Saudi oil production revisited

About this time last year, I wrote the following into what is now the Classic section of TOD. Given the nature of the current discussion, I hope you don't mind my bringing it back forward, since it appears informative to Prof G's recent question. It relates to current and anticipated production from the oil fields of Saudi Arabia. I have made some slight updates and will put those in parentheses, and marked with UPDATE. The post was as follows:

The attached rough map is derived from one in the OGJ and shows the current oilfields along the Saudi coast, different colors to help with differentiation. (To give a sense of scale the island of Bahrain at the bottom is about 30 miles long).

Questions upon the likelihood of the world being able to match oil supplies with demand, usually devolve onto how much oil will be exported from Saudi Arabia. Just this last week the EIA site describing that country was updated, following the accession of King Abdullah.

Among the things to note are:

In June 2005, Saudi Aramco's senior vice president of gas operations, Khalid al-Falih, stated that Saudi Arabia would raise production capacity to more than 12 million bbl/d by 2009, and then possibly to 15 million bbl/d "if the market situation justifies it." Falih added that by 2006, Saudi Arabia would have 90 drilling rigs in the Kingdom, more than double the number of rigs operating in 2004.

Since a check on the number of active drilling rigs has shown only about 30 rigs actually drilling, until recently, this is a sign that they are getting serious about meeting that commitment.

(UPDATE: Tonight according to Baker Hughes they have 47 active on land, and 6 offshore). To digress just a little, however, J drew attention to the recent contract that will take 5 offshore rigs, from the Gulf of Mexico to Saudi Arabia at the end of the year.

The interesting thing is that if we look at the announced plans to increase Saudi oil production, the extra oil is to come from the following fields;

Haradh - 300,000 bd, due in February, 2006 (UPDATE: and now in production)
Khursaniyah 500,000 bd, due in late 2007
Shaybah - 500,000 bd, due in 2008 (this is down in the Empty Quarter)
Khurais - 1,200,000 bd, due in 2009.
and Nuayyim - 100,000 bd, due in 2009 and which has been added since the initial announcement about increases in production. (This is almost due South of Riyadh and off the previous map, and may be a part of the initiative to open up the Central Arabian fields.)

All of these sites are on land (see earlier map here and current map of the offshore fields). None of the increased production is to come from offshore. So why are they bringing in these platforms?

The answer lies in another quote from the EIA page.

One challenge for the Saudis in achieving this objective is that their existing fields sustain 5 percent-12 percent annual "decline rates," (according to Aramco Senior Vice President Abdullah Saif, as reported in Petroleum Intelligence Weekly and the International Oil Daily) meaning that the country needs around 500,000-1 million bbl/d in new capacity each year just to compensate.

These numbers have been much discussed, in earlier posts here and conjectured about by a number of authors. But this is an upgraded set of values and I will write more on this in a specific post, following this one. But it is worth noting that this drop will require a significant number of additional new wells each year, over and above the new production wells. And in light of our earlier comments this is where the extra 60 drilling rigs will come into play. (60 rigs x 6 wells per year x 3,500 bd per well, is close enough to 1 mbd per year of new production).

As for the drilling rigs from the Gulf, they will most likely be used at Safaniyah and Marjan, since the Qatif and Abu Safah fields that were brought on line this year are still a little early to see much depletion and also will likely still have the drill platforms there that were used for the initial increase in production.

It should also be remembered that about 2 mbd of Saudi production is now used internally, and the EIA page shows a steady increase in that demand.

The contract to start the Khurais development, due on stream in 2009, has just been given to Foster Wheeler Energy Ltd. (That link to the OGJ is no longer valid, but merely said

Saudi Aramco let a front-end engineering and project-management services contract to Foster Wheeler Energy Ltd. for full development of supergiant Khurais oil and gas field in Saudi Arabia.

The field is to produce 1.2 million b/d of Arabian light crude by 2009 as part of Aramco's program to raise production capacity from 10.5 million b/d at present to 12 million b/d by 2009 .

To repeat the numbers from a couple of earlier posts that specify the totality of Saudi Production. According to Cordesman and the CSIS they intend to bring production up to the following numbers
Abqaiq - 400,000 bd
Ghawar - 5,500,000 bd
Berri - 400,000 bd
Safaniya - 1,500,000 bd
Abu Sa'fah - 300,000 bd
Zuluf - 800,000 bd
Marjan - 450,000 bd
Haradh - 170,000 bd
Shaybah - 500,000 bd
Munifa - 1,000,000 bd

This gives the 11 mbd that they claim to be able to currently produce - though it includes Munifa, of which we have commented negatively earlier.

(UPDATE: The 1 mbd from Manifa will now likely start coming on stream in 2009, there is some info here, here, and here. It is the last of these that points out that

Following its discovery in 1957, the field was developed but later mothballed due to the heavy quality of its crude.

The launch of Manifa's development remains on hold until the kingdom builds refineries capable of handling its heavy 28 degrees API gravity crude, the CSIS report revealed.
"The combined costs of fitting this field and the lack of refining capacity for the heavy crude it produces is responsible for the delay in putting this field on line," said the report, entitled Saudi Arabia's Upstream and Downstream Expansion Plans for the Next Decade: A Saudi Perspective. To this end, Saudi Aramco has plans to build two new refineries: a joint venture 400,000 bpd refinery in Yanbu and a new grassroots refinery at Jubail, also projected to have capacity of 400,000 bpd.

The problems with the oil are also given here.)

When this is added to the new production outlined above, and when you include an anticipated 800,000 bd loss due to old fields declining, the sum comes in just over the required number.

What it does not do is include more than one year of current declines in production from the existing fields (and again this might be the role for the new rigs being brought in).

(UPDATE: Earlier this year the CSIS (ibid) came out with a new book “The Global Oil Market: Risks and Uncertainties,” by Cordesman and Al-Rodhan. In writing about Saudi production it says, relative to the numbers above:

An estimated 2.3 to 2.4 mmbd of new capacity will come onstream between 2005 and 2009 , but an estimated 800,000 bd of that will go into replenishing the natural decline curve. The end result is a net addition of roughly 1.6 mmbd to the current sustainable capacity of 11.0 mmbd.
The program has been put on the fast track, and the book suggests that the additional production may come on stream before 2009. At the risk of appearing slightly cynical of this, oil depletion is not a single event, but occurs each year, so that if the drop in production is 800,000 bd/year and there are 5 years from the beginning of 2005 to the end of 2009, then my arithmetic says that they have to increase production by 4 mbd just to sustain their current numbers. On the other hand, with in-field drilling, as the Saudi Minister has said, they can keep this down to about 2% - and while this agrees with Cordesman’s number, it also requires all those drills, that they don’t seem to have yet. The book goes on to note that current Saudi spare capacity comes from Safaniyah – where there are two on-shore wet handling facilities with trains of 0.6 mbd each, coming from 60 wells that have been “recompleted” in lower formations. )

