Heinberg: Middle East at a Crossroads

Rich Heinberg has an interesting piece that should be brought to the attention of TOD. Here is the link to it at The Energy Bulletin. Worth reading.
The [Middle East] situation clearly requires comment [and integration], as it has enormous implications both for the world as a whole and for the small but growing community of people involved in preparations for Peak Oil. Mainstream reporting seems to miss much of the context of events and, when discussing the Middle East, the geopolitical struggle for control of energy resources nearly always forms much of that context.
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.
Holy Crap.
Damn, ya beat me to it. That's exactly what I was thinking, verbatim.
That's odd I was thinking, "Yahoo!! Let's get this party started!!"


I like the way he drops that little bomb near the end of a lengthy piece. As if its your reward for reading the whole thing.
I'm not exactly an unbiased observer, since Khebab and I did an article predicting an imminent decline in Saudi oil production, but a few points:

(1)  I have been pointing out that Cantarell and Ghawar are facing the same problem--a rapidly thinning oil column, between a rising water leg and an expanding gas cap.  We know Cantarell is crashing;

(2)  Petrologistics reports that Saudi production is probably now down below 8.9 mbpd--about 7% below last year's (EIA) level;

(3)  Saudi Arabia (based on Khebab's HL plots) in 2005 was at the same point at which Texas started declining;

(4)  Saudi Arabia has large amounts of oil in storage and they may have been supplementing their production with draws from storage;

(5)  Saudi Arabia is vastly increasing their drilling program--just like Texas in the Seventies;

(6)  Ghawar's production of about 60 Gb is getting close to the maximum URR of 70 Gb cited by a Saudi Aramco retired insider (Simmons);

(7)  Remember the Saudi stock market crash--because of heavy insider selling?

One minor correction:  
(2)  Petrologistics reports that Saudi production is probably now down below 9.0 mbpd--about 7% below last year's (EIA) level;
Texas & Lower 48 as a Model for Saudi Arabia and the World:
(Great charts by Khebab)  


Note that BP has slightly different production numbers than the EIA


Is it credible, in your view, that the remaining Saudi fields could be making up for 2.5 million barrels per day in lost production from Ghawar?

From reading Twilight, I didn't get that impression.

It is quite possible that Ghawar has been in decline for years and Saudi has been ramping up all over the rest of the Kingdom, for years, to make up the difference. And now the other fields have peaked and they are in deep dodo.

Yes, it is quite possible that Ghawar is only producing around 3 mb/d.


It's spelled  " DOO DOO "     dodo Is the bird. (not the index finger one, the extinct one)  -;)  -;)

TODers Freudian Slip with gusto.

"Yes, it is quite possible that Ghawar is only producing around 3 mb/d."

Yes, and it's also almost possible that Ghawar is producing 10 barrels a day....or 6.5 mb/d a day.  This is an absolute shot in the dark, and any guess is "quite possible".  (brief aside, I have to love the fact that now Petrologistics is considered an expert and  being quoted as an authority on TOD when Simmons in "Twilight" laughs them off the block! :-), and in the "old days" they were the object of ridicule here...strange bedfellows indeed!

There is a bit of a hitch in the giddy up though....if we accept that:

#The Atlantic North Sea is suffering declines of some 8% to double digits, (known double digit drops on the British side), and I do accept that,,,
#That Canterell in Mexico is dropping (some say at large rates), and I do accept they are dropping at least some, we don't how how much
#That Venesuala is flat for various political and labor reasons, along with incompetent management and technical work in the field, and I do accept that
#That Bergen in Kuwait has peaked, and that Kuwait is at best flatline on production, if not dropping, and I do accept that
#That Nigeria is flat or dropping due to political instability and militant attack, and I do accept that
#That Iraq is essentially out of the picture as a major producer for the foreseeable future, and I do accept that.

And now, the icing on the cake, that
#That Ghawar, the biggest of the big is not only flat but has dropped some 2.5 million barrels a day below what it was thought to be producing (!!!) to around 3 m/bd....do you see where I am going with this?

If we accept all the above as true, then either we have to believe
*World consumption has hit the ground like a sack of shiit and we just don't know it, or
*Saudi Arabia is pulling off a MASSIVE miracle away from the Ghawar field, or
*They are pulling down storage at a rate that means their tank farms will soon be empty, or
*Other OPEC producers are making up the gap (who???), or
*Non OPEC nations are making up the gap, (who???),

or....the unbelievable, massive, complete meltdown would have began, oh, about 20 minutes ago, and $75 bucks a barrel for oil and $8 bucks a MM/btu for natural gas would be the GREATEST THEFT of oil and gas at the most unbelievably stupidly cheap price in the history of the world!  The massive shortfall depicted by the above stats would mean we should be seeing shortages at the pump NOW.  It would mean that a Dow of anything over 5000 points would be a steller price.  It would mean we should be seeing people doing what they did in the 1970's, giving their big vehicles to the dealers JUST TO GET ON THE LIST for a Toyota (back then, a Celica or Corola, now, a Prius or Camry hybrid.

It would also mean that well known "Peakers" are being far too optimistic.  The "slow squeeze" scenario talked about by certain folks here on TOD would be out of the question.  The 5 years before the collapse talked about by the Iranian minister of peak Bahktairi would not even be a hope of the greatest Pollyanna, and the "peak liquids post 2020, and then a 5% drop" depicted by Leharre would be lunacy.  They would be further off the mark than Deffeyes "stone age by 2030" remark.

Yet, crude oil is still below $80 a barrel, nat gas below $9 per MM/btu the last time I looked, and Propane is a steal as a burnable portable fuel given the above scenario.  The stock market, while taking some slaps, is certainly not yet at meltdown status, (think of the one day wipeout in 1987, when oil was so cheap it was being wasted for the fun of wasting it!) can you imagine the implications the peakers would read into that if it happened tomorrow?)

So, WHAT CAN I KNOW ABOUT WHAT I BELIEVE? (inside reference to Kevembuangga, I gave my closing opus and a thank you to our discussion the other day, by the way....my opus to "Stay away from the Dark Side, Luke...:-)

Just this:  We have no idea where we are.  The evidence at the top of this post indicates we could be on the absolute edge of cliff, with no time to prepare for anything.  On the other hand, it could be an indicator that we simply do not know the amount and reach of manipulations going on in the production/statistcal shifting going on.  Once more, I have to return to what is becoming my central point, my mantra, at least for now:  WE ARE RUNNING COMPLETELY IN THE BLIND, and this makes the danger far greater than even many "peakers" realize (remember, this is coming from someone regarded here as an optimist over the longer haul).

I no longer try to convince my friends/family/acquintances of "Peak", whatever that means, but simply ask them about a half dozen simple  questions:

Q.  Do you know where our oil comes from, and how much they produce?  Do you think anyone has real verified statistics on our major suppliers production?

Q.  Do you know how much oil our major suppliers have, and do you think anybody has verified statistics on that?

Q.  If we do not know the above two things, would there be any warning whatsoever if they cannot deliver for some reason?

Q.  Do you think that it is safe for a nation that has to have as much oil as we do, to deliver food, to get to people to work, to hospital, to school, and to heat homes to run completely in the blind on something that critical, and not have any alternative should the worst happen without warning?

Q.  For now, FORGET THE PEAK THREAT, and ask yourself, is the above situation not of the greatest immediate danger to a nation, running in the dark at full speed without lights?

What seals the above argument is when they try to find valid information on their own, about oil reserves, oil supply, oil production, and find out there is virtually no REAL information available.  Whether they accept immediate "peak" or not, they get nervous fast!

Roger Conner  known to you as ThatsItImout


You cited six examples of flat to declining production.  Three are clearly related to political problems--Iraq; Venezuela and Nigeria.

The other three--North Sea; Kuwait and Mexico--are all around the 50% of Qt mark.  Last year, Saudi Arabia was at 58%.  

You have described the fact that we are like a person driving blind, who may or may not drive off a cliff at any moment. What is the person to do?  Keep driving?  Oh,yeh! That's what we're gonna do. Keep drivin'. It's the Amurrican way of life you're talkin' about. Non negotiable, as they say.

In the mean time, I'm stockin' up on some more oil. I've already got the Prius. Thanks for the tip.

Bought 4 cases of Chevron DELO 400 15w-40 (6 gallons/case)last night.  1 1/2 years`ago I paid $32.something. 1 year ago I paid $38.99.  6 months ago i paid $42.99.  lats night I PAID $48.99.  Shit this is unreal.  I cannot raise my prices to this extent.  
Funny - there was a young 20 something guy at the door checking reciepts.  He saw my cart full of oil and said "Next time it will cost you an arm".  I told him the price story here and he said " it is only going to get worse"
I think people have a sense that it looks grim, but just like the people on Eastr Island, lets build more McMansions.
1 1/2 years`ago I paid $32.something... last night I PAID $48.99

One and a half years ago, crude was about $50. Now it's about  $75. Maybe there's a connection?

Always remember that the last foot hurts the most when you drive off the edge of a cliff.

These are excellent observations/questions that have bedeviled Peak Oil advocates for quite some time. If things are as bad as Heinberg and others are leading us to believe, wouldn't conditions be a lot worse by now? Why hasn't the entire deck of cards collapsed yet? Why is the idiotic Hummer crowd still able to harbor illusions about maintaining their wasteful lifestyles indefinitely?

I agree that Peak Oil is impending, as common sense says that any finite resource being depleted at the rate that oil is has to run out at some point. The question is when.

I've wondered for a long time if the current Peak Oil crisis isn't manufactured, and that while oil resources are certainly being depleted at a furious pace, if the situation isn't as bad as portrayed. Not that this is a conclusive point, but the fact that Matt Simmons is apparently linked to republican operatives like Cheney makes me decidedly suspicious of his motives. Is his drive to discredit the Saudi reserve figures a selfless warning to humanity, or part of an elitist propaganda campaign?

Serious depletion will be impossible to cover up for long, but until all illusions of its non-existence have been dashed, those who advocate for Peak Oil should continue to raise these types of questions.

"I've wondered for a long time if the current Peak Oil crisis isn't manufactured, and that while oil resources are certainly being depleted at a furious pace, if the situation isn't as bad as portrayed."

Of course, there is the fact that world oil production and Saudi oil production are behaving precisely as the mathematical and historical models predicted that they would, but most people are going to prefer to believe the conspiracy theories, partly because of the B.S. sent their way by the "Iron Triangle" members.  


First, let me say that I hold high respect for your numbers crunching, and will accept your numbers quicker than most of the stuff I see from USGS or EIA, which seem to me to be "whistlin' past the graveyard" stuff, where never is heard a discouraging word...:-)

You say " The other three--North Sea; Kuwait and Mexico--are all around the 50% of Qt mark.  Last year, Saudi Arabia was at 58%."

In the case of Suadi Arabia, to know what 58% Qt is, we have to know what Qt is.  Franky, I am not sure we do,  in fact, I am more convinced each day we don't.  I have seen numbers differ from various sources by an order of magnitude of at least 2.5, and the difference of two and a half times of something would move the halfway point considerably.  

" Of course, there is the fact that world oil production and Saudi oil production are behaving precisely as the mathematical and historical models predicted that they would, but most people are going to prefer to believe the conspiracy theories...

Of course, if we look at 1980 through 1985, we see a drop in Saudi and world production that would indicate (to many people, it did indicate) that we must have been over 50% of Qt then, drops in production that were far longer and more substantial than they are today.  The drops would been been perfect for "peak 1980" when compared to HL models, but we now know that it was in fact a logistical/economic/political "peak".  You are the one that demonstrated to me where to look for a real "geological" peak (Texas,  Lower 48, North Sea are textbook cases), I am just not sure that we have any real knowledge of Saudi and OPEC in general, a very dangerous situation.
Lastly, on the "manufactured peak" theory, I don't buy into that but I must say, the constant fear and rumor of peak has certainly done no harm to the oil companies! :-)

Roger Conner  known to you as ThatsItImout

Of course, if we look at 1980 through 1985, we see a drop in Saudi and world production that would indicate (to many people, it did indicate) that we must have been over 50% of Qt then, drops in production that were far longer and more substantial than they are today.

