the last word on climate change, that it represents a true consensus, that the world is doomed, and that we must recant our fossil-fuel ways. Moreover, as in 2001 with the Third Assessment Report, Friday's release was preceded by speculative leaks, the political shenanigans and spinning beginning even before the final text had been haggled over and agreed upon.

Unfortunately, the IPCC represents science by supercommittee, as rule 10 of its procedures states: "In taking decisions, and approving, adopting and accepting reports, the Panel, its Working Groups and any Task Forces shall use all best endeavors to reach consensus." I bet Galileo would have had a rough time with that.

In this context, it is vital to remember that science progresses by skepticism and by paradigm shifts: A consensus early last century would have given us eugenics. Moreover, the IPCC does no original research, nor does it monitor climate-related data; its evidence is instead from selected secondary sources. But, above all, this supercommittee is more political than is often recognized, rule three firmly reminding delegates that: "documents should involve both peer review by experts and review by governments."

Friday's summary and "best estimates" of temperature-rise by 2100 (as compared to preindustrial times) are thus little more than a committee compromise chewed over by governments with different agendas: an average potential rise of three degrees Celsius (up from 2.5 degrees in 2001); a probable rise of between 1.8 to 4 degrees; a possible rise of between 1.1 to 6.4 degrees. So you can take your pick, also bearing in mind that there are groups outside the IPCC predicting cooling by one or two degrees Celsius. Moreover, the conclusion that climate changes seen around the world are "very likely" to have a human cause is wonderful Alice-through-the-Looking-Glass talk.

Unsurprisingly, the report will please neither a Humeian skeptic nor a rabid apocalyptic. Indeed, even before it appeared, environmentalists were incensed that predictions for the rise in sea levels this century have been lowered to between 28 and 43 cm (11 to 17 inches). They want the polar bears to be drowning now!

For the skeptic, however, the problem remains, as ever, water vapor and clouds. Enormous uncertainties persist with respect to the role of clouds in climate change. Moreover, models that strive to incorporate everything, from aerosols to vegetation and volcanoes to ocean currents, may look convincing, but the error range associated with each additional factor results in near-total uncertainty. Yet, there is a greater concern. Throughout the history of science, monocausal explanations that overemphasize the dominance of one factor in immensely complex processes (in this case, the human-induced emissions of greenhouse gases) have been inevitably replaced by more powerful theories.

Worryingly for the IPCC's "consensus," there is a counterparadigm, relating to the serious uncertainties of water vapor and clouds, now waiting in the wings. In the words of Dr. Henrik Svensmark, director of the Center for Sun-Climate Research at the Danish National Space Center: "The greenhouse effect must play some role. But those who are absolutely certain that the rise in temperatures is due solely to carbon dioxide have no scientific justification. It's pure guesswork." A key piece of research in this emerging new paradigm was published in the Proceedings of the Royal Society A (October 2006): "Do electrons help to make the clouds?"

Using a box of air in a Copenhagen lab, physicists managed to trace the growth of clusters of molecules of the kind that build cloud condensation nuclei. These are specks of sulfuric acid on which cloud droplets form. High-energy particles driven through the laboratory ceiling by exploded stars far away in the galaxy -- cosmic rays -- liberated electrons in the air, which helped the molecular clusters to form much faster than atmospheric scientists have predicted. This process could well explain a long-touted link between cosmic rays, cloudiness and climate change.

The implications for climate physics, solar-terrestrial physics and terrestrial-galactic physics are enormous. This experiment ties in elegantly with the work of certain geochemists and astronomers, who for some time have been implicating cosmic rays and water vapor, rather than carbon dioxide, as the main drivers of climate change. Indeed, they have put down up to 75% of all change to these drivers.

Cosmic rays are known to boost cloud formation -- and, in turn, reduce earth temperatures -- by creating ions that cause water droplets to condense. Calculating temperature changes at the earth's surface -- by studying oxygen isotopes trapped in rocks formed by ancient marine fossils -- scientists then compared these with variations in cosmic-ray activity, determined by looking at how cosmic rays have affected iron isotopes in meteorites. Their results suggest that temperature fluctuations are more likely to relate to cosmic-ray activity than to carbon dioxide. By contrast, they found no correlation between temperature variation and the changing patterns of CO2 in the atmosphere. But the mechanism remained far from understood -- until last October, that is, when the team in the Copenhagen lab may have discovered it.

Who knows where this exciting research will lead? What it unquestionably shows, however, is that the science of climate change is far from settled, and most certainly not by a government-vetted committee policy "summary" from a U.N. supercommittee.

The inconvenient truth remains that climate is the most complex, coupled, nonlinear, chaotic system known. In such a system, both "doing something" (emitting human-induced gases) and "not doing something" (not emitting) at the margins are equally unpredictable. What climate will we produce? Will it be better? And, if we get there, won't it, too, change?