An earlier estimate of production in Saudi Arabia at the beginning of the year was as shown below, with the flow given in thousands of barrels a day (kbd):
Abqaiq 400 kbd;
Abu Sa'fah 200 kbd;
Berri 300 kbd;
Ghawar 4,500 kbd;
Hawtah 200 kbd;
Hout 300 kbd;
Khurais 300 kbd;
Marjan 270 kbd;
Qatif 800 kbd;
Safaniya 700 kbd;
Shaybah 600 kbd; and
Zuluf 500 kbd.
This adds up methinks to 9.07 mbd. UPDATE: An Oops! - When I first wrote this I had a map that did not survive, and in recreating the post I chose the wrong one - herewith the other:

And to continue to add info to the site, herewith a graph from the Saudi presentation to CSIS, in response to Matt Simmons, from a couple of years ago:

I'm glad they are building their own refineries for handling the heavy oil instead of blaming the rest of the world for lack of refinery capacity. But we are seeing the Red Queen hypothesis of Alice in Wonderland: It takes all the running in the world just to stay in place.
Of note, I did not see any mention of how they are going to deal with the high vanadium content of the Manifa crude, only the heavy weight.
Doesn't vanadium have some industrial uses? How much vanadium is there in this oil?
Vanadium has some limited industrial use, mainly in high quality steel alloys. The current cost of the pentoxide is $8 per pound.

While Vanadium can be (must be as it poisons the catalysts) extracted from oil, the cost and difficulty of doing so is high.  The amount of Vanadium in even the most contaminated oil is worth less than 1 cent per kg oil - which I believe is far less than the cost of extracting the Vanadium.

We used to burn oil for energy in steam plants. Vanadium was just trapped in the filters with the rest of the ashes from oil. Easy to get it out.
But that is treating oil like a convenient form of coal. Which in 1957 it was, pricewise.
Well they might have to replace much more than this. Hersh has a nice piece on Bush Admin "thinking" about Israel/Hezbollah etc.

A high-level American military planner told me, "We have a lot of vulnerability in the region, and we've talked about some of the effects of an Iranian or Hezbollah attack on the Saudi regime and on the oil infrastructure." There is special concern inside the Pentagon, he added, about the oil-producing nations north of the Strait of Hormuz. "We have to anticipate the unintended consequences," he told me. "Will we be able to absorb a barrel of oil at one hundred dollars?

Hundred would be a bargain.

I'm a bit of a noob here, but wouldn't an attack of this sort actually be a good thing?

It would raise oil prices, forcing the world to invest and implement in alternative energy sources.

It would also dramatically slow production, disrupting Hubbert's peak and saving more oil for after the peak.

Sorry if this is a threadjack.

RIgs that drift from our gulf to theirs may be an overall positive because their wells produce more than ours do, but nevertheless there will be less development here than previously thought.
We need more rigs, crews, and pipe, for starters. Leaky pipes might be a world wide phenom considering how old most fields and their infrastructure are.
What sort of metal do they use for deep sea piping?  I know the Navy uses a material called monel which is mostly nickel and copper, for their pipes and fittings that are exposed to seawater.  But I imagine that monel is probably too expensive for kilometers of piping.  Is there an industry standard?  And what sort of piping did BP have that gave them problems?
Almost certainly the pipe is garden variety low-carbon steel, painted on the outside for protection from the elements. Internal corrosion, at least enough to eat through the wall, was not expected - normally, oil protects steel from corrosion.
This might be a "partial" analysis problem.

The consensus at TOD is that higher oil prices need to be part of a long term Peak Oil solution.

However, a dramatic escalation of the Middle East conflict involving a conflagration in the Strait of Hormuz isn't without the potential for all sorts of other (not all that controllable or pleasant) consequences.

On balance, I think we'd prefer a different path to higher prices.


A very interesting point. The irony is that Hubbert's peak is a model which reflects a world in which people may be dying for oil (the USA then) but not one in which they are not only dying for oil, but also killing for oil (the world now).

Paradoxically, overly rigourous adherence to the Hubbertian  model makes the peak oil community too optimistic, in that they tend to believe that the resource-wars mayhem won't really begin until after the peak, since otherwise their model wouldn't fit as neatly as they would like it to. But as you suggest the mayhem may have begun already.

So any hope of you smart TOD guys designing an updated depletion model that factors in resource-war driven production mitigation as well as creaming curves?

Er,the mayhem started almost 5 years ago.  Looking backwards, most of the 20th century wars had oil as a motive or deciding factor.
WWI: Germany wanted the Baghdad-Berlin railway to deliver oil, the British didn't want them to get it.
WWII: Germany made runs at the North African and Azerbijan oil fields, Japan temporarily captured SE Asian oil.
The Cold War: ended in part with USSR peak oil plus Saudi Arabia flooding the market with cheap crude to cut off the USSR's hard currency supply.
US-Iraq War I (1990-1991): self explanatory
It never ceases to amaze me that over half of people who believe in geological peak oil deny that the constant warfare of this century is all about oil as well.
Don't confuse end and means.

WWI is far more complicated; it was not about oil.
WWII was Nazi-Germany's quest for "Lebensraum", and oil was needed to fuel the war machine.
The cold war was about ideology. It was fought with oil, among other means.

Depends who's history you believe.

Don't forget about Leo Wanta and the destabalization of the ruble through Forex transaction trading.
I would suggest the post-peak profile of the Hubbert curve can't be used as a forecast. It is simply a result of geologically constrained production in an otherwise business as usual environment, the area under the curve being the remaining recoverable reserve. If we accept that post peak will be anything but business as usual then we can dismiss the post peak profile. No one can tell what impact resource wars, global depression etc will have on the abilities of the oil majors or national oil companies to bring oil to market.

If the collapse of the Soviet Union is a reasonable proxy for a post peak global collapse (this could even be optimistic since there wasn't a serious war involved) then oil production could fall away very rapidly indeed. FSU production fell by 50% in under 5 years.

See this graph from Laherrere:

Click to enlarge.

I guess this was economic collapse leading to oil production collapse, but couldn't the global case see peak oil causing economic collapse which in turn destroys oil production?

Will OPEC still be producing ~30mbpd 3 years post peak? I wouldn't bet on it!

For economic collapse to lead to oil production collapse one must assume price collapses. This was not true during the seventies - three recessions, but never a yoy price decline. A depression would be a new case...
One can assume infrastructure collapse along with economic collapse. In that case oil production would collapse. This is basically what happened in the FSU and what has happened in Iraq.
"For economic collapse to lead to oil production collapse one must assume price collapses."