Sorry Roger, but that is simply not so. Everyone knew why Saudi oil production dropped in the early 80's and no one thought it was because Saudi had peaked. We had a little thing called the Iran-Iraq war. There was a thing called the "Tanker War". Tanker traffic in the Persian Gulf was cut to a fraction of what it was at its peak because of this war.

Saudi production started to drop in 1982 and reached its lowest point at the very height of the Tanker War in 1985.

Significantly, Iran became more aggressive in attacking shipping because of the U.S. naval presence.<106> Between 1981 and April 1987, when the U.S. reflagging was announced, Iran struck 90 ships; in the little over a year thereafter, Iran struck 126 ships.<107> As the Congressional study noted, "shipping in the Gulf now appears less safe than before the U.S. naval build-up began."<108>

No one, I repeat no one thought the drop in Saudi production beginning in 1982 was because they might have peaked.


Frrst, let's take a visual look at Saudi oil production history from the EIA "official numbers


Now of course, we see something interesting  right off the bat.  We notice that talk of a "plataeu" should have been raging through the 1990's, when oil was at record lows, inflation adjusted.  Such talk was no where to be found.

Now, let us back up to approx. 1982.  What we see is a catastrophic drop for almost a half decade, then a rebound1985 to 1986, a setback of some magnitude again to 1988, and then a flattening yet again to 1990.  Now we have to recall the history here.  Fuel was so cheap in most of this period that the oil industry was bleeding to death.  There was no such thiing as TOD or http://www.peakoil.net, and Matt Simmons was still a happy oil investment banker, not the phophet of the end fo the oil age.

The discussion we are on at the moment is that the Saudi drop was caused by the "Tanker Wars".  Now I remember that period, and remember some discussion of the "Tanker Wars" but was not aware of that particular issue being given responsibility for the Saudi Drop in production.  We do know they must have indeed been some kind of tanker war, if we look at that period and see the worldwide drop these "Tanker Wars" must have been responsible for.  A look at the standard ASPO chart shows the "big valley" of the early 1980's:

I ask anyone to help try to square that history (and again, these would have been the known numbers) with HL models (and they did exist then, but where known to maybe three dozen people in the world)  without coming to the conclusion that Saudi Arabia was peaked, and in fact, so was the world (and I remember VERY CLEARLY reading, and believing that at the time, it was the birth of my fascination with energy and alternative energy technology).  Look at Saudi Arabia again:  Complete collapse, attempt to recover, and then, fall back mild brief recovery, then fall back again.  Would anyone really have assumed this was from the so called "tanker wars" at the time?

Now of course, a slightly different set of numbers comes from The Saudi Amrerican Forum, a well known lobby group for Saudi Arabia.

(under the year, the top number is M/barrles a day, the bottom one is price per barrel)
1973 Average
7,596 mbd
5.37  $

1974 Average
8,480  mbd
11.63 $

1975 Average
7,075 mbd
12.50 $

1976 Average
8,577 mbd
13.06 $

1977 Average
9,245 mbd
13.69 $

1978 Average
8,301 mbd
13.94 $

1979 Average
9,532 mbd
18.95 $

1980 Average
9,900 mbd
29.80 $

1981 Average
9,815 mbd
34.20 $

1982 Average
6,483 mbd
34.99 $

1983 Average
5,086 mbd
29.27 $

1984 Average
4,663 mbd
29.20 $

1985 Average
3,388 mbd
24.72 $

1986 Average
4,870 mbd
12.84 $

1987 Average
4,265 mbd
16.81 $

1988 Average
5,086 mbd
13.37 $

1989 Average
5,064 mbd
17.34 $

1990 Average
6,410 mbd
21.82 $

1991 Average
8,115 mbd
17.22 $

1992 Average
8,332 mbd
17.48 $

1993 Average
 8,198 mbd
15.40 $

1994 Average
8,120 mbd
15.11 $

1995 Average
8,231 mbd
16.84 $

1996 Average
8,218 mbd
20.49 $

1997 Average
8,362 mbd
17.52 $

1998 Average
8,389 mbd
11.16 $

1999 Average
7,833 mbd
17.48 $

2000 Average
8,404 mbd
26.58 $

2001 Average
8,031 mbd
20.98 $

2002  Average 
7,634 mbd
24.77 $

2003  Average 
8,848 mbd
27.44 $

One can find no number as high as 10mbd which the EIA chart seems to indicate, however, one sees again that long "plateau" through the 1990's.

We do see the 10 m/bd per day number again in the glowing Saudi Forum link which says, "Current daily production capability stands at 10 million barrels of crude oil and 9.6 billion cubic feet of  natural gas."

By the way, this is an astounding link to read, with the dateline, August 24. 2004, and the byline, "Saudi Arabian Oil Fields Brimming"

It has to be admitted that if the Saudi's were lying, they were doing so in such a bold fashion as to be absolutely criminal, as they took on the Simmons argument, the water cut argument, and boldly declared they could supply the world for 50 to 70 more years, raising production, in their words
"If called upon, the company  can sustain daily crude production levels of 10, 12 and 15 million barrels per day through 2054 and beyond."  (!!!)

We are now two years down the road from 2004, post one of the most catastrophic hurricane seasons in the GOM, post wild growth in consumption in China and India, post declines in the North Sea, far into an Iraq war that has turned out far more damaging and long lasting than expected, and now into yet another Isreali/Arab war that is threatening to spread, and we still have not seen the "SHTF" (stuff hit the fan).

Again, we could go for days with the various "expert and authoritive" sources giving us Saudi Arabian and world recoverable reserves, and possible daily production figures, all of which differ by vast amounts.  This is the greatest threat, FAR greater than "Peak Oil" itself, that being the danger of running completely blind.

But,  we should return to the issue of the tanker wars.  If that is given credit for the giant world wide valley, then we must assume that it is possibly true today.

Today, If I say, "could it be that the price increases in oil are not a geological supply problem, but a geo-political logistical problem caused by (a) Fear factor of 9/11/01, (after all, the planners of the attack, and the killers were Saudi, a point often forgotten now) followed by (b) the Iraq war, followed by (c) increasing tension with Iran, followed by (d) Nigerian tensions, followed by (e)Venesualan tensions, followed by (f) The Israeli Arab war in Lebenon...
the peakers would say,  "that's all window dressing, your just being sucked in by the propaganda, it's PEAK, guarenteed!!  It's here, it CANNOT BE REFUTED!!, but then....

When the last "Peak" scare is pointed out (the late 1970's, early 1980's) they will say, "NAW, don't be a rube, NO ONE thought that was peak, despite the half decade of VERY large production drops AROUND THE WORLD, it was all the Iran/Iraq war and the tanker war, it was geopolitics...(snicker, snicker, we all knew it then..."

Well of course, just as we knew all along who would win a ball game AFTER the game is over, we can say what we please now after the fact, but my memory of that time was that virtually NO ONE thought it was a temporary geopolitical shortage at that time.

A fascinating document discussing the effect of geopolitical crisis on oil price change
http://www.cesifo.de/pls/guestci/download/CESifo%20Forum%202006/CESifo%20Forum%202/2006/forum2-06-fo cus3.pdf

It's just as easy and supportable now, if you could demonstrate the case that the 1970's/80's crisis was geopolitical and in no way peak, to be able to say that the current crisis is purely geopoloitical.  One is as consistant as the other.

What we are trying to figure out, in the interest of personal planning, is "is it different this time?"  Many people pulled in their horns in the late 1970's, and lived cheap, tawdry lives on a minimum thinking that the catastrophic end had come....(I looked at getting an engineering degree in those days.....I had dreamed of working with GM or Ford....my friends and even teachers laughed..."shiit, they won't even be here in 5 years!" they assured me.  Hmmm, sounds like Diji Vu all over again, as Yogi said....)

We have absolutely no way of knowing that this current price run up and hysteria is not simply another geopolitical cycle. After all, it was the last time, and it looked  virtually duplicate to now.  This might finally be the real thing, but if we guess wrong, we won't have to worry about being made poor by peak oil...we will make ourselves poor waiting for it, in missed opportunities, while our friends, family and neighbors race out far ahead of us.

Being wrong on this can be life altering, and the funny part is, if we assume that peak is not coming and it does, we really don't have much to lose, it will cost us everything no matter what.....but assuming peak is here, if it is not, can  COST US EVERYTHING because the opportunities will be there, we will just miss them all (and so will our children and families, by the way.

Running in the blind, with absolutely no usable information.  It is the most dangerous of all possible situations.

To your closing remark, "No one, I repeat no one thought the drop in Saudi production beginning in 1982 was because they might have peaked."

With all due respect, and meaning no personal rancor, I say, poppycock.  Go to Simmons "Trilight" and read the accounts of the very deep concerns about Saudi Arabian production at that time, leading to secret testimony by Aramco and Saudi officials before the U.S. Congress, read the suggestions that still make the rounds to this day that the Saudi's backed off production then due to fear of rate sensitivity that could be damaging their fields and risking reduction of the URR due to "overflood" leaving vast amounts of oil behind and unrecoverable-(Simmons still contends that it may have happened)

If "no one, I repeat, no one" believed that peak was a real danger then, given the situation, the production tables, the water flood, the fear of rate sensitivity and oil left in place, then "no one, I repeat, no one" should seriously fear peak now...we have been there, done that....and by that way of accounting, it don't mean beans.

Roger Conner  known to you as ThatsItImout


coup de grâce

In my prior long post, in which you and I were discussing the idea that the 1982 large drop in oil production could have been mistaken easily as Peak Oil and that there could have been no way not to believe that, you made the assertion...
"Sorry Roger, but that is simply not so. Everyone knew why Saudi oil production dropped in the early 80's and no one thought it was because Saudi had peaked."

 You then went on to assert that EVERYBODY knew the drop in Saudi production was due to a thing called the "tanker war" that is the attacks on commercial and oil shipping in the Persian Gulf by Iran as part of the Iran/Iraq war.

Your closing left no room for debate..."No one, I repeat no one thought the drop in Saudi production beginning in 1982 was because they might have peaked."

In my long reply, you mut have wondered why I went through the trouble of putting in a long set of columns, showing Saudi Arabian oil production from
1973 forward, as provided by the Saudi Arabian lobby group Saudi American Forum, soursed from the EIA of the DOE. What was that for, what did it have to do with anything?

It was for one purpose only...to find out if it is your contention that the "tanker wars" were over yet, or had gone on uninteruppted since 1982 right down to 2003?  Below is my excerpt:

Now of course, a slightly different set of numbers comes from The Saudi Amrerican Forum, a well known lobby group for Saudi Arabia.