This is the fatal flaw at the heart of the whole global-warming debacle. Climate change must be accepted as the norm, not as an exception, and it must be seen primarily as a political and economic issue, focusing on how best humanity can continue to adapt to constant change, hot, wet, cold or dry. The concept of achieving a "stable climate" is a dangerous oxymoron.

We must hope that IPCC Working Group Two on adaptation will set a wiser agenda in their April report.

Mr. Stott, professor emeritus of biogeography at the University of London, is co-editor of "Political Ecology: Science, Myth and Power" (Oxford University Press, 2000).
URL for this article:

Wow...those are awesome pictures. Really puts a face on the industry...worldwide.

The ASPO has been saying that "regular oil" peaked in 2005 for several years now. Is there any statistics out there to confirm this? For the ASPO, "regular oil" does not include heavy oil or deepwater. I would guess that none of the major agencies keep statistics for these separate categories, correct?

In this issue, the ASPO claims that the minor middle east producers-- Bahrain, Dubai, Oman, Qatar, Sharjah, Syria, Turkey, and Yemen--peaked in 2000. Does this jibe with your database Khebab?

Can anyone think of a reason the report on climate change and the one on suggested solutions should be decoupled?
It's just the way it's been set up from the start, there's different groups working on different aspects. Phase one is only science findings.
This need not be so bad, it gives the writers and thinkers an idea of what they'll be up against when formulating their recommendations for adaptation etc.

IPCC website
Working Group I "The Physical Science Basis"

Acceptance and approval at the 10th Session of
Working Group I, 29 Jan - 1 Feb 2007, Paris, France
Information for participants
Release: 2 February 2007

Working Group II "Impacts, Adaptation and Vulnerability"

Distribution of final draft report 22 December 2006
Letter to governments - comments on SPM invited by
16 February 2007
Acceptance and approval at the 8th Session of
Working Group II, 2-5 April 2007, Brussels, Belgium
Information for participants

Working Group III "Mitigation of Climate Change"

Distribution of final draft report 12 Feb 2007
Acceptance and approval at the 9th Session of
Working Group III, 30 April - 3May 2007,
Bangkok, Thailand
Release: 4 May 2007

TonyF: "Can anyone think of a reason the report on climate change and the one on suggested solutions should be decoupled?"

The earliest GCM's started their computer runs in July 2004. It takes several weeks for most of the runs. These results then had to be backtested and revised. As the final info was compiled, the info was passed to the other Working Groups. There was no point in holding the results "secret" any longer 'cuz much of the science is published. Maybe not free, but available to the science fraternity none-the-less. More than a couple of thousand scientists are involved in screening out the bad and junk science submitted.

The release of the base science allows discussion to commence that is based on the best data whereas holding it back allows the bad and junk science reports to dominate the debate. AR3 is the fourth in a series of five year Reports by the UN.

One only has to look at the TOD threads over the last 60 days to see why the early science release is necessary. Al Gore type exaggerations were flourishing and polarizing the debate. This same process was happening in many venues.

Blanchard's comments about CTL were interesting. He estimated that for the US to produce 10 mbpd of petroleum from coal would require the US to quadruple its coal production rate from one billion tons per year to four billion tons per year. I assume that he accounted for the increased diesel consumption related to the four fold increase in mining.

Note that his 2010 world peak estimate is contingent on Saudi Arabia not peaking before 2010, which brings us back to the same point--if Ghawar is in terminal decline, Saudi Arabia has peaked, if Saudi Arabia has peaked, the world has peaked. And so far, Saudi Arabia is declining--as predicted by the HL model.

The fact that "environmental activists" have predicted things in the past and they have not materialized has NO EFFECT on the probability of peak oil happening.

Interesting philosophical point. Bayesian Probability, anyone? It might not affect the probability that it has already happened (I prefer the word likelihood), but wouldn't a long run of mis-calling the peak affect the weight that you give to their claims, relative to other evidence, when you make your own estimate of the likelihood?

Just asking!

PUD

waffe, as we see with a broken clock (right twice a day) or with cnn's calling that a Recession started last month (they were right on the 29th successive month finally), eventually Peak Date will be upon us.

The legitimate and recognized forecasts started in 1974 when m king hubbert called for a Peak Date of 1995 with a record Supply Rate of 110-mbd. For two years this was in most of the major magazines including Nat'l Geographic. This was followed by failed predictions for 1996, 1997, 1998, 1999, Y2k, 2001, 2002, 2003, 2004 & 2005.

There is some validation for Peakists being regularly dismissed...

I see Orlov as the FSU's Kunstler, but not as condescending. Does he have any books out?

Ringhals 1 and Ringhals 3 are not sister reactors. Ringhals 1 is a BWR built by Asea-Atom and Ringhals 3 is Westinghouse PWR.

But Forsmark 1 and 2 are sister reactors.