This is not necessarily true ... prices can get high enough that people can no longer pay at the pump - which means pumps can no longer be paid to pull oil from the ground.

That's intolerably simplistic, but everyone MUST keep very clear that petroleum does not follow simple supply and demand, as I noted in a previous post. It is perfectly feasible that the US will nationalize our oil ... it is possible that global conflicts may continue to spread and escalate ... we could all be back on rationing stamps for food and fuel ...

For every direction there are numerous outcomes, and this forces us to not only work diligently to accurately predict such things as global peak of production, but even things like; (1) how the market will work on developing alternatives and non-conventional sources, (2) how politics and foreign policy will shift and change to deal with changes in supply, (3) how domestic policy will change - with our "way of life" changing as well ...

There is only one thing that can simply be stated - production of hydrocarbon fuel and raw materials, necessary to the maintenance of the western world's current way of life, will begin to decline in the approaching years.

No one is certain how few or how many , nor can we accurately determine at what price per gallon the US economy, and even that of the world, will finally tip over into true depression, so we must all work diligently to make accurate predictions, while at the same time altering friends, family, local/regional/state/federal politicians of your concerns, and preparing for what may be the most challenging times you and your loved ones have ever faced - be that in 3 years or 15.

I agree, a depression is unlikely. Maybe a few quarters of recession, but we'll see.

Many on this board miss the distinction between real GDP and nominal GDP. Nominal GDP will likely keep growing, real GDP will likely contract if we peak and don't plateau ( or even just grow supply slowly). Interest rates are likely to go a lot higher than people expect unless we get a housing crash.

The Dow Jones looks OK if you look at a chart of the 1970's (in nominal terms), until you inflation adjust it (real terms), then it looks remarkably similar to a chart of the 1930's depression.

Going forward the its likely to be a stock-picker's market like in the 1970's - index trackers are going to suffer, in my humble opinion. And most stocks will decline in real terms I suspect, with possible exceptions around energy, infrastructure, and mining related themes. Precious metals also did well in the 1970's.

Chris, you write concerning the fall of the Soviet Union:

"I guess this was economic collapse leading to oil production collapse."

AFAIK most contemporary historians contend that it was the glut of oil in the 80s that was the chief 'culprit':

Oil glut => collapse in oil price => collapse in Russia's oil revenue => collapse of Russia.

oil scarcity => increase in oil price => increase in Russia's oil revenue => Putin rules OK.

Russian oil all gone up in smoke. Russia in deep doodoo...

Hi Chris,

Regarding what caused the Soviet Union collapse was the collapse in oil production, thus a collapse of hard currency earning.

You can find a communication done by Marek Kolodziej during the ASPO IV International Workshop on oil and gas depletion in Lisbon, Portugal. The document is entitled : Former Soviet Union Oil Production and GDP Decline: Granger Causality and the Multi-Cycle Hubbert Curve

You can find all the presentation there

While the concept of "demand destruction" is a nice one to kick around - the idea that higher prices will result in diminished demand - that really only works when you're talking about things like produced goods (non-essential food agriculture and non-essential manufactured goods).

In the case of petroleum, demand destruction only works so far, because you're talking not only about the raw materials that lend to the creation of everything in modern society (everything made of anything synthetic that your mind can dream of - and a million more that you won't) but petroleum also is the primary fuel source powering how those things are grown, manufactured, mined from the earth, transported by land, sea, and air ...

... when you hear someone talking about how demand destruction will ultimately help to keep the prices down, you have permission to slap them, because the "demand" cannot go away unless you take away the demand for food, for fresh water (pumped thousands of miles from the Colorado, Columbia, Mississippi, Missouri), for more than 98% of all pharmaceuticals (including the anaesthesia that will allow your child to sleep during an emergency surgery), for the fuel to power massive earth moving machinery after any kind of natural disaster ...

Do you see? There can be no demand destruction without destruction of those with demands - a horrible thought, and one that can certain inspire nightmares - but as the cost per barrel inches higher, those are the kind of nightmares we'll all be having.

I appologize for interrupting the thread any further - but when someone asks a question - I think an answer is appropriate. While some may disagree with an element of one point or another - the concepts are all there - we all have seen basic discussions like this - so let's save the thread from an ongoing barrage of "how I'll survive" posts afterwards.

... when you hear someone talking about how demand destruction will ultimately help to keep the prices down, you have permission to slap them, because the "demand" cannot go away unless you take away the demand for food, for fresh water (pumped thousands of miles from the Colorado, Columbia, Mississippi, Missouri), for more than 98% of all pharmaceuticals (including the anaesthesia that will allow your child to sleep during an emergency surgery), for the fuel to power massive earth moving machinery after any kind of natural disaster ...

Do you see? There can be no demand destruction without destruction of those with demands


Au contraire.  

Demand destruction is a very useful concept and it explains why oil will be available for essentials long into the future.

If one believes in an early peak, it is not unreasonable to believe that one can personally take steps with a decent chance of reducing the affects of future scarcity.

In fact, a decent understanding of how demand destruction works could help avoid the panic evident in Gargoil's post.

Only a very low rate of demand destruction in western countries (? about 1% p.a.) can be accommodated by adaptation within the current pattern of development.  Below that level can be accomommodated by relatively painless efficiency improvements.  Above that it will likely lead to destruction of the current systems and patterns of development - scattered residential, retail and employment zones, car commuting, etc. - most things condemned by Kunstler.  Results in early stages will be increased unemployment, house price stagnation followed by decline, increased interest rates as governments  try to reduce debt partly caused by increased energy prices - i.e. things UK is just beginning to see now.

Significantly higher rates of demend destruction (= depletion) as predicted by some on this site can IMHO only lead to acceleration of these trends and successive bouts of economic crises.  As Chris Vernon says, the actual decline rates and oil prices once we are clearly past peak are essentially unknowable as all sorts of political aspects (oil producing countries restricting exports, wars, recessions, lack of investment and expertise, collapses of some economies) will come into play and push the purely geological considerations into the background.

In fact, a decent understanding of how demand destruction works could help avoid the panic evident in Gargoil's post.

Can you elaborate?
How can you have "demand destruction without destruction of those with demands?"

I am trying to gather a "decent uderstanding" of all things Peak Oil.

Please educate me.

Can you elaborate?
How can you have "demand destruction without destruction of those with demands?"

Demand destruction means that people's capacity to consume oil is diminished, not that they themselves are destroyed.

Essentially there is currently an immense cushion against real hardship in the way we live.  Much of what we use could be used for other, more essential, things.

ie. energy and resources consumed in entertainment, comfort and luxury can be redirected for basic sustenance. eg. Fuel used in trips to Vegas could go to running tractors and combines and irrigation systems, milling flour and baking bread.