(under the year, the top number is M/barrles a day, the bottom one is price per barrel)
1973 Average
7,596 mbd
5.37  $

1974 Average
8,480  mbd
11.63 $

1975 Average
7,075 mbd
12.50 $

1976 Average
8,577 mbd
13.06 $

1977 Average
9,245 mbd
13.69 $

1978 Average
8,301 mbd
13.94 $

1979 Average
9,532 mbd
18.95 $

1980 Average
9,900 mbd
29.80 $

1981 Average
9,815 mbd
34.20 $

1982 Average
6,483 mbd
34.99 $

1983 Average
5,086 mbd
29.27 $

1984 Average
4,663 mbd
29.20 $

1985 Average
3,388 mbd
24.72 $

1986 Average
4,870 mbd
12.84 $

1987 Average
4,265 mbd
16.81 $

1988 Average
5,086 mbd
13.37 $

1989 Average
5,064 mbd
17.34 $

1990 Average
6,410 mbd
21.82 $

1991 Average
8,115 mbd
17.22 $

1992 Average
8,332 mbd
17.48 $

1993 Average
 8,198 mbd
15.40 $

1994 Average
8,120 mbd
15.11 $

1995 Average
8,231 mbd
16.84 $

1996 Average
8,218 mbd
20.49 $

1997 Average
8,362 mbd
17.52 $

1998 Average
8,389 mbd
11.16 $

1999 Average
7,833 mbd
17.48 $

2000 Average
8,404 mbd
26.58 $

2001 Average
8,031 mbd
20.98 $

2002  Average
7,634 mbd
24.77 $

2003  Average
8,848 mbd
27.44 $

Your remarks:  "Saudi production started to drop in 1982 and reached its lowest point at the very height of the Tanker War in 1985."  Astute on your part, and the chart I provide above agrees with your contention on Saudi production, made before I replied, so you must be working from the same stats....but that leaves a mystery....to repeat, you say, "No one, I repeat no one thought the drop in Saudi production beginning in 1982 was because they might have peaked."


From 1973 to 2003...yes, the peak year IS INDEED 1981.

Until 2003. Saudi Arabia's PEAK YEAR WAS 1981 AT 9.815 MILLION BARRELS PER DAY.

For those who somehow believed that Saudi peak was caused by "the tanker wars", it must create a problem in their logic to explain that the Iranian tanker wars continued uninteruppted until 2003.  :-)

Roger Conner  known to you as ThatsItImout

"From 1973 to 2003...yes, the peak year IS INDEED 1981."

Matt Simmons discussed the early Eighties production in his book.  He thinks that the Saudis may have damaged their fields with the very high production rates.  There is an analogue, the East Texas Field, that had its absolute peak in the Thirties. Production was then curtailed by the RRC, because of the damage to the reservoir--and because the flood of oil had driven the price of oil down to 10 cents per barrel.  The secondary, lower, peak was in 1972, followed by a terminal decline.

In any case, based on the HL method Saudi Arabia, in 2005, was where Texas, the prior swing producer, was at in 1972.  

The Ghawar Field has already made about 10 times as much oil as the East Texas Field--the largest oil field in the Lower 48.  

Ghawar has already made about five times as much oil as Prudhoe Bay will ever make--the largest oil field in North America.

According to Simmons, a retired Aramco executive said that maximum URR would be 70 Gb for Ghawar.  The Saudis have produced about 85% of that.  We know that the remaining oil column is between a rising water leg and an emerging gas cap.

A decline/crash in oil production in Ghawar has been one of the most widely predicted events in petroleum history.  Why should any of us be surprised when we receive reports of that very thing.  

Everyone is asking for confirmation of Dr. Heinberg's report.  I think the fact that total Saudi oil production is down about 7% since last year, while oil prices are up by 15% to 30% is more than sufficient confirmation.  

(The following is set to the tune of "The Music of the Night" from "Phantom of the Opera.")

"It's over now, the lifestyle we once knew. . ."

Roger, for starters I don't know why you posted almost the same post twice. You must have been really pissed off.

I was in Saudi Arabia, working for Aramco, from 1980 until 1985. I read the newspapers and newsmagazines from home and I know everyone back home was concerned with the tanker wars and I know that all of us in Saudi were even more concerned. I was also concerned with the great gobs of tar that was washing up on the beaches at Ras Tanura at the time. But the point is Roger, if you will just look at the data from all other Gulf states, you will see that oil production from all Gulf States fell during that period. Now no one in their right mind would surmise that all the Gulf States were peaking at the exact same time.

Second I have read "Twilight in the Desert" and Matt clearly states that there was a fear that they were overproducing Ghawar and perhaps other fields, but nowhere does he discuss the possibility of Saudi peaking in those very early days.

Third, I have lived and followed the oil situation very closely for the last 25 years. Everyone that knew anything knew that OPEC held oil production low during the 90s to keep prices low. OPEC inched up on production during the late 90s and prices collapsed. Then they shut the taps again beginning in 2001 and held them low for a little over two years. Then they all started to produce full tilt and have been ever since.

True we were concerned with peak oil in 2000 but we anyone that knew anything knew OPEC still had their hand on the choke valve and were not producing at full tilt. Now they are and that is the difference. The vast majority of us peakers, in 2000, were expecting the peak some time between 2005 and 2010. (Actually there were not very many of us back then.) I was a member of the Running on Empty list, and the Energy Resources list which started, I think, in 2001, and only one man on the whole damn list was arguing that OPEC's swing producer, Saudi Arabia, had peaked.

Bottom line Roger, you are trying to say that we could very easily though Saudi Arabia peaked much earlier because of their up-down pattern of oil production. Well, perhaps a few idiots did make that mistake. But the vast majority of us knew very well that OPEC was manipulating production and that the production swings was due to OPEC control and not anyone peaking.


You opened with the line, "Roger, for starters I don't know why you posted almost the same post twice. You must have been really pissed off."

Have no fear of the pissed off thing, I am too busy chopping on a bigger tree than than that! :-)

The twin post was an organizational thing, because I was making two seperate cases in my own mind, the first discussing our difference of opinion about the "perception" of Saudi and world "peaking" and the effect of the "tanker wars", you see the latter as the bigger percieved threat at the time, and the former as non discussed, while I see the former as virtually non-existant as a percieved real threat, while the latter (although in those days, we did not have the "Peak" word or concept in the popular press, we are so media savvy these days, and people back then used the mis-applied phrase "running out" almost exclusively)

And seperately, the "historical sourcing" showing that, well, Saudi Arabia did indeed peak in 1981, at least on out to 2003.  (Something, astoundingly, most people do not seem  to know) so I divided the two main  points as two posts, as the posts were going long anyway, as you must have noticed.

Now, back to the present, and the point you denote as "third" and you closing sentence, which is at the heart of where I am chopping!  

You indicate a whole lot of "tap" turning there, Darwinian, loosening, closing, raising, lowering production at will on the part of the Saudi's.  Then, at 2001, you say, "Then they all started to produce full tilt and have been ever since."
(think of what a miricle of consistancy the all became, and at once! :-)...and just as the price shot off to the sky....weren't they lucky, one more time?!)  :-)

Let me make my point directly: on that sentence, "all started to produce full tilt and have been ever since."  I don't think there is a way in the world we can know that to be true in any way, ( It may be.  It may not be) and I would be willing to BET THEY ARE STILL CRANKING AROUND ON THE TAPS.  It may be.  

 You yourself have shown a history all the way through the 1980's and 1990's of moving production at will by the Saudi's, up down, on and off, shifting from field to field, that indicates that from our end, there is NOT A POSSIBLE WAY to connect Saudi production to Saudi geology.  I just don't think it can be done.  And I am willing to bet that the rest of the OPEC countries are just as confusing and convoluted in their production picture, TODAY.

You say, "Bottom line Roger, you are trying to say that we could very easily though Saudi Arabia peaked much earlier because of their up-down pattern of oil production. Well, perhaps a few idiots did make that mistake."

Well of course, if it was so easily a mistake then, it could just as easily be a mistake now.  Those who dismiss "peak" sure enough call the folks today who use oil production as an indicator of production capability are indeed regarded by the world as the current "few idiots" making that mistake again, the same one made in the 1980's.  I mean really, no offense, would anyone except only the very niave say, " "Then they all started to produce full tilt and have been ever since."...(and the world lived happily ever after....
  Except for oil production charts here on TOD, what other real evidence can we produce?  There actually is one, the one that Westexas references so often, and the heart of the "Peak" metric, HL.  The Hubbert method works, but only if you can be absolutely certain about total quantity of URR.  I make the argument that no one has any real idea of Saudi, OPEC, and by extension, world URR.  I have said before that the the URR numbers given would range, as an example, somewhere between the volume of a beer can and the volume of a tanker truck  (folks, this is only slightly an exageration, the difference you see in published reports are VAST).  The great reason that Texas, U.S. lower 48, and even to a slightly lesser extent, the Atlantic North Sea are such great examples of the Hubbert method's effect is because there was such an open reporting of what was originally there, and the changes in URR (technology does make it a moving number) over the years.  In the OPEC regions, we are now out at a third of century of almost absolute secrecy, and the better part of a century of convoluted and misleading and confusing stats.

Darwinian, let me tell you where you EXACTLY HIT THE NAIL ON THE HEAD, and exactly what has caused me to to spend valuable time at work on this now:  YOU SAID:
"But the point is Roger, if you will just look at the data from all other Gulf states, you will see that oil production from all Gulf States fell during that period. Now no one in their right mind would surmise that all the Gulf States were peaking at the exact same time.

AND YET, that is exactly what is being surmised today, and in fact, not just every field in the Gulf, but almost every field IN THE WORLD.  If you have seen my prior posts on this, it is this that SET OFF THE ALARM BELLS FOR ME NOW!

Suddenly, the press has jumped on the bandwagon, and we see claims that the reserves that were percieved to exist only a few years ago in the world are suddenly, without even being drilled, ALL GONE!  Russia, Siberia, offshore Australia, offshore South America, on and off shore Africa, polar oil, deep offshore ocean, offshore and onshore Canada, remaining reserves in the U.S., the U.S. Outer Continental Shelf, and all the oil once percieved still available in the Persian Gulf and offshore there, SUDDENLY GONE!!  And not only that, even vast amounts of once percieved natural gas is GONE!  Stranded gas, tight gas, deeper well gas,  all GONE!, in a heartbeat, without even being explored for!

Now I know the above is an  exaggeration to make by me to make a point, but if you read the popular press and the most hysterical of the peakers sites and writings, it PALES as exaggeration to what you see spreading in the media (and the MOST hysterical seem to be gaining very rapidly as a percentage of the total) ...this is the kind of perception they are putting out there to the masses.  If one were suspicious (I am) it would seem that a completely catastrophic panic is exactly what is wanted, and based, as yet, on no evidence of collapse (maybe tommorow, but not today...)

In other words, the production stats and the HL, both based on honest straight up production by the Persian Gulf nations and the world to get a clear picture to work with, in my view can rely on NEITHER OF THE ABOVE, and further, the HL model relies on a trustworthy number as an assumed URR, which I don't see existng, at least in much of the world (and the percent of the world that is given to that type of openness is declining very fast)

Your closing sentence was the icing on the cake:

"But the vast majority of us knew very well that OPEC was manipulating production and that the production swings was due to OPEC control and not anyone peaking."

Fascinating that you would use those words, "manipulating production",  and "OPEC control".  (when those who had doubts as to whether what we see now can be used as any kind of evidence of a geological peak, they were dismissed rudely as being "duped" by the "iron triangle".

And yet, if control and " "manipulating production"  then could create a situation where as you point out, every Gulf state and in fact world production could drop for a half decade, and Saudi Arabia could stand at "plateau" for the full decade of the 1990's  ("plateau" is now being painted by some here as something all new and threatening, but would you mind going back to the 1990's on fuel price and economic conditions?)


Darwinian, in one of those great little moments of irony, just as I am finishing this post, with the ABC News going on in the background, and having read your sentence about those war days of the 1980's, I quote you,

"I read the newspapers and newsmagazines from home and I know everyone back home was concerned with the tanker wars and I know that all of us in Saudi were even more concerned. I was also concerned with the great gobs of tar that was washing up on the beaches at Ras Tanura at the time."