There has been a lot of media activity this week in Sweden after an internal report were leaked from the Forsmark plant. In short it were a critizism of a deteriorating security culture. It suprised a lot of people since Forsmark has been very good at this. I guess they soon will be very good again. Wonder if there is a new generation of managers and other staff that needs to relearn old lessons? But that is pure speculation.

Forsmark had already decided to postpone the scheduled and extensive uprating work for one year to work with internal procedures and so on, the internal work started well before the media exposure.

This shut down in Forsmark gives me an impression of an internal audit finding that a low maintainance component had not been properly inspected and tested.

deleted

I liked that bit, too. He does have a way with words.

And it's true. There really are perfectly intelligent and well-educated people, even peak oil aware ones, who think we can continue the never-ending growth party by expanding the service-based economy. We'll all just sit at home telecommuting, selling each other insurance or writing computer programs.

Dmitri Orlov is a character right out of Dostoevsky's Possessed! (also translated as The Devils or Demons)

The first time I read one of his essays the hair rose on my neck with the shock of recognition. He is made in Russia like you wouldn't believe.

Many Russians will tell you that Dostoevskian characters simply don't exist or don't exist anymore. Oh, do I ever disagree. Our own InfinitePossibilities is another wonderful specimen -- if I don't miss my guess.

"matosi adonha" -- where dung falls in abundance. Or if you prefer: the US Govt's trickle down economics.

1, is it possible that the Saudis are using their volontary cut in production to (secretly) stock up? And the reson for this might be either to mitigate the effect of a "seriuos-event-this-spring-in-a-adjacent-country" (i.e just across the "bay") AND/OR be using such inventorys to further hide their peak (production or geology)?

newBurger...welcome to TOD and yes, I think your #1 scenario could very well be a reality. They could keep some in reserve for "emergencies" or just to wait until prices pick back up for a higher profit.

When we lived in Christchurch, NZ, we had among our neighbors a Finnish couple who spent the southern hemisphere summer golfing and hiking down under and then, come April, headed back home for northern spring and summer. Family came and visited for a few weeks around the holidays. They also still had their summer cabin outside Helsinki, of course. When I asked them why the had a summer place way down in Christchurch, they said in a perfect deadpan it was because there were too many Swedes in Nelson. (It took me a minute to get the Finnish humor.)

According to Indo.com, that's 10,662 miles each way. Since the flight is usually via UAE or US/London, the flight miles are considerably longer.

1, is it possible that the Saudis are using their volontary cut in production to (secretly) stock up? And the reson for this might be either to mitigate the effect of a "seriuos-event-this-spring-in-a-adjacent-country" (i.e just across the "bay") AND/OR be using such inventorys to further hide their peak (production or geology)?

NewBurger, not likely. The Saudis simply do not have that much storage capacity. Saudi must store oil in above ground tanks. They do not have salt caverns like we do here in the US. If you produce in excess of 9 million barrels per day, then you could not possibly store more than a few days production. And if they are truly cutting back, then they could only return to their previous capacity. Not producing to their capacity now would not guarantee that that they could produce “over-capacity” later.

2, About reservs. Is there a risque to "destroy" a field due to extractions techniques so that in the end a lot less than expected was beeing extracted? Will such a situation show up in the reserv figures?

I guess that a combination of too high reserv figures to start with AND a situation where more of it than expected will be left in the ground must be a disastrous situation.

I assume you mean risk and not risque. Risque means “Suggestive of or bordering on indelicacy or impropriety.” Or “improperly sexually suggestive”. I really do not think that is what you meant. But yes, you can damage a field; though not destroy it, by overproducing it. If indeed that was your question, for I am really not sure.

But nothing shows in “reserve figures” except someone’s guess or what Saudi tells the public. There is no official tally of “reserve figures”.

And you ask; ” AND a situation where more of it than expected will be left in the ground must be a disastrous situation.

I am not sure what you are talking about here. But I assume you mean bypassed oil left in the ground that could not be extracted later. This is outside my field of expertise, but I suppose that could happen. But bypassed pockets, at least some of them could be drilled and extracted. Of course that assumes that they would know exactly where these pockets are. And I don’t think that is always possible. So yes, I suppose a lot of oil could be left in the ground.

Ron Patterson

Technically, the biofuels that are significant part of the growth in 'total liquids' these last two years are not "extracted". Therefore to say "Global extraction of (all liquids) oil is growing on pace" is incorrect.

Your weather forecast is also inconsistent with the US Weather Service and Accuweather - who both are now saying the opposite about El Nino.

I avoid Frauddy's website. The remittance he receives with each hit discourages him from from foregoing his bad habits. Don't worry he won't starve. By not clicking on his url you will be providing him with an incentive to find a role in life more in fitting with his capacities.

Wow. What a kook.

I hope this scumbag gets the death penalty. But unfortunately he'll probably die of old age in jail. Pathological contrarian tendencies are not benign.