So, for one simple example, tourism and entertainment could whither away completely without anybody starving.  But it is much broader than that. Very few of us work in industries that could not be pared back massively without threatening survival.

Note that by starving I mean actual starvation, not unemployment, income loss, poverty etc.

So what happens to the growing number of unemployed in a nasty peak oil situation?  

Remember that even ancient Rome, never noted for compassion, doled out free food for the poor on a very large scale: as much as 30% of the population at some points in its history. (reference:  "Collapse" by Tainter)  Why?  As far as I can discern this was done because the urban poor become very dangerous when hungry.  They can easily trash your society.  But it's also likely that they are fed because they are a useful pool of manpower at times and simply because they are fellow citizens.

Currently, if you haven't noticed, the poor in America are actually fat!  Never before in history has this been the case. An utterly astonishing development. And another indication of the huge cushion we have against real hard times that actually threaten life and limb.

So, to get back to the idea of "demand destruction":

Say someone with a nice job in the airline industry loses their job because high oil prices wipe out air travel for fun.  When savings are exhausted, they join the ranks of the poor.  Their demand for automobiles, luxury goods, restaurant meals, steaks, movies, McMansions etc has been destroyed.  But they live on, getting by on the dole (perhaps a ration of rice and beans) and casual labor.

It's possible that such people could learn to enjoy neighbourhood soccer games in vacant lots and open air performances by local musicians. i.e. They may discover their lives don't completely suck even though they have no money.

This is far from ideal.  And I certainly have few moral qualms about living high on the hog the way most of us do now.  So there is nothing redeeming, in my view, about having to give up the luxuries that we love.

But my point is:  "demand destruction" at its worst means being involuntarily busted down to the simple life  -- or, more likely just reduced to a simpler life.  You lose some of your  capacity to consume very large amounts of oil. It does not mean death and starvation, perpetual misery except in unlikely extreme cases. Most of the world currently lives in a state of demand destruction.  Only in their case demand was never constructed in the first place.


[But my point is:  "demand destruction" at its worst means being involuntarily busted down to the simple life  -- or, more likely just reduced to a simpler life.  You lose some of your  capacity to consume very large amounts of oil. It does not mean death and starvation, perpetual misery except in unlikely extreme cases. Most of the world currently lives in a state of demand destruction.  Only in their case demand was never constructed in the first place.

Thanks for the clarification.

However I think there is only a fine line between your demand desctruction and the scenario described by Gargoil

... when you hear someone talking about how demand destruction will ultimately help to keep the prices down, you have permission to slap them, because the "demand" cannot go away unless you take away the demand for food, for fresh water (pumped thousands of miles from the Colorado, Columbia, Mississippi, Missouri), for more than 98% of all pharmaceuticals (including the anaesthesia that will allow your child to sleep during an emergency surgery), for the fuel to power massive earth moving machinery after any kind of natural disaster ...

I see the distinction you are making. What I don't see is any sort of mechanism or natural stop that keeps society from sliding right past your scenario into Gargoil's world.

How much oil do we actually use on trips to Vegas? Even if we cut out all such pleasure usage from our economy will there be enough oil to make fertilizer, plastics, gas for shipping/trucking, heavy manufaturing etc?
Or even if sufficent oil is available could we consumers still afford the end products? So even if insulin is avaiable can I afford it? Especially considering the huge world wide recession/depression?

This by the way is not a rehtorical question. I am genuinly curious.

"Demand Destruction" merely means the uses for oil at $3/gallon that are not practical $6/gallon, or any other balance.  It's a generalist economic term.

One of the universal measures of general quality of life is time/income spent on leisure, as opposed to work.  We have quite a bit of progress to show in the Western world in that area in the last century.  Most of our economy isn't jobs devoted to the necessities of life or making tools that promote the necessities of life, but on frivolties like travel agents, priests, lobbyists, celebrities, the press, geriatric care, telecoms, phone sanitizers, what-have-you.

But in an emergency wherein our energy supply is removed, we could be plunged back to where most of the lower-middle class income is spent on heating our homes, putting food in our mouths, protecting ourselves, et cetera.  Without the leisure spending, the large portion of the nation whose work has very low-order benefits to our lives will find themselves unemployed.

Basically, a recession of a magnitude we've never encountered fully.

It's what we're talking about when we say that if alternatives are not found to oil, great hardships will occur - the optimists among us who believe that it won't cause the fabric of society to be destroyed and result in massive die-offs.

That's just the economic side of it - "demand destruction" could mean nuclear war eliminating half the population of the world, or it could mean we ride more bikes, the term applies to both.

What I don't see is any sort of mechanism or natural stop that keeps society from sliding right past your scenario into Gargoil's world.

Agreed. But even my example scenario is quite extreme and unlikely any time soon.

Even if we cut out all such pleasure usage from our economy will there be enough oil to make fertilizer, plastics, gas for shipping/trucking, heavy manufaturing etc?

I would argue that our "non-essential" use of oil is several times greater than our "essential" use.  Bernanke pointed out recently that we use twice the oil per capita as some other developed nations (Japan, for instance).  They live much like us, yet use half as much oil.

So it's possible that oil reserves could be stretched substantially without impacting lifestyle much.  Once you get into a situation where lifestyle is impacted, the savings are even greater and the reserves get stretched further for essentials.

As noted by other posters, the pessimists believe that if the nation were forced into "powerdown" mode, the social fabric would soon rip leading to largescale collapse despite the fact that substantial resources remain.

I'm an optimist on this issue.  But my optimism is not based on a positive view of human nature.  Rather, historical examples like the Great Depression, WWII rationing etc, show  the social fabric can take a lot of punishment. For a more extreme example look at the Cuban "Special Period".

So even if insulin is available can I afford it?

In very difficult circumstances, maybe not.  But odds are you'll get it, anyway.  During the Great Depression, America took a big lunge to the left and, in key ways, never looked back.  Peak oil would almost certainly drive it further left as far as the average citizen was concerned.

What I don't see is any sort of mechanism or natural stop that keeps society from sliding right past your scenario into Gargoil's world.

I replied:

Agreed. But even my example scenario is quite extreme and unlikely any time soon.

What I should have said was that there is indeed a continuum with Gargoil's world further out on one end than the scenario I outlined.

But it is not easy to slide along that continuum.  Reason: society has immense capacity to redirect resources and to adjust to shocks like diminishing reserves of cheap energy.   Society is not a house of cards.

But it is not easy to slide along that continuum.  Reason: society has immense capacity to redirect resources and to adjust to shocks like diminishing reserves of cheap energy.   Society is not a house of cards.

I see. Thanks for the reply.

I've read too many doom and gloom predictions lately. Its nice to hear a more optomistic tone.

tourism and entertainment could whither away completely

Not likely at all!
In order to prevent the urban poor from "trashing the society" BOTH Panem et Circenses were needed.
Why would it be different today?