RETURN TO 2006:  ABC NEWS reporting on Sunday night, August 6th, that there is grave concern on the part of environmentalists due to the oil spills washing ashore in Lebenon and the coast of Israel due to war damage from missile and air strikes on coastal ports and shipping, and in the Persian Gulf, due to massive damage of oil supply pipelines, tanks, and pumping facilities in Iraq, now coming down the rivers, there is an rapidly increasing amount of crude oil washing ashore on the coasts of all Persian Gulf nations.  The United Nations and the Arab League, according to some, are being asked for emergency meetings/action.

Compare 1981 to 2006.  BUT THIS TIME, we say, IT'S DIFFERENT.  This time, the war has nothing to do with it, geology is everything.  This time, unlike 1978 through the early 1980's,  THERE IS NO MANIPULATION OF PRODUCTION, why they are so sweet to us, all pumping "flat out".  Do we really believe that?  (I wil remind of 9/11 and turn you to a source

  THIS TIME, IT'S DIFFERENT.  The truth is, it really could be, there is evidence indicating it is.  At some point the geology HAS TO CATCH UP, and the global warming issue is becoming crucial to address or ignore, WE HAVE TO CHOSE, right now we are taking the worst of all possible paths

THIS TIME, THERE IS NO CHANCE OF IT NOT BEING THE REAL THING.  PEAK (or as many magazines and books still say, just as in the 1970's, we're running out...)  
 But it will be almost impossible, no let me re-say that, COMPLETELY IMPOSSIBLE TO KNOW.  Most of the public do not accept THE DIFFERENCE.  They are sure that just as the 1990's followed the 1980's, the price WILL COME BACK DOWN, the tide will turn, and we will be back to "Morning in America"  (the most horrific, terrible thought of course to the peakers is, (sacrilige alert) WHAT IF THEY ARE RIGHT?  (chills, brrrr, please, please DON'T EVER SAY THAT!

(but.....shiver.....could it be.....geopolitical, logistical, economic, turning up and down the taps by the OPEC gang, and the world.....as you say, "manipulation and control".....as it was in the 1980's......is there even a fine thin chance, that we could see people acting agains as they have acted before, they they have not somehow become honest and clean?  Is there?

Editorial here:
IF the "peak crisis" comes, even the peak aware will be surprised by when, where and how, and no scenario will be able to predict it.  It will be like a thief in the night, and just as cagey as one.  These so called "prep plans" will look idiotic compared to the event as it unfolds.

And on the other side, if peak crisis is averted, the future will be so dazzling, so confused, so in flux, with careers and options so confused, overchoice of options being almot mind bending, technology so bizarre, social arrangements and political and energy arrangements so convoluted that many will pray that the peak had happened, that they would have gotten the "New Dark Age", the simpler life of Gothic hunger, labor and penury, that would seem like a quiet peaceful paradise compared to the mix of "Brave New World", "1984", and "Blade Runner" plus that will be in wait for us.

Raw terror and "Future Shock" will be a bigger threat than this so called "Peak thing" could have ever been.

And you will be running, AS WE ARE NOW realizing we are today, COMPLETELY BLIND.  That is the greatest danger.

(like I said, I am chopping on a bigger tree, so thanks for bearing with me and the feedback and opposing view.  Darwinian, are you and is anyone other than me starting to get suspicious of the "simple stories" we are given from all sides?

Roger Conner known to you as ThatsItImout

Update postscript:

Well, well, well....it's happening again...


 "OPEC oil output fell an average 250,000 barrels a day to 29.61 million barrels a day, according to the survey of oil companies, producers and analysts. June production was revised 60,000 barrels a day lower. OPEC's 11 members pumped 30.54 million barrels a day in October 2004, the highest since 1979.

 ``Saudi Arabia, Iran, Kuwait and Nigeria all posted minor declines in output,'' said Tim Evans, an energy analyst at Citigroup Global Markets Inc. in New York. ``It's unusual to see so many members' output move in the same direction.''

Despite Darwinian's assertion that it couldn't have happened, that "only an idiot would believe it" in the 1980's, IT LOOKS LIKE THEY ARE ARE ALL PEAKING AT THE SAME TIME AGAIN!  :-)

Is this JUST GETTING TOO RICH OR NOT?   Gee, I wonder how many "idiots" believe it this time?

....oh, they suddenly noticed the Alaska pipeline was rusty!!  hee, hee, and had no warning before yesterday, despite constant daily inspection!!

give me a break....... (you know what I just noticed, by the way....despite all the predictions by the hysterics we are pushing to the edge of autumn and crude wouldn't go over $80 bucks, much less the assured $100 dollars a barrel.....and now some folks are by golly going to SEE THAT IT DOES, WHATEVER IT TAKES!! :-O

do they see us as too stupid to see this?

Roger Conner  known to you as ThatsItImout

BP has been affected by a trading scandal, a refinery explosion in Texas City, Texas, subsequent fines imposed because the refinery was run with violations of federal laws and safety regulations, and at least 2 prior pipeline spills in Alaska in the last 12 months. After those last 2 spills they probably looked at the entire pipeline, something that can take months to do properly, and found far more maintenance defects. Facing the potential for yet more fines and further legal action if another large spill occurred, they chose to shut it down and fix it. And you act like this was a surprise?

Let's look at Kuwait. Burgan is in decline. It's admitted by Kuwait itself now, something that did not happen in the 1980s. We've also been discussing this here for a year.

Nigeria is suffering from a civil war that is simply preventing supply from reaching the market. This has happened throughout the world since we began pumping oil. The only difference is this time the market is tight. And this civil war has been going on for a while now. No surprise here.

Iran's output is roughly steady and any decline there is probably political payback to George Bush and the European nations.

Mexico's problems have been discussed for going on two years and now they are starting to come to fruition. This is no surprise.

Finally, as for Saudi Arabia, it's output is declining as oil prices are rising. Why? During the early 1980s, Saudi Arabia's prices declined during the so-called tanker wars as prices declined. Yet the Saudi fields have been under scrutiny and questioned heavily for over a year now as well. Again, this is no surprise.

You are so enamored of conspiracy theories that you refuse to see the forest for the trees. You also forget that the first decade of the 21st century was Hubbert's prediction for global peak, which would mean that many fields would have peaked before or about this time.

And then you have the gall to call anyone who disagrees with you "idiots". Are you going to tie in the North Sea declines to your conspiracy fetish? How about the last 30 years of US declines? And before you give the "running blind" rant again, if you can choose to discard all the evidence so far, then we can choose to discard you as well. Without some proof that the current data is so badly flawed as to be useless, your assertions lack substance. So far in all your rants you've given us nothing but rhetoric. If you have evidence, then share it for us to evaluate. And if you don't, then excuse me while I ignore your mile long repetitive and empty rants.

most people are going to prefer to believe the conspiracy theories, partly because of the B.S. sent their way by the "Iron Triangle" members.

That's a tad unfair. Rest assured that I'm not trying to denigrate the great charts and detailed depletion figures that you post, but just engaging in a bit of speculation. For those who aren't as intimately associated with the oil industry as yourself, it is natural to question Peak Oil and the way its playing out.

Not everyone who doesn't trust Big Oil deserves to be labeled a "conspiracy theorist." Examining issues from different angles is a good thing, I think.

I've wondered for a long time if the current Peak Oil crisis isn't manufactured, and that while oil resources are certainly being depleted at a furious pace, if the situation isn't as bad as portrayed.

At the end of the day, these are just electronic bits pouring out of the Internet. You never know what is "true" and what is mostly a load of bull bits.

No one knows for sure what lies undiscovered beneath the ground. There is an outside chance the Cornucopians will turn out to have been right. There is a possibility the doomers are right. We will probably never know for sure one way or the other.

We will probably never know for sure one way or the other.

If the doomers are right EVERYBODY will know!

If the doomers are right EVERYBODY will know!

Not you and I.
We will both be dead before "they" admit the doomers were right.
And "they" will perform an honorable disappearance act, riding off into the sunset, before ever admitting they might have been wrong.

When was the last time "they" admitted they were wrong?
Brilliant Pebbles?
Ronald Raygun?

When was the last time Doomers got to crow: We was right?
Easter Island?

It just doesn't happen that way.

"When was the last time Doomers got to crow: We was right"

I have every intention of walking the 300 miles to my brothers house through the Mad Max future just so I can tell him I was right.

It occurs to me that, for anyone looking at these internet posts 200 years from now, the doomers were wrong ;-)
Yes. What is holding it all up? Can't be much.

 "Is (Matt Simmonns) drive to discredit the Saudi reserve figures a selfless warning to humanity, or part of an elitist propaganda campaign?"

And to what end? To help maximize profits for oil companies? As well as to encourage establishment of a permanent base of US operations in the Mid East?

Or "if it is true" does it not matter so much what are his motives. We are left to do with the information as we will.

I sort of agree with your last point, buts motives for presenting information in a given way certainly do matter. As to your question, "To what end?" I can certainly envision a scenario where gas prices are deliberately driven up to both maximize Big Oil's profits, as well as to effect demand destruction. The less that people are able to drive, the longer the supply of oil will last. Everyone knows that the "powers that be" will always take care of themselves first, at the expense of the commoners.

Everyone knows that the "powers that be" will always take care of themselves first, at the expense of the commoners.

Perhaps you are giving the "elites" much more credit for brilliance and cunning than they deserve. Perhaps they are simply practicing their religion, Smithianism with great devotion, and lo and behold the Market takes care of them?

As the white-haired Barbara Bush is fond of saying, "The're doing as best as they can for themselves."

You certainly could be right; indeed I hope you are. I just tend to be cynical when it comes to politicians and the "powers that be."

Yeah the motives do matter. Unless maybe they are born of concern for our vulnerability and fear that resource wars will end up benifiting nobody.  None of this 'supply tightness' has hurt oil company profits I'm sure.
But I'm having a little trouble assigning much sinister to Simmons. His advocacy of renewables, rail and conservation are in line with many TODers ideas. He probably has done well enough on his own that he doesn't need to be 'beholden' to Cheney or be in a Bush/Saudi pocket.

Seems to me that acknowledgement of HL paints all the 'agendas' out there onto a common background. No matter how we play it we are in a pickle and our legacy ought to be one of working on a successful powerdown strategy. I hope that's what Simmons is after, he certainly has provided plenty of fuel to those with that agenda.  

On your last point, I couldn't agree more. The pickle that we're in is getting more bitter by the second. I've read Heinberg's Powerdown and The Party's Over, and feel frustrated because the peril we face is so clearly presented, but nothing will ever be done in time to allow for any kind of soft landing.

I'm certainly willing to accept your point on Simmons. Part of my distrust came from something I read which indicated that he was part of Cheney's infamous "Energy Task Force" meetings that took place early in 2001, for which the records still have not been revealed. What a huge, stinking mess this all is.

If Matt Simmons is saying what he's saying only because he's in bed with Dick Cheney then I'm maintaining my site only cause I'm in bed with Jenna Bush.


Was it good?

I'm guessing that you're joking, but my point on Cheney and Simmons wasn't that such an association was conclusive evidence that the his info was bunk, just that it was unlikely that anyone in that inner circle would release information that was for the general good. Weak reasoning, I know, but given their track record, certainly not unwarranted.

"but my point on Cheney and Simmons wasn't that such an association was conclusive evidence that the his info was bunk, just that it was unlikely that anyone in that inner circle would release information that was for the general good."

If Bush/Cheney/Rumsfeld (BCR) weren't already aware of Peak Oil, Matt Simmons' comments certainly helped convince them.  People always ask, "Why didn't BCR listen to Simmons?"  I reply that they did listen.  Why do you think we have 135,000 troops in Iraq?

In any case, IMO you are barking up the wrong conspiracy tree.  To the extent there is a conspiracy, it is a de facto conspiracy to persuade Americans to continue buying and financing large homes and autos.  

As I have repeatedly said, if you follow my ELP recommendations, and if I am wrong about Peak Oil, you will have a lower stress way of life, you will have less (or no) debt, and you will have more money in the bank.