Great point.  I concede it immediately.

Tourism for the masses is a recent invention and may well soon disappear.  Mass entertainment, however, cannot be dispensed with.

The estentials will certainly include tanks, fighter plance and gunship helicopters.
Well said - however for demand destruction to really start occurring in any measureable quantity, oil prices are going to have to increase substantially from here IMHO...

And if that happens there will be calls for rationing etc. - in itself a form of demand destruction. I wouldn't bet on free market pricing being permitted if supply ever gets tight.

Switzerland in 1945 maintained an advanced industrial and Western democratic society with a decent quality of life (including anaethesia) with 1/700th of the oil use per capita of the US today.

With today's technology and better planning, they might get by with 0.1% of US oil use per capita.

I think anybody who loves life would want oil prices to rise as slowly as possible .... basically the slower they rise the more time the market has to respond and the better we'll be. If it rises too fast we're screwed.
Can somebody point me to an explanation of all the crude oil grades, API sweet, light, heavy terminology etc...
i googled it with no joy!

Many thanks.

Answer me this, smart people :

by 2006, Saudi Arabia would have 90 drilling rigs in the Kingdom, more than double the number of rigs operating in 2004.

So, were they unable to obtain all those rigs, or were they merely lying? The answer is pretty crucial, it seems to me.

In either case, their 12 million bbl/d in 2009 would seem to be surely, demonstrably kaputt, n'est-ce pas?

Question two : does the market know this?

Just to see if I've understood : the 90 drilling rigs were intended, for the most part, to offset depletion on the existing, mature fields. This doesn't create any new reserves but accelerates the drawdown of extractible oil, so that the decline will be all the more precipitous when it comes (as demonstrated most remarkably in the North Sea). Have I got that right?

I thought there was currently a worlwide shaortage of Rigs?
No, the Saudis do not have the 90 rigs today in 2006 that they said they would in 2004. Yes, the lack of rigs will make it more difficult just to cover existing declines.

I do not believe the Saudis were lying. I think they believed they could get 90 such rigs back in 2004. The reality has turned out to be a bit different.

The "market" knows nothing. Individuals know things and most individuals are either unaware of this data or don't care resulting in the collective actions of the most-holy-omnisicient-benevolent "market" not knowing jack squat.

North Sea? I'm more worried about a Yibal style collapse for Ghawar.

You have to remember, this is Aramco managing Ghawar, not Shell.  I wouldn't bet on a collapse.
Hehehe...You think Aramco is a better manager than Shell? Imagine that! Shell may be worse than BP but Aramco is a far worse manager than Shell. I know, I worked for them for five years and I have a son who has worked for them for the last fifteen years. Aramco manages for maximum production no matter what the cost, no matter how much they may be damaging their fields. Most them really believe that they have 260 billion barrels of proven reserves with another 200 billion yet to be found. But then it is my guess that you, SelfAggrandizedTrader, really believ that absurdity as well.
I suspect the royal family does have a clue... and wants to maximize earnings and swiss bank accounts now while they still have a grip. What good is Saudi production in 2016 if they find it in their best interest to move closer to their (formerly) foreign accounts in 2010?  Do you think there is a single prince who doesn't have a nicely padded bolt hole?
Adam Smith says the market does know because if it didn't it couldn't have an invisible hand to fix everything! :)
The market never had an invisible hand.  The invisible hand is the price of things, not shares. When the price of oil goes high enough, the hand will encourage us to use less, produce more, and switch to substitutes. Geology may, of course, adjust the mix.
I have read 'Party's over and 'Long Emergency' and am about to buy Twighlght in the desert. There is much good said about it.

However I noticed one 'small' bit of negative crit on the book trying to debunk peak oil. It is a report by a petroluem engineer Jim Jarrell entitled 'Another day in the desert..........'It took a while to find a link to the actual report but here it is:

I just wondered if anyone had seen this report or what they think about what it says, and comments etc..

Very interesting critique.  Thanks for the link.
I had read this some time ago also. It is worth reading, but really doesn't address Simmons' points directly. Regarding reserves, it basically says that SA is trustworthy and wouldn't lie. They don't have any more actual information than Simmons, so it's just a metter of who you believe. The question of exploration is similar - they cite the USGS as the reason to believe lots of new oil could be found. Given new tech, the fact that largest fields in a region are the first to be found, and that not much has been found over the last few decades, I doubt that new giants are awaiting discovery, but again it's opinion. They don't know more oil is there, they are going by USGS, which has a mixed track record (at best).

I think their critique of the depletion/decline argument is the most off base. Their discussion completely ignores what has happened at Yibal in Oman,the North Sea fields and others with horizontal drilling and decline. They could have written this in the late 1990s when The Economist ("Oil less than $10.00 is inevitable") and the oil companies thought this tech would yield a long-lasting bounty of abundant oil that would be slow to decline. They made the same arguments made in this critique of Simmons. However, real world experience of the last 5 years have shown they were completely wrong and that decline crashes after a relatively short period of production boost. It is as though the author was time locked in 1999 and hasn't seen the real outcomes yet.

Help. I can't get the numbers to add up. If they claim to have 11 mbls of capacity but 1 is Manifa they are down to 10. If they use 2 internally they are down to 8. But they export 9.1??

Also, if we start with 9.1 export, take away 3 years of depletion of .8 per year and then add 2.4 from new wells we are back to 9.1 after 3 years. But internal demand is increasing so we won't even get this far. Plus it looks like they can't get all the rigs they need to even meet adding 2.4.
Am I missing something? It looks like KSA is in decline.

KSA does seem to be in decline, you aren't missing a thing.
Jack, remember those days? Halcion. Is that still a word? Who are these people? MicroHydro is cool. Whatever happened to Cherenkov? I'd give a million smekhovos for one Cherenkov. Cherenkov, Oh, Cherenkov!

Jack? I can't handle this on my own.

CEO, If you want to save the world you need to get as many people invloved as you can. You are going to need the help. You can speed read through what you don't like.
CEO, i'd be especially keen to hear any comments you have about the above report that I posted a link to; concering Saudi oil production crit of the book ' Twighlight in the desert'
It has opposing views to this book, That is why i posted the link!


Hi Marco

I have read Simmons and the paper you link to is from ROSSSmith Energy Group and the engineers that author the critique site credentials so they may claim to be experts (this may make them qualified to critique but it cannot be assumed that they are objective given the affiliation).  They have listed numerous critiques - I have copied one below as an example:

"Furthermore, water injection does not erase the possibility of having secondary recovery, as Twilight states. It is secondary recovery."

If I remember correctly from Simmon's, he was clear that it is secondary recovery and that is WHY secondary recovery is not possible once decline sets in since it is already done - initiating secondary recovery erases the ability to employ secondary recovery later - this was the point and a good one.  The critique seems to be focusing on semantics.

Further, they argue Aramco is showing good field management and that this somehow discredits Simmons: this does not make sense to me - Simmon's does not argue Aramco has bad field management, on the contrary, he says they do and it was in the 1970's before nationalization that poor management occured at its worse - and also political interference could result in overproduction at times - Aramco may disagree but it is an authoritarian regime.

Good field management does not change the geology of eventual depletion and decline and Simmons focuses arguments on that.  Good feild management also does not erase the possibility of political interference as ARAMCO is state controlled.  Saudi Arabia is in decline despite whatever might be said and all the critiques in the world are not going to change that.

If the 12 million per day plus does appear in future... I would not hold my breath



It's time for school. Time to go to faculty meetings, argue about curricula, answer clueless emails from freshmen, and figure out what I want to make my students write about this semester.

I'm giving the TOD a quick read each day, knowing that the conundrum laid out by the updated "Limits to Growth" will shoot down all and any hopes of technologically finessing our way out our long deadly slide toward the abattoir of overshoot.

For those clinging to the idea that we will slip by the reaper while whistling and looking innocently toward the heavens, I supply a bit more hope, a bit more fool's gold.

Some current data to back up "Limits" conundrum from today's WSJ How are we going to build new energy saving infrastructure when the materials cost of the infrastructure is going up even faster than the cost of energy?:

"But unlike earlier consolidation waves, this one is occurring deep in the manufacturing food-chain, and being driven by surging commodity prices. Copper is up a stunning 192% over the past two years, nickel 103%, natural rubber 72%, and oil 67%. Another cause: severe price fluctuations that have roiled production, causing costly shutdowns and missed deliveries. The price of cold-rolled steel in the U.S., for instance, has been on a roller coaster, surging to $700 a net ton in June, up from $590 a ton a year earlier, but about on par with prices in June 2004."

natural rubber [up] 72%,

Natural rubber is a renewable, and sustainable resource.  The price rise of this supports my belief that we are just seeing the efects of quite rapid growth in China et al.

We can see efficiency gains in use of 20:1 for electric freight railroads and comparable with Urban Rail if "the other TOD" is included.  Gains this large can, IMHO, "change the game" if implemented early enough and widely enough.

Recycling metals is much more efficient than mining low grade ore. Modern design COULD build extremely durable and efficient goods.

"More of same" will NOY work, I agree.  But a radically more efficient society may not fit the models used here.

The United States is not even starting on that path, but we are not the only society.

For those clinging to the idea that we will slip by the reaper while whistling and looking innocently toward the heavens, I supply a bit more hope, a bit more fool's gold.

Not really the "good thing" to do, if there is any chance of mitigation (NOT escape) it is certainly not by increasing the drowsiness of "the crowds", including here at TOD.
I like Kurt Cobb better : Is just-in-time nearly out of time?

Another consequence of JIT is that it makes it easier for people to rig the market. Look at what the Chinese did with tungsten and molybdenum.
heh sorry to shoot it down but two of the elements that make up those solar cells heavily depend on cheap energy to make.


Indium is a byproduct of the formation of lead and zinc. Indium metal is isolated by the electrolysis of indium salts in water. Further processes are required to make very pure indium for electronics purposes.
don't know about availability but i do know any large ramp up would crimp supply's causing this and all the other electronic elements that require this metal to skyrocket in price.


Gallium arsenide is capable of converting electricity directly into coherent light and gallium arsenide is a key component of LEDs (light emitting diodes)
Gallium is normally a byproduct of the manufacture of aluminum. The purification of bauxite by the Bayer process results in concentration of gallium in the alkaline solutions from an aluminum:gallium ratio from 5000 to 300. Electrolysis using a mercury electrode gives a further concentration and further electrolysis using a stainless steel cathode of the resulting sodium gallate affords liquid gallium metal.
Very pure gallium requires a number of further processes ending with zone refining to make very pure gallium metal.

sorry the reaper will get us, the only thing we can control is how bad it will be. The more we hold him off the worse it will be later.

Since most of the energy required can be electrical they can power their own production. The cells are about 1 micron thick which requires vastly less material than silicon cells. Nanosolar calculate their total energy payback in 2 months. With lifetimes projected to be "tens of years" the EROEI of over 100:1

Low efficiency can be a problem in some areas.
The energy efficiency of the cheap printed version they are pinning their hopes on ( rather than lab samples using expensive processes) is 2 to 2.5 times less than the best silicon cells and means they reqire a corresponingly larger area for a given power output. Where space is not limited this is not a problem if their projected costs materialise as they will be cheaper per kilowatt rating. However the bulk of photovoltaic generation to date is in domestic grid connected  applications. In Europe there are many urban areas where the vast majority of houses do not have the about 30m² of south facing roof space that 9% efficient cells need to get the 3000kWhr per year average annual electrical consumption (without heating).

EROEI for solar/PV is one thing, economic viability is something all together different.  

I'm presently in the market for a home PV system, grid tied, no battery backup (too expensive, batteries don't last).
Three seperate estimates of a 3500kW system are all in the $30K USD range (installed). I get 5.5 hours of "full sun equivalent" a year here in the deep south, or 19.25 KwH/day, assuming ideal conditions.
By the same token, I can buy grid power for just $0.032 cents per KwH.  Thus, such a PV system has a payback period of 133 years. Doh!
Not feasible.

In Ca, rebates would cover about half the cost, and grid elect is 11 - 25 cents per kilowatt hour. Payback is still a long time, but I believe electicity costs will climb significantly over the next 20-30 yrs that the system is operating.
I made an error in my calculations of the present cost of grid electricity. It's 0.09 KwH. That cuts the return on investment time down to just 47 years.
Sadly, I live in central Georgia, and we have no rebates and fairly cheap electricity here presently. I do agree, however, that electricity costs are only going to continue to rise, they are up here about 15% since this time last year.  Still....geeze, 47 years?
That is a hard pill to swallow. Or to convince my wife that it is a wise move.
I think most people who get the systems even in California don't justify them by strictly economic criteria. I recall speaking with a man who runs a B&B in Nevada who was planning to put up a system. His brother from the silicon valley was ridiculing him about the cost and his response was "you have three big SUVs in your garage - that's your statement. This is mine." Obviously, the SUVs represent a vastly larger sum of money and never pay their cost back. Eventually solar will.

My solar is part of my post-peak security strategy given that I am quite concerned about what will happen to the economy. I am paying off the house as fast as I can, and with the solar roof I have that should produce another 30 yrs, I will be supplied with electricity for as long as I expect to live there well into retirement, not having to worry about the cost inflation. If I really get concerned, I'll add battery backup.