I'm certainly willing to accept that point of view, and I appeciate your feedback. Despite my earlier statements I do think you're right about Peak Oil -- I just like to play the "devil's advocate" and examine different scenarios to see if they make sense.

I'm just impatient for the evidence of our predicament to become so clear that virtually no one can miss it, thus shattering the conspiracy to encourage us all to continue to be good little consumers in order to "help" the economy.

Exactly what I was thinking!

"ThatsItImOut" is saying that we're missing opportunities -- but this way of life ISN'T sustainable -- it's ridiculous!  How can we expect to make 8% or more a year on the stock market, waste tons of energy and food, etc.?

The way of life "Peakers" advocate is simpler, more stress free, more natural, and better for all parties concerned.

What's wrong with not being materialistic (=buying junk) and worrying more about things that matter (knowing how to make things for yourself, cultivating local and family relationships, etc.)

And what's wrong with having the mortgage paid off, getting out of debt, and having a smaller car?

The fact is, the source of the oil shortage (geology or politics) is so beyond us, it is a good idea to simply become LESS DEPENDENT on oil and everything derived from it.

We can never lose this way.


The key question is, what was Ghawar producing at the end of 2005?  Simmons assumed that the field was producing about 5 mbpd when he wrote his book, but here is a parenthetical comment on Page 154:  

"There have also been occasional references suggesting that Ghawar might now (early 2005) be producing closer to 4 mbpd.  The fact that this key piece of information is still a matter of guesswork illustrates the extent to which real data about so many aspects of Saudi Aramco oil is lacking."

From a previous post
In 1970, Saudi's giant Ghawar field, which still ranks as the world's largest oilfield ever discovered, was producing just over 2 million barrels a day. This field finally peaked in 1990 when it briefly produced in excess of 6.5 million barrels per day. This production rate resulted in some damage to the reservoir and the field was never again produced at such a rate.

From 6.5 mbpd to 3.0 mbpd is a 5% a year decline. This sounds entirely reasonable and possible to cover from other fields. The coming collapse of Ghawar everone has been expecting and have been basing their predictions of Saudia Arabia's and the world's peak of oil production may have happened gradually over several years with no one noticing. Now what are you going to base your predictions of the collapse of oil production on?

I'm not sure I wouldn't feel better if Gharwar WAS down to 3 Mbl/day, as even with that if it's the case, we are still not clearly past Peak.  On the other hand, if Gharwar is still at 5.5 Mbl/day and world liquids have been flat for a year or so, the coming free-fall in Gharwar output that is widely predicted - maybe just starting - would likely take world output down with it.  The further we - and Gharwar - have to fall from today, the harder the landing.

However, I would add a phrase that many on TOD would be familiar with - "extraordinary claims require extraordinary evidence".  


I find the point about the Saudi  market crash especially interesting. I knew about it at the time but didn't give it any special attention..  I'm curious did you think of this connection on your own or did you get from somewhere or someone else?

When you say "because of heavy insider selling?" Is this just your opinion or was it the reason circulated in the media and on Wall Street. If it was in fact because of insider selling it is another ominous sign.        

How transparent can the Saudi stock market be? I was under the impression the entire economy was quasi-run by the royal family and those close to the royal family. Isn't everyone in the know technically an 'insider' there?
The Saudi stock market is up more than 100% over the last three years.  Not exactly a crash, in my opinion.

Whatsmore, peak oil doesn't mean peak revenues for Aramco.  Peak production or not, revenues at Aramco should continue to soar for about another 50 years.

And your point is? The US stock market is up too, if I pick a point far enough back, but right now it's down from it's most recent peak, isn't it?

So let's look at what Saudi Arabia's markets have done _this year_. In fact, let's look at 2 important numbers from Saudi Arabia. First is the General Market Index.

Note that the general market index is down by 35% for from the February 2006 highs. This is the crash to which westexas referred.

Next consider the more important Tadawul All Shares Index (TASI).

Again, here we see the tremendous crash since February, where the TASI is down by about 50% from its high in February.

You have just stated that the Saudi market has not crashed. I am telling you that from the near term perspective it has tanked totally, flopping on its ass. If the Dow Jones lost 50% of its value NOBODY would dare say it had not crashed. Do you still think the Saudi market has not crashed? If so explain your reasoning because this IS a crash.

Emerging markets "crash" all the time.  They're very volatile.  Put some charts up for Brazil, Thailand, Kuwait, Emirates or almost any other third world country over the timeframe you're looking at and you'll see the same thing.
First you say it didn't crash and now, caught with a CHART in your face, you try to cover up like a kitten caught on a tile floor by giving excuses for the crash.

But it did crash, didn't it?

Thanks for agreeing with me and admitting your error.

Re:  Saudi Stock Market Decline

Note that the decline started around 3/1/06.  We discussed this when the news first broke about the Saudi oil production decline.  The stock market decline was widely attributed to selling by insiders, i.e., the royal family.

One could argue that rising oil prices in a post-peak environment would more than offset the production declines, but what if the decline the Ghawar Field was so great that it almost literally scared the crap out of the Saudi princes, and they were determined to get the money out of Saudi Arabia ASAP?  

Note that Saudi Arabia is highly dependent on this one field, which was, perhaps until recently making on the order of the same amount of oil (crude + condensate) as the entire United States, including the North Slope.  I would say that the Saudis were highly dependent.  What if the princes found it was crashing?

Saudi Stock Market Continues to Decline
Arab News - 29/07/2006


Arab stocks moved within a narrow trading range last week, but financial analysts predict that the downward trend could remain dominant in the coming few weeks mainly due to the performance of listed firms.

The Saudi stock market continued to decline last week after plunging more than 20 percent over the past two weeks.

Chart:  http://www.ameinfo.com/financial_markets/Saudi_Arabia

Attributing the 2006 Saudi stock market correction to peak oil is ridiculous.  

The Saudi stock market correction began and continues as part of a global correction in all emerging market stock markets.

See: http://www.schaeffersresearch.com/commentary/bernie_observations.aspx?ID=16152&c=berniefeed

Stock markets began declining at the same time as the Saudi stock market in places as far flung as Brazil, South Africa, Turkey, and Thailand.  No emerging market was spared.

The declines were greatest across the entire ME (not just SA) since this is the region which had experienced the biggest run up prior to the correction.

See: http://bigpicture.typepad.com/comments/2006/03/mideast_stock_s.html

And no, this wasn't an inside job.  I have yet to witness a case of insiders losing significant amounts of money in the stock market, here, in SA, or anywhere else.  As usual, it was the latecomers who got burned.

See: http://www.asharqalawsat.com/english/news.asp?section=6&id=4137

The whole episode was very reminiscent of the Nasdaq crash.  In the final two years of the bubble, more people poured their money into tech stocks than had in the previous twenty.  These were the least informed of the amateurs and, as usual, these were the people who got burned.  

The Saudi stock market, as well as all other emerging markets, and non-emerging markets, will reach their lows for the year in October.  This has nothing to do with peak oil.  

Commodities, including oil, will also see heavy declines, some of the highest flying commodities may lose as much as 50% of their value.  Oil will probably bottom near $57 in mid november, since commodities typically bottom several weeks after their respective stock indexes (in the case of oil, that would be OSX).  

BTW, Heinberg posts an apology below, in which he sounds more like O.J. Simpson than Paul Revere.

Excerpt of Dr. Heinberg's comments (emphasis added):

"I really shouldn't quote anonymous sources, which I did twice in this article. It was prepared rather quickly, and in the latter case (re:Ghawar) there was very strong temptation because of the quality of the source."

"Attributing the 2006 Saudi stock market correction to peak oil is ridiculous."

You don't find it a little odd that the stock market of the largest oil producer in the world crashse just as oil prices are spiking 15% to 30%?

Not at all, after the 150% run up it had in the previous two years.  I'm sure it was obvious enough to the people in SA (to the insiders at least), when the vegetable vender and the lady bagging your groceries at the supermarket are talking about their stock investments, it's time to bail.  

I'm sure the media was saying SA had entered a new paradigm too.  PE's were at all time record levels.  The whole nine yards.

Add to that the fact that emerging markets all over the world collapsed simultaneously and I have a hard time attributing this to Ghawar.

I tend to agree with you. There were so many emerging markets on the way down that it makes no sense to attribute this to "peak oil related" selling. I think it is not credible to cite the SA market crash as evidence of an unseen collapse in oil production. Of course that doesn't mean that oil production in SA is not falling either.
Stop and consider what you are saying. You have said that it's possible KSA is declining yet you also agree with SelfAggrandizedTrader who said "Attributing the 2006 Saudi stock market correction to peak oil is ridiculous."

And yet the Saudi market is not like ours. The Saudi market is dominated by the ruling clan and within that clan information flows secretively like in any royal court throughout history.

So what would cause the Saudi market to crash? Why in February? Despite the mystical faith that chartists place in their charts, there is usually an underlying trigger event that actually starts the slide. Could that event have been the dawning awareness that Aramco would no longer be able to pump as much oil as before? Yes, it could. Was the Saudi market overvalued? Probably, but like NASDAQ, a trigger event probably set it off. I find it very believable that the internal knowledge of KSA's decline could have been that trigger event, just as Enron helped trigger the NASDAQ collapse.

The Saudi stock market had gotten way out in front of itself.  For the first time in SA history, regular people began buying stocks.  The insiders (princes, as you call them) saw this and rightly decided to sell.  The amateur latecomers panicked and sold at heavy losses.  When the selling by the amateur latecomers has finished, the insiders (princes) will jump back in at value prices.

This pattern has repeated itself dozens of times in the US over the past 100 years and will repeat itself many times in SA over the course of the next 50.  

The trigger is likely the same as for all the other markets - rising rates, reduction in liquidity and general risk aversion. Simple as that.
In any case, the stock market is a side issue.  The key point is that our HL models predicted a decline and we have a decline--even the Saudis have admitted that their production is down (they claim it is voluntary).  

Excerpt of Lower 48/Texas article (May, 2006):  

"In summary, based on the HL method and based on our historical models, we believe that Saudi Arabia and the world are now on the verge of irreversible declines in conventional oil production."

If you want to go farther back, here is an excerpt from a January, 2006 guest post that I did (based on Khebab's work) on TOD:


As predicted by Hubbert Linearization, two of the three top net oil exporters are producing below their peak production level.   The third country, Saudi Arabia, is probably on the verge of a permanent and irreversible decline.   Both Russia and Saudi Arabia are probably going to show significant increases in consumption going forward.  It would seem from this case that these factors could interact this year produce to an unprecedented--and probably permanent--net oil export crisis.

I agree with you.  The stock market is a side issue.

I just like Matthew Simmons' way of dealing with this better than this guy Heinberg's.  What's the point of turning a 400,000 barrel a day decline into a 2.5 million barrel of oil decline by trying to claim (through annonymous sources, who could just as easily be misleading him anyway) that one particular oil field has had a radical collapse, while other oil fields have had equally radical increases to cover the effect of the collapse?  I don't see the point.

". . .that one particular oil field has had a radical collapse, while other oil fields have had equally radical increases to cover the effect of the collapse?  I don't see the point."

This statement should read as follows:  "That one particular field has had a radical collapse, while the production from all other Saudi oil fields has been increased to their maximum capacity to limit the total decline to about 7% so far."  

I am using the max Saudi production last year as 9.6 mbpd, and the current production as 8.9 mbpd (crude + condensate).

Ghawar is not just "one field."  When it made 5.5 mbpd it was making more than total US (crude + condensate) production.  Ghawar and Cantarell together accounted for about 10% of total world crude + condensate production.

This is the whole premise behind the Peak Oil theory.  We find the big fields first.  When the big fields roll over, trying to reverse the decline is like trying to hold back an avalanche.

I have done no original work on Ghawar/Cantarell, but I do have some understanding of oil reservoirs, and after reading some of the available information on these fields, I have been relentlessly warning that both fields were on the verge of severe production declines.

We will continue to bring new oil fields on line.  Will they offset the declines from the old large fields?  No.  The question from here is how fast can alternative sources of energy and unconventional sources of liquid transportation fuels be brought on line.  IMO, these will only serve to slow the rate of decline of total liquids production.

Let's look at the other major oil fields in SA (aside from Ghawar):

Abqaiq: production peaked in 1973 at just over 1 million barrels per day, currently produces less than 500,000 (as of 2004)

Safaniya: Production peakes in 1970, currently produces around 500,000 barrels per day with an estimated 600,000 barrels per day spare capacity (all of this is heavy crude)

Berri: production peaked in 1974 at 800,000 barrels per day, in 1994 was producing 300,000, todays estimate is around 200,000

Zuluf: very mature field, producing between 400,000 and 500,000 barrels per day

Marjan: 100,000 barrels per day

Shaybah: estimated 500,000 barrels per day

Qatif: they say 500,000 barrels per day (although Mathew Simmons states that the chances of maintaining this output are, "rather slim")

As of 2006, that's pretty much it.  SA has no other fields which produce significant amounts of oil.  So what's the total?  2, 900,000 barrels of oil per day, exluding Safaniyas estimated spare capacity.  With this spare capacity (which, of course, is all heavy crude) we get 3,500,000.  And these are the most optimisic of estimates from these VERY old oil fields, most of which peaked more than 30 years ago.

Add Ghawars 3 million barrels and SA is currently producing 6,500,000.

That's 2,400,000 short of your 8,900,000 figure.  My conclusion? Ghawar is currently producing about 5,400,000 barrels of oil per day.

Adding to that previous post, according to Mathew Simmons in Twilight, there are two more fields scheduled to come online in SA within the next 2-3 years.  

First, there is Khursaniyah, Abu Hadriyah, and Fadhili, which is scheduled to come online in 2007 and produce 500,000 barrels of oil per day.

Then, Khurais should come on line sometime in 2008-2009 and produce as much as 1.2 million barrels per day of oil.

Simmons questions these numbers more in terms of sustainability than in terms of being able to produce these amounts for a short period of time.

So, assuming a continued 800,000 barrel of oil yearly decline in SA's other mature fields, we could expect to see SA production as low as 8,700,000 by the end of this year.

Next year, they would lose another 300,000 (800,000 in declines minus the 500,000 added from new production) and be at 8,500,000.

Over the course of the following two years they would lose another 1,600,000 in declines, but add 1,200,000 from Khurais.  This would put production at 8,100,000 by the end of 2009.

So, 8,100,000 by the end of 2009.  I know this is just a rough estimate and my methods are simplistic, but sometimes simplistic methods are the best.  And I trust Simmons' data.

If we start to see numbers which are far worse than these, there will be no other explanation than a catastrophic decline at Ghawar.

"we could expect to see SA production as low as 8,700,000 by the end of this year."

Petrologistics, which was right about the April numbers, estimates that the Saudis are already below 9.0 mbpd.

And no, this wasn't an inside job.  I have yet to witness a case of insiders losing significant amounts of money in the stock market, here, in SA, or anywhere else.  As usual, it was the latecomers who got burned.

Apparently Mr. SelfAggrandizedTrader has never heard of Ted Turner. He lost half his fortune when the AOL scheme turned sour. There are literally hundreds of cases where insiders have lost their shirt in the market. But not in this case. In this case it was the insiders that got out at the top and left those on the outside to take the beating.

Can't Mr. Trader see that it was a case of those in the know (insiders) dumping their stock while prices were high, and the latecomers getting burned? He says it wasn't an inside job then tells us exactly why it was an inside job. If ever there was an oxymoron presented in one paragraph, his statement is exactly that.

With the Saudis, there is no need for insider trading. One man, Prince Al Waheed, organises all the investments of the Saudi Royals, approximately 100,000 of them. He is also a vulture capitalist taking stakes in losing brands with a chance of recovery - e.g. Apple, Eurotunnel. The then mayor of New York refused to accept his 7 figure donation after 9/11 because the accompaning press release stated that "something must be done to improve the lives of Palestinians"
Forgot to add Point #8:

At the recent PBS Peak Oil debate, the consultant from Houston--recommended by Saudi Aramco--repeatedly stated that he thought that oil exporters would be cutting back on production--to prolong the life of the fields.  

I predict that when no one is buying the "lack of market" excuse, they will say that they are cutting production voluntarily to prolong the life of the fields.

Let's look at the group of large producing regions (2 mbpd or more for about 20 years) that have peaked.  Based on the HL method, they peaked at the following percentages of Qt:

Texas:  57% (Khebab)

Lower 48:  52% (Khebab)

Russia:  50% (Khebab--peaked in the middle of a broad plateau)

North Sea:  52% (Brown)

Mexico:  50% (Kkebab)

Note that the swing producer, Texas, peaked at the highest percentage of Qt.

Saudi Arabia (the successor swing producer to Texas), in 2005, was at 58% of Qt.  

To expect to see rising production from the vicinity of 50% of Qt is to expect to see what we have never before seen.

I would again refer you to the points I made above.

FYI--There are about 130 Energy Bulletin stories, under "Ghawar."

http://www.energybulletin.net/news.php?author=&keywords=ghawar&cat=0&action=search&p ageID=1

from something Matt Simmons said
i think the saudis have a tank farm with a capacity of around 80 million barrels. 10 days worth of saudi production or something. It is very possibly they are drawing from these storage tanks.
So I guess all hell should break loose on August 15th.
Don't hold your breath.
This shows clearly that the tears to our social fabric over oil will proceed quicker than the actual effects of peak oil.  Our society is unable to withstand the strains being placed upon it and PO has only just started.  Not a good sign.  

If the US attacks Iran I'll go on strike.  We already have all the troubles we can handle, and we can't handle those.  Hopfully we will bring our army home and concentrate on dealing with PO; then the Islamics will sink back into the desert sands they came from.  Once their money is cut off they will only be able to sell dates.

On the contrary, the "Islamic" countries, along with Russia, with be among the most prosperous on earth 50 years from now.

Peak oil doesn't mean peak revenues.  Aramco will probably increase revenues every year from now through 2050.

If this news is true, the U.S. is the country in the quicksand.

If the US attacks Iran you may not have to go on strike. I would expect that the economic repurcussions would be so strong and swift that you would (and I) could be out of a job in no time.

I have often thought that the actual experience of peak will be hidden from us by political and economic events. For example, we bomb Iran, setting off a multi-year global recession. Only after a few years when we start to see signs of recovery it is limited by the inability to get energy production up to previous highs. This could cut off the recovery, dipping us into another recession. Only for the pattern to repeat several times before we realize - hey, were producing x mil bbl a day less than we used to and just can't seem to produce any more.

Can't remember who it was, but in another thread recently it was observed that, at least in the developed world, the way we'll experience peak will be through growing unemployment.

Sounds like a plan.

"Mainstream reporting seems to miss much of the context of events and, when discussing the Middle East, the geopolitical struggle for control of energy resources nearly always forms much of that context. "

Today's reporting on Bloomberg just talks about oil going down in price because of worldwide recession fears.  No mention of this information which one would think would be blockbusting news.  

What does  "blockbusting" mean, anyway?

Back in the old days, when I was your age and before Fandango had been invented, people would line up at the movie to buy tickets. If the waiting line went beyond a city block, it was a "blockbuster".
If you were may age in the olden days, you really should be dead.  
I am. The wonderful thing about this nice warm place is that we have unlimited Internet access. :-)
There's a research tool called a dictionary. Learn to use it. Time to catch up.
Really, was this a rethorical figure or did not you ever used Google?

I used google and Wikipedia. The definition I found talked about real estate agents busting up blocks of white people with minorities causing neighborhood housing  prices to go down.  

And, further, my guess is that people use the term blockbuster all the time and don't think about what it really means.

All the more reason to use a hard copy dictionary. Living online only puts you in a knowledge ghetto.
A "block buster" is also a bomb from World War Two that demolishes an entire city block. Whether the Germans or the Brits had them first is not clear, but of course Yankee ingenuity had made great progress beyond the mere blockbuster bomb by Aug. of 1945.
The word I asked about was blockbusting, not blockbuster. The definition I found didn't make any sense in the context that it is often used.
Webster as well as other authoritative dictionaries are on line.  So, what would be the point of using the hard copy?  
Do you have an OED online subscription? It's a nice thing to have but easier and usuallly better to have your own copy.
If you are not friends with OED you are missing one of life's pleasures.
Clearly consulting Google and Wiki did not answer your question. A dictionary would have. As your eye scanned the page you would have picked up both 'blockbusting' and 'blockbuster' and you might have found the connections between the separate etymologies. And having the dictionary you likely would have learned half dozen other things on the way.
OED compact is generally available in used bookstores. I consider Webster's Second equally indispensable though it is getting harder to find. Is the Second online? And if someone really did do that how did they add the smell?
American Heritage is useful for this and that and I also lean on my 1914 Oxford Shorter.
These riches do not exist for other languages. So enjoy it.
OK, that's enough of this. I can just see it now.

W addresses the Nation
Kiss Your Lifestyle Goodbye!

But, seriously

Heinberg Hears A Rumor

Be the first on your block to tell me that the Saudis can hide a loss of 2.5/mbd of production. Go ahead, make my day.

So you think its impossible?  No way existing fields could cover it?
No, production from other fields combined with inventory stockpiles could not cover it.
What, are you telling us that the Saudis don't have a billion barrel storage capacity? I mean, if they are hiding a 2.5mbpd shortfall, and have been doing so for the last year, that takes about, what, 930 million barrels of oil? I could believe that they were masking 500kbpd from their tanks in Rotterdam for three to six months, but no way could they be doing the level that Heinberg suggests for any length of time.
Further, the change in quality of the oil would have to be noticed in the market-- none of the other light sweet fields in the Land of Saud have the capability of expanding production by any sort of level comparable to what Heinberg is suggesting.
Finally, wouldn't tanker traffic bear this out? If the Saudis were pulling from Holland rather than Ghawar, the rates and available of long haul shipping would be dropping into the basement-- and that hasn't happened by far. Capacity utilization for super tankers is still at maximum.
I really don't see how anyone can still ignore the oil component of the US involvement in the Middle East. Of course, this is all further complicated by the US/Israeli connection, which serves to obscure the US fundamental goal: get control of all the oil and hold on to it.

If an identical version of the Israeli/Hezbollah conflict were playing itself out in darkest Africa, with only mere 'wogs' on both sides of the conflict, I guarantee you that the whole thing would be lucky to make a tiny column of page 6 of the national newspapers.  But because it involves Israel, the US media makes it out to be the most important thing going on in the world at this time.

I really don't understand how can so much attention and money be bestowed upon an arid, ugly little country that makes west Texas look a cozy New England town.

I think the answer is that it is a perfect example of a symbiotic relationship. The US is using Israel as an excuse to have a presence in the Middle East, while Isreal is using the huge influence of Jewish people in the US to ensure its very existence. it is actually a parasitic relationship. The flow of benefits is a one-way street.

Can anyone here claim that this is a stable situation? Israel is getting to be an albatross hanging from the neck of  America. Sooner or later this connection HAS to be broken.

As such, Israel better learn to fend for herself.

Israel better learn to fend for herself.
An Israeli F-16 will be over your house tomorrow morning.

--just kidding ;-)

I think you greatly underestimate the religious aspect of support for Israel.  Here in the very red state of Alabama most people support Israel because their bible told them to.  They are quite adamant  about it.

In fact they justify the Iraq war simply because it removed one of  Israel's enemies.

Where were all these nut jobs when the boats from Germany were being turned back prior to the holocast?

The capacity of people to screw it up via the rear view mirror will, it seems allways astound me

Where were all these nut jobs when the boats from Germany were being turned back prior to the holocast?

The rise of evangelical Christianity  as a political force in the US is a post-WWII phenomenon.

Also note:  Theirs  is a pro-Israel position more than an explicitly pro-Jewish position.  Their religious beliefs lead them to support the nation of Israel which figures very prominently in their view of the end of the world.  So, don't expect these people to take to the streets to protest anti-semitism in their own communities.   But they would indeed be gravely concerned if the US abandoned Israel.  In fact, they might suspect it was an act of national suicide.

I was raised a Christian fundamentalist.  Oh so long ago.



There was also such a movement before the American Civil War (not about Israel but more about fundamentalism).

The Millerites with their end-of-the-world thoughts were very representative of this movement. A lot of people sold their homes thinking they would not need them shortly.

Historian of science Michael Ruse's book THE EVOLUTION-CREATION STRUGGLE (Harvard, 2005) devotes a chapter ("Fundamentalism") to the early history of pre- and postmillenialism, etc. in America.

Although Ruse claims to be a Darwinist, his overall thesis in this book is, in my opinion, a bit screwy; but that's not really relevant here, except by way of making clear that I have some reservations about it. I mention the book because it is a useful (and recent) discussion of the history of U.S. fundamentalism in conflict with natural science.

There used to be quite a bit of anti-semitism here in the US. But, Israel is a biblical democracy heroically fighting religious fanatics who are not mentioned anywhere in the bible - obvious heretics.  Israel is clearly fighting our wars with our weapons, particularly when you consider that the heretics are in possession of our oil, a situation which grows more unacceptable with each passing day.
Aha! Now I understand the bitter part of your handle! We escaped from Huntsville slightly more than two years ago.

We were only there 23 years, but already we could tell that we didn't like it much. And Huntsville is in the most progessive part of the state.

To get an idea of the blind support for Israel by the evangelical Christians, go to


where a leading poll question was asked.  Frankly, even the neo-Nazi website Stormfront.org would hesitate to pose such a inflammatory poll.  

If Israel would kill every last Lebanese man, woman, and child these "born-agains" would quote chapter and verse justifing it.

Flavius Aetius


I thought you might like to see this too. How much is the "Oil issue" motivating Iran?:

(Interestingly in our little county they found a "bomb" and a bomb threat in nearby Morro Bay, in the middle of an election for local Supervisor where one of the guys running is a law-an-order type where the typical crime is purse stealing from an unlocked car in the middle of the night.)

Iran supplies Hizballah with a battery of upgraded Zelzal missiles that can reach Israel's *nuclear reactor in Dimona*

August 4, 2006, 11:09 PM (GMT+02:00)

This disclosure by DEBKA-Net-Weekly 264 was confirmed Friday, August 4, by Ali-Akbar Mohtashami-Pour, former Iranian ambassador to Damascus and Tehran's senior liaison with Hizballah. The acquisition of an improved Zelzal through Syria with a range of 350-400 km was behind Hassan Nasrallah's threat to bomb Tel Aviv if Beirut came under another Israel air attack.

Tel Aviv is 150 km north of Dimona and therefore well within range of the improved Zelzal missile.

The DEBKA-Net-Weekly report added: The battery consists of 16 missiles which, fired from northern or central Lebanon, can hit the Negev town of Beersheba which is some 34 km west of the nuclear center. Iran knows that a missile attack on the Dimona reactor, even if it is a direct hit, will not do much harm because the nuclear installations are buried deep underground and guarded by anti-missile defenses. But both Tehran and Hizballah are after the psychological impact on Islamic and world opinion of aiming the first Muslim missile against Israel's atomic center.

Earlier, Hizballah said there would be no ceasefire until the last Israeli soldier leaves Lebanon. France submitted draft UN resolution on Lebanon

"Iran knows that a missile attack on the Dimona reactor, even if it is a direct hit, will not do much harm"

The core may be buried, but how do they cool it? if it's above ground condensers then who knows, and since this is an obvous "all in" hand why not throw a few persistant nerve agent warheads in the mix? Syria has this stuff

We have admission from Iran that they supplied the missiles. If WMDs are actually used against Israel, do you think the Pentagon will stand in the way of a nuclear retaliation? They stood in the way of our first use against Iran. But if the other guy goes first, the US military will utterly destroy them. Iran will get all 75 nukes previously targeted for it. Syria would get a few as well. Neither nation would exist as a nation in the modern sense any longer.

Striking first and so blatantly is suicide unless they have some other trick up their sleeve.

And a WMD first strike by Hezbollah would allow a declaration of war by the US and the move from a peacetime to a rationed wartime economy. And the public would back it.

The detail in the reports of this are thin but if it is the "best" Zelzal that they have (with the GPS guidance) and they can be confident of putting them down in a 100 meter circle, but they only have 16 of them, then for me the question becomes what DO they intend to do with them?

If you are the Hezbollah commander, you think things are going badly, your goal is to inspire your other potential allies to rise up to your defense, oh and by the way you might think that Allah is really on your side...

What better symbolic target than the "zionist entities" WMD factory?

Functionally chemical agents would not cause mass casualties against this target other than to the plant workers, its too far out in the desert, and I think it would increase the effectivness of the attack over one just based on exposives in the warheads if tactical surprise was achived . We know Syria has the capability, we do not know if they have released it to Hezbollah or in what quantity.

But it is a card in this deck, and thus it may be played...

75 nukes to Iran? I think that would completely contaminate the whole of Middle East and Europe. That would absolutely be a blatant declaration of war against much of the world. While it is possible that people might let ONE nuke slide I still think it would be ridiculously stupid idea to test that theory. Not to mention that a nuke or a few to Iran would be Very Bad for the Israeli people too.
One nuclear wepaon detonation gives measurable contamination all over the world since it is easy to measure extremely low levels of radiation.

How far the damaging levels of radiation are spred depends on where the explosion takes place. High up in the air and the neutron radiation transmutes little material into radiactive isotopes, down on the ground and massive ammounts are transmuted into radiactive isotopes and thrown up in the air as dust.

This means that flattening airbases or troop concentrations  by high level explosions is far less damaging for the rest of the world then ground explosions to crush fortified facilities such as the uranium enrichment plants.

But this is only physical fallout, the political one would be extreme and it would be extremely bad if the taboo on using nuclear wepoans would be broken since they are physically usefull for waging war. Hundreds of aboveground nuclear test dident end the world and neither will the same ammounts used during wars. Thus you need to be MORE afraid of nuclear wepaons, not less.

When you say:

"This means that flattening airbases or troop concentrations  by high level explosions is far less damaging for the rest of the world then ground explosions to crush fortified facilities such as the uranium enrichment plants."

I wonder if you are allowing for the effects of EMP (Electromagnetic pulse) which get dramatically worse the higher that the detonation occurs.

And malfunctions do happen. As I recall the US "Starfish Prime" blast in the early 60's detonated higher than intended and was popping light bulbs and fusing car iginition systems 6-700 miles away. How would the microelectronics of the gulf region fair in such an environment? An "in the wild" test of modern civillian electronic networks and systems is, as of yet, untried...

Murphy"s Laws hold over any other, "Starfish Prime" was indeed interesting :

The weaponeers became quite worried when three satellites in low earth orbit were disabled. These man-made radiation belts eventually crippled one-third of all satellites in low orbit. Seven satellites were destroyed as radiation knocked out their solar arrays or electronics, including the first commercial communication satellite ever, Telstar.

Actually ALL of Murphy"s Laws are corollaries of Fooled by Randomness but conversely “The best planning in the world is no substitute for plain, dumb luck.”

Maybe it's just me, but increasingly, it looks as though the Middle East policy is being lifted from the 1982 series, Whoops, Apocalypse

(from the Wiki article:

"Lacrobat, an eccentric international arms smuggler and master of disguise, nicknamed The Devil, has stolen a Quark Bomb and is on his way to Iran, to help the Shah in his counter revolution. We later learn that this was part of an elaborate plan set up by The Deacon [US Presidential adviser] as the new authorities in Saudi Arabia plan on cutting off the US oil supply." )

Did you even bother to read the work of Seymour Hersh this spring and early summer as he covered the internal revolt in the Pentagon? Bush wanted to use tactical nukes to take out Iran's nuclear capability. The generals refused and leaked details to the press to raise public ire, and it did. Amongst those details was the revelation that over 400 targets had been identified that had to be destroyed to shut down the Iranian nuclear program and that 75 of them required penetrating weapons. Further, the analysts concluded that conventional penetrators could not guarantee a success so the alternative was invoked, tactical nuclear weapons (specifically B61 "bunker buster" ground penetrating warheads) to guarantee destruction. The generals flat out refused to consider this but Bush refused to take this option off the table. This disagreement is what drove the generals to leak information about the targeting and weapon selection.

But consider the other side of the coin - what if WMDs are used against a US ally first? I am completely confident in saying that the Pentagon would have almost no reservations in responding in-kind. The Pentagon just doesn't want to use nukes first. They aren't afraid to use them in what they believe is defense of our nation or our allies. They just don't want to use nukes offensively or first.

When Seymor Hersh is buried the instructions are to give him an enema immediatley after death and put the remains in a shoe box.

Look at all his bogus claims on "imminent and immediate" plans for U.S. attack on Iran . . . back around March of this year.

Why anybody continues to believe stuff from this source is a mystery to me.

In fact, exaggerated rumors about imminent war with Iran go back all the way to early 2004, if I remember correctly.  This definitely puts me into an "I'll believe it when I see it" frame of mind with regard to this issue.
When Seymor Hersh is buried the instructions are to give him an enema immediatley after death and put the remains in a shoe box.

Wow! Don, I would say that you showed some real hatred here!

I tend to believe we were preparing to attack.  Although that's not the same thing as actually attacking.  It could have simply been a game of "Chicken", of which Hersh's report was part.
GreyZone -

If indeed true, then that tells me that the Bush regime has much to gain by having a real or alleged attack by Iran on Israel.  

Is there going to be another 'false flag' or bogus episode, a Middle East version of the Tonkin Gulf attack, that will give the US the pretext it needs for attacking Iran?

With it becoming clearer by the day that Iraq is turning to shite (or perhaps more accurately, Shiite?), I'm afraid that the Bush regime is going to go for broke and make one last desperate fling at 'fixing' the Middle East.

I'm afraid of that too and here's the thing - the US generals have refused to fight offensively using nukes. That was the entire fiasco that Hersh covered this spring so effectively on the tactical nuke argument.

So Bush is stuck if he really wants war. (I don't know that he does but let's go along with that argument for a moment.) The only way he can now get the generals to go along is to get the "enemy" to use WMDs first.

Look, a long time ago as a younger man I was on active duty for nearly 9 years til they tried to make me a REMF due to medical issues. I got out instead but I am very confident in saying that most military personnel don't buy the stories of government involvement in 9/11, etc. So a false flag operation could be used to push the bulk of the officers into accepting the need to counterstrike against an enemy willing to use WMDs. And they would buy this because they simply cannot accept the idea that the US government might deliberately trick the world (and them) in such a manner. Thus if WMDs were used against US forces or a US ally (like Israel, Japan, or Great Britain) the officers would be very willing to counterstrike with WMDs.

So, again I am not saying that the conspiracy theories are correct, but if they are, yes, Bush needs a false flag operation to drive the Pentagon officers to his side of the table - ready and willing to use nukes against a perceived enemy.

However, look at the flip side of the coin. What if there is no conspiracy? What if Iran really is that dangerous? The results are the same if Iran gives Hezbollah such weapons and a green light to use them. The US response ends up exactly the same.

So the problem is that you can't point to a WMD attack against Israel and say it must be a false flag. Such an event has at least one other plausible explanation, given the anti-Israel threats made by Mahmoud  Ahmadinejad. Just the other day he said the solution to end the conflict in Lebanon was the "elimination of the Zionist regime". And that's the problem, isn't it? Ahmadinejad is either nuts or doesn't understand the west and is being used by them (or both).

What are you doing, spreading this nonsense about WMD attacks on Israel??  Don't we have enough misinformation on our web-sites and media as is??  Did you even bother reading the Energy Bulletin article at top of this thread??  

Since you brought up Ahmadinejad's comments about Israel and plans of attacks on Iran as if they are related, you really need to review the chronology.  Threats of US and/or Israeli attacks on Iran pre-date Ahmadinejad's election by at least 3-4 years.  In fact, Iran's reformist Khatami administration had approached the Americans through the Swiss back in 2003 to diffuse these same tensions with US and Israel.  Recall that even the uranium enrichment R&D was stopped during the last year of the Khatami presidency.  As you know, Bush and Sharon didn't want to have anything to do with this, calling him "just another mullah" and pushing for regime change (with "all options for doing so on the table.")  In fact, during last year's election, Bush and Condi encouraged Iranians to boycott the election saying "it doesn't matter who wins."  With the reformist vote boycotting the election, it's not surprising that the most revolutionary of the seven candidates won Iran's presidential election.

Sure, none of us likes Ahmadinejad.  But those of us who remember more than one year ago know that he is not the cause of the mess but simply one of the consequences of the Bush/Sharon Iran policy.

I was replying to someone else who raised the question of WMD attacks against Israel. And yes I read the entire article. You seem rather annoyed. Did my comments touch a nerve?
Damn right I find lies about WMDs to justify "pre-emptive" attacks annoying!  

Iraq is arguably the worst foreign policy debacle in U.S. history.  Over hundred thousand Iraqis have died, some 2,600 American dead and perhaps ten times that maimed.  

I can take ignorant remarks about "heretics," like that of the dude further up, because they are so blatantly stupid.  But I cannot stand disinformation masked as informed comment.  After Iraq, no American should.  

No one said that Hezbollah actually has such weapons. The question was phrased as a "what if" sort of question and the dialog went on from there. And if the rest of us wish to discuss such a hypothetical scenario, then we damned well can if we want and if you don't like it, you can just move along.

Further, there was no discussion of a pre-emptive attack. How you came to such a conclusion boggles the mind.

Finally, I even discussed the position of those who think that the entire "war on terror" is a staged event by the government and how another such false flag operation would be used as a prelude by the US to attacking Iran and/or Syria.

You appear to have not even read what was said, instead seeing "WMDs" in print and then your rational faculties shut down entirely, leading to a completely irrelevant emotional tirade. I suggest you learn to read and to stop allowing your emotions to control you.

"Iran knows that a missile attack on the Dimona reactor, even if it is a direct hit, will not do much harm because the nuclear installations are buried deep underground"

Posted my first comment too soon,

I don't know what the source is that DEBKA-Net-Weekly is using when they say the nuke is underground, but here is some probably degraded declassified US "Keyhole 4" sat imagary of the site from 1994 (my text additions) which corresponds with lots of open source descriptions of the site which indicate that it is very much not underground

wait a minute, Israel having nookular weapons???
A larger scale shot also from Keyhole, showing the whole Dimona complex, and a ground shot of the reactor containment:

According to Mordechai Vanunu the complex employes 2700 people. The names and functions of the major buildings are as follows according to him:

  • Machon 1 is the reactor building with its 60 foot silver dome.

  • Machon 2 is a nondescript two story windowless building 80 feet wide and 200 feet long. The above-ground structure houses an air filtration plant, some offices, storage space, and a worker's canteen. Also in the structure is the entrance to limited access elevators that transport people to the six underground levels, extending eightly feet below the surface. This hidden area houses an automated Purex plutonium separation plant, plutonium fabrication and reclamation shops, and fabrication shops for bomb components made out of lithium deuteride and beryllium. The separation plant is housed in a production hall (called "The Tunnel" that occupies the first four levels. Level 5 is the fabrication area for plutonium, lithium deuteride, and beryllium. The Tunnel normally operates one 34 week long "production campaign" each year, being closed for servicing and refurbishment the rest of the year.

  • Machon 3 is a chemical plant that produces lithium-6 deuteride and also processes natural uranium and fabricates reactor fuel rods.

  • Machon 4 is a waste treatment plant for the radioactive effluent from the plutonium extraction process in Machon 2 . This plant presumably converts the waste products for convenient disposal, and may also separate the uranium for reuse.

  • Machon 5 coats the uranium fuel rodes with aluminum.

  • Machon 6 is the physical plant for Dimona, providing power and other services.

  • Machon 8 (there is no Machon 7) contains a laboratory for testing and process development. This building houses Unit 840, which operates gas centrifuges for enriching uranium.

  • Machon 9 houses a laser isotope enrichment plant, also for enriching uranium.

  • Machon 10 produces depleted uranium metal for anti-armor ammunition use.

This was an excellent thread!

You are correct. See Darfur.
Also see congo

I think that in the West, especially in the USA, the origins of Israel as a nation are largely misunderstood. Stalin, who like most people in Eastern Europe was an anti-zionist, helped bring it about. Read this fuller explanation.

Furthermore, the USA did its utmost at the time to prevent this from happening as the USA saw the UK as its proxy in the Middle East. That is what the Special Relationship was all about.

Would it not be rather ironic when the USA withdraws it support from Israel - which will eventually happen when Peak Oil is upon us -  if Russia were to move in to support Israel in its place?

This is a bit much, but I find it more productive to address Heinberg's farfetched rantings about Israel "provoking" Hezbollah. The reason one can just about take it to the bank that Hezbollah started this, is quite obvious and almost certainly dispositive. When Israel attacked, its version of events was supported by a number of Arab countries, including Saudi Arabia, which is a strong supporter of the Palestinian cause and has bankrolled the Palestinians for decades. If even the Saudis supported Israel's version of events, that is very strong evidence in Israel's favor. If you can name ONE other military engagement in which Arab countries publicly supported Israel's version of events more power to you, because no one else can.

That being said, Israel and the United States have made a hash of things in two ways.
(1) Announcing a goal of "disarming" Hezbollah. This leaves neither room for retreat without humiliation. Israel could have talked about making Hezbollah pay... and have had the freedom to retreat at any time after deciding their point was made.
(2) It would seem that Israel could have closed Beirut's airport and other supply entry points and concentrated its fire on South Lebanon's military targets rather than pursue a strategy that has cause so many civilian casualties and damaged so much Lebanese infrastructure. In a situation when Israel was attacked and even Arab countries acknowledged this, Israel has in this way forfeited the moral high ground.
I attribute these failures to an inexperienced Israeli government that felt the need to prove its toughness in a tough neighborhood, compounded with President Bush's proven ineptitude. Until President Bush took office, the US-Israel relationship was mutually beneficial to both countries and I would argue, also to the world at large. To restore those benefits, all we need are marginally competent leaders in both countries.

Kaveh L Afrasiabi at Asia Times has written an interesting article claiming that this entire fight is about water from the Litani River. And he makes a good point - by controlling this new source of fresh water, Israel could potentially be freer to negotiate with Syria over the Golan Heights from which it currently derives a significant percentage of its fresh water.
Hello Greyzone,

I think my July 26th Foundation posting covered this:


Bob Shaw in Phx,AZ  Are Humans Smarter than Yeast?

yeah, I have to agree with that, sunlight.  This is a clash of civilizations, not a country provoking a terrorist group.  Sure, there's a bit of a chicken and egg problem here, but if I had someone kidnap my soldiers and then throw rockets in my backyard, I'd roll after them as well.

Of course, the Lebanese can now say the exact same thing.  

While I mostly agree with you, it is important to note Saudi Arabia's(Sunni/Arab) relationship with(to) Iran(Shiite/Persian) and Iran's relationship with Hezbollah.

And also Saudi's relationship with the US and Iran's relationship with the US. This is after all really a proxy war between the US and Iran as most parties are finally coming to understand.

My weekend is off to a joyous start.
Mine too. If you're going to float a rumor in print, don't you, like a responsible journalist, try to get some independent comfirmations? Try to establish the truth of what you've heard? Not damage the credibility of those of us who are concerned with oil depletion and want to be credible?

I've got lots of questions. That's not a complete list.


I think Richard's wording was entirely appropriate. Note the operative phrase, "if true."

Sorry, Matt.

That will not fly. It's like Cable TV and Comedy Central. All you have to do is ask the question as Stephen Colbert, parodying CNN etc. said. Paraphrase from memory:

Colbert: Does Jon Stewart pleasure teamsters for pocket change?

Stewart: (pause) No.

Colbert: Let's let the audience decide.

See what I mean? If true? Why did you say it if you didn't know if it was true as far as you can determine? I won't go into base motives.

Listen to Terry Gross' interview with Stephen Colbert.


This is true but assumming an insider did say this to Richard - and I don't think any of us are doubting his honesty in terms of reporting that - shouldn't he come and say somethign like "folks, this is what an insider told me at the conference."

Know what I mean?

I think that he is right to report it, but also to spell out, in greater detail, the qualifications of source.

I have a hard time seeing a 40% decline rate in some period of less than a year, combined with an acceleration fo production from other fields with rigs that have (according to Baker Hughes) only gotten there within the last six to twelve months.

Let's stop wishing for the immediate vindication that these figures would represent-- I, for one, have been boring my steadily diminishing friends for four years about this issue.

I simply do not believe that these figures are mathematically, technically, or economically possible.

(1) It's entirely possible that the decline was from about 4 mbpd to 3 mbpd (see above post).

(2) Check out the Yibal Field production graph.

I am still skeptical about Ghawar being at 4mbpd. But lets assume you are right. I can easily believe a drop from 5.3 to 4.6. A drop to 4.0 is harder to swallow, and to 3.0 makes me really scratch my head.

If Ghawar is undergoing an Yibal-type collapse, then production by end of 2008 will be down to aobut 2mbpd. This would truly be a disaster, as Cantarell and Daqing  would be down a combined 1.5mbpd as well, by then. So, we have lost 3.5mbpd total from three established fields.
If losing 1.5mbpd raised oil from $55 to $70/bbl last hurricane season, what will happen when supplies drop by  more than twice that?

If Heinberg is right, and if the Saudis have been keeping "production" steady by draining their Dutch storage tanks, then things are very, very bad, unless your last name begins with "P" and ends with "utin."

But, I still want some more empirical verification. Give me tanker traffic figures, changes in refining costs for Sauid customers, or maybe some loss or change in the amount of refining gains from thos customers to account for it-- because the Sauds do not have any other source that can give us that great low viscosity stuff that comes only from Ghawar and Abqaiq. I would like to see one announcement from one refiner that their margins are dropping because of the type of oil they are getting.

The TOD "Powers That Be" would never let you have that information.  Why?  Because it would undermine this entire thread.


snicker  now that's funny.
TOD as part of the global oil price conspiracy.
that's us baby! and don't forget hoarders of information too!
Got twenty-three cubic feet of condensed information in my freezer, heh, heh, heh. And backup power. And big thick dictionaries. And lots and lots of reference books. Heh, heh, heh. . . . GLOATING, chuckles the info miser.
Man, you guys are having a field day with that one.

Of course, if the information in question were available, it would be obvious to all of us that the whole, "Ghawar is producing under 3 million barrels a day" thing is completely bogus.

How long do you guys typically keep a sharade like this up before reverting back to the real numbers?

I still don't see the point of this whole exercise.

"If Heinberg is