Because the power companies subsidise (more correctly, they are made to subsidise) peak power consumption, afternoon power prices are less than cost. So it makes sense to use subsidised power instead of solar power.
Until the power companies underinvest and you have to pay the cost of not having power. A bed and breakfast will have very pissed customers if the power goes off.
Thanks for the comments, guys. I do believe I'll go ahead with the plan, then.
Thanks, HO. Assume 11/mbd production capacity (2005) and 0.8/kbd depletion off the existing base = about 7%. Numbers for the end year.

Happy Scenario
(in-field drilling)

2% depletion
10.15/mbd (existing base)
2.08/mbd (internal consumption, 1% growth)
2.4/mbd (new capacity)
12.55/mbd (total)
10.47/mbd (oil or refined products available for export)

Unhappy Scenario
(no in-field drilling)

7% depletion
8.851/mbd (existing base)
2.16/mbd (internal consumption, 2% growth)
2.3/mbd (new capacity)
11.151/mbd (total)
8.99/mbd (oil or refined products available for export)

Comment: The truth may be somewhere in-between. Where are the rigs? I assume some number of them will be up and running sometime in the period considered. I assumed in both that Manifa and refining will come onstream in 2009.

I did not actually go into the really unhappy scenario -- no rigs for in-field drilling, further delays, eg. Manifa after 2009 because of refinery delays.

Obviously, the in-field drilling did not occur last year and doesn't seem to be happening this year either. That rules out the happy scenario right out of the starting gate.

A note on drilling: Saudi Arabia tests potential for unlocking heavy-oil reserves

Earlier this year, in a critical trial of Saudi Arabia's heavy-oil potential, U.S. oil giant Chevron Corp. began a field trial of a technique designed to pump out heavy oil that was previously considered unrecoverable. In the pilot project, which it plans to expand to additional wells, Chevron is injecting steam to loosen up sludge-like heavy-oil reserves in Wafra, a field in the so-called neutral zone between Saudi Arabia and Kuwait. Oil from the neutral zone is shared equally by the two countries....

... most of the Middle East's heavy oil is locked inside carbonite [sic, they mean carbonate] formations, where steam injection has never been tested on a large scale. If the steam leaks out through fissures in this softer rock, it would be difficult to build up the high temperatures needed to melt the heavy oil. It would also make the process more costly, since it takes lot of natural gas to make the steam.

The Chevron technique is to inject steam into a field through one well, soaking the oil-rich rock. As the steam heats the thick oil, its consistency thins to that of watery syrup. Then, the oil is pumped to the surface through another well.

In addition to the Wafra test with Chevron, the Saudis are also considering developing the gigantic Manifa field, which is believed to have a large component of heavy oil. As its lighter components are pumped out, Manifa could also be a candidate for steam injection.

Chevron's test in Saudi Arabia involves one steam-injection well, four producing wells and one observation well that collects data about the interaction of the oil and steam. Though it declined to give a timetable, Chevron is committed to expanding to a larger second phase that will include 16 injection wells and 25 producing wells as well as the installation of water-treatment facilities and steam-generation facilities. Total estimated cost: $300 million.

An insider who was at ASPO-USA told me "The comparison between a sandstone reservoir and a carbonate reservoir can be quite different in this respect. Carbonates are much more receptive to horizontal production." First, steam injection (if successful). Then horizontal drilling. Then down the road...

The SAGD approach which is being used in Alberta in the oil sands might be a better way of getting out the heavier oil.  From the way this sounds they are planning on using vertical wells (deduced from the four-around-one pattern) which may be a quick and relatively cheap method of checking the technology.  But it is not new - we both have written about it before - so unless there is some concern with the peculiar geology at Wafra.  

But a quick look at "Twilight in the Desert" says that the field is in a "grainstone" , and that it had been producing at 50,000 to 60,000 bd and then after the first Iraq war a 2,000 ft horizontal well, at the top of the reservoir, flowed at a rate 7 times that of an equivalent vertical well at the same locationt. They were, at that point, using horizontal sidetracks (though I thought those - by definition - were relatively short).

However they found a new extension at the Eastern end of the reservoir in a sand, this was developed in the late 1990's increasing production, which peaked in 1998, at 91,000 bd.

Not much of this is consistent with the Chevron story.


I thought the Chevron story (reprint, July 10 from WSJ) was worth passing on. There is the obligatory swipe at people concerned about oil production.

If it [extracting heavy oils] succeeds in overcoming the technical hurdles, the effort could significantly increase Saudi Arabia's oil reserves over the next several years, potentially adding some slack to tight energy markets. It would also be a blow to so-called peak-oil theorists who have forecast that world oil production is on the brink of peaking.
I don't know if it would be a "blow". Even if Saudi Arabia giveth, Cantarell and others will taketh away. Give me a break.

Anyway, this may be new development since Twilight in the Desert was written. From Chevron folks (pdf).

The Maastrichtian reservoir is one of five prolific oil reservoirs in the giant Wafra oil field. Maastrichtian oil production is from subtidal dolomites that average 15% porosity and 30 millidarcies permeability though porosity values up to 40% and permeability values over 1,000 md are common. Discovered in 1959, the Maastrichtian reservoir has produced less than 1% of its 1.5 billion barrels of low API, high sulfur oil in large part due to reservoir heterogeneity.

The carbonates were deposited on a very gently dipping, shallow, and restricted ramp setting that transitioned between normal marine conditions and restricted lagoonal environments. The Maastrichtian interval is part of the Aruma Group (Tayarat Formation) and is divided into an upper and lower portion by the Second Maastrichtian shale....

I think that the key to this is the phrase"If it [extracting heavy oils] succeeds in overcoming the technical hurdles". The success in overcoming the heavy oil technical problems may be insurmountable or of only limited success.
"Don't worry" EROEI gets the last laugh.
HO, good work on the article. My question is can we really start with the assumption that the Saudi's are gonna produce X amount 5 years down the line when they are falling almost 2 million bpd below what they say is their maximum.
Clearly what use is spare capacity if no-one can use it. And why is everyone assuming that the Saudi's are not producing whatever they can. Even if they had extra heavy oil considering that they are the lowest cost producer ( at least according to them and some analysts) shouldnt they  be abale to sell at a lower price.  
"most of the Middle East's heavy oil is locked inside carbonite"

Damn that Jabba the Hutt.  First he freezes Solo in carbonite, now he has locked up the oil.  Quick, get my lightsaber.

oil bearing reservoir?

The KSA has made the claim that with in field drilling they can reduce depletion rates from 7% ( or more ) to 2% can someone show on other mature fields where this has been the case I see nothing from the North Sea ,Cantrell and Texas to support the fact that you can indeed control decline rates as the KSA claims. Instead it looks like esp with modern extraction methods that your going from a decline rate of 14% or more to 7-8% at best with infield drilling. I just don't find the KSA claim of 2% believable.

This has been the number one problem I have with peak oil. The individual field decline rates seem to hover around 10% and yet overall decline rates of 2% or so are claimed. If you go with the math it looks like your facing a yearly decline rate of 8% at least or more that you need to make up with new drilling.

I'd love to be proved wrong. Show me how you can magically get fields declining at 10% or better to provide a overall rate of 5% or less.

Hold on there, memmel! You do not trust this man?

Abd Allah S. Al-Saif,
Senior Vice President for
Exploration and Producing,
Saudi Aramco
He was first appointed a Saudi Aramco senior vice president in 1992. His current responsibilities as senior vice president, Exploration and Producing, include exploration, petroleum engineering, oil production and processing activities. He was elected a member of Saudi Aramco's Board of Directors in 1998. Al-Saif joined the company in 1960 and was selected for the company-sponsored college degree program in 1965. He graduated from the University of Oklahoma with a BS in petroleum engineering in 1970. Al-Saif advanced through a number of petroleum engineering and operating positions and in 1982, he was appointed as vice president responsible for Producing. Al-Saif also served as vice president of Manufacturing; Supply and Transportation; Corporate Planning; and Crude Oil Sales and Marketing. Al-Saif is a member of the Society of Petroleum Engineers.

Westexas could reply better, but looking at the Texas case, the overall decline was kept to around 2% over past decades primarily because opening up new fields onshore and in the gulf partially offset existing field decline.  Application of advanced recovery techniques lilkely helped as well, but may not in the case of SA because they have been using them almost from the start. Overall decline includes both existing and new field production.
KSA seems to be claiming a 2% decline rate that's being offset by new production and then some. That's the part I don't believe it has to be more like a 7% or higher decline rate with new production resulting at best in a 2% decline rate. And its not clear how long that will hold. If Ghawar is truly declining at a reasonable clip 7% plus then over the next few years we should see unmistakable signs of KSA decline. From what I can tell its starting to happen now. The key is of course the decline rates of fields esp ones where advanced recovery methods have been in use for some time. I have yet to see any evidence they we won't experience steep declines 8% or better starting about now with us obviously post peak sometime next year. The big question is whats the rate of decline ? We will see.
Just to let you know -- I've just posted a belated and brief reply to your reply to my comment on your 'CERA's Perception Management' posting. Thanks]
OK, read it. Speaking of Skrebowski and making it pertain to this thread, here are his numbers for Saudi Arabia:

Haradh 300+/kbd

Abu Hadiya/Khursaniyah/Fadhali 500+/kbd
Khursaniyah NGLs 300/kbd

Hawiyah 370/kbd
Nuayyim 100/kbd
Shaybah 300+/kbd

Khurais 1200/kbd

That's would put new production from these fields in the neighborhood of 6/mbd (all liquids) in 2010. Manifa is not onstream until 2011.

Anyway, those are his numbers. Any comment, HO?

Correction. That would be a total of approximately 3.07/mbd of daily production in 2010 from these new sources. The 6/mbd came from another calculation and I typed the wrong number.

I add them up to 3070. What am I missing?
3070 kbpd / 1000= 3.07 mbpd
Nothing. Did you see my erratum comment above?

Anyway, here's the other calculation. Altogether over the 2006 to 2009 period, Saudi Arabia will produce 4.629 Gb of liquids from new fields or extensions to older fields. That's 15% of what I roughly calculate the world will use this year alone.

Forgot to add: if Srewbowski is right.

Apparently, typing and paying attention to detail are not my strong suits today. Monday? Freudian slip?

if Skrebowski is right

I think most folks are laboring under a misconception here. Most of these new projects are in old fields. They are just pumping more oil from old reservoirs that are already pumping at high capacity. Haradh, for instance, was already pumping into Gosps 1 and 2. Haradh 3 just added 300,000 barrels of new capacity from the same field that had been producing for many years.

Likewise Shaybah came on line 1n 1998, and on very good days can produce 590,000 barrels per day. The new Shaybah project is supposed to come on line in 2008 and add 300,000 bp/d to that capacity. However many of these new projects will just draw these old reservoirs down faster.

As I said in an earlier post, Aramco manages for maximum production and not necessarily for what is in the best interest of their fields. Drawing more oil, much faster, from Shaybah and Haradh and these other fields, may simply make them crash much faster.

Again, most of these new projects are in old reservoirs. These new wells and gosps are how Aramco hopes to get their decline rate down from 8 percent to 2 percent. They may indeed succeed but this means they will simply have to pay the piper later on in a much higher decline rate.

Darwin gets the cigar.

The choices seem to be, either conserve now or use it even faster thus making the coming crash all the harder.

Of course short-term minded capitalism will insist upon full out idiocy: hyper-consumption masquerading as efficiency.

The planet will fend for itself. Soon old lady Gaia will shake herself awake and destroy the pesky mosquitos who dip their straws into her hide.

Will she notice the passing of one species? I think not.

Right there crashing there fields. Sooner or later some of there fields are going to drop significantly if they haven't already. And its not clear how much of this new production is going to be eaten up by declines. Finally we see 14% and higher decline rates in other regions why is KSA blessed with even a 7% decline rate ? As has been proven over and over once you go into decline its impossible to keep production rates up. My opinion and its only that is KSA is seeing 5% plus decline rates with a 10%+ depletion rate with maybe half made up by new production coming on line. With this kind of depletion and additional depletion that will increase of the next few years I see this dropping within 3 years to a terminal 10% decline rate for the rest of there production. We will see.
2 questions:
1/ are you ironic in your rig total comments? If not, where are the additional (40+) rigs going to come from?

"Since a check on the number of active drilling rigs has shown only about 30 rigs actually drilling, until recently, this is a sign that they are getting serious about meeting that commitment."

2/ Heinberg said this on Aug 4:
"At the ASPO conference a well-connected industry insider who wishes not to be directly quoted told me that his own sources inside Saudi Arabia insist that production from Ghawar is now down to less than three million barrels per day, and that the Saudis are maintaining total production at only slowly dwindling levels by producing other fields at maximum rates. This, if true, would be a bombshell: most estimates give production from Ghawar at 5.5 Mb/d."

Is he the only one stating this?

Myy question is can we really start with the assumption that the Saudi's are gonna produce X amount 5 years down the line when they are falling almost 2 million bpd below what they say is their maximum.
Clearly what use is spare capacity if no-one can use it. And why is everyone assuming that the Saudi's are not producing whatever they can. Even if they had extra heavy oil considering that they are the lowest cost producer ( at least according to them and some analysts) shouldnt they  be able to sell at a lower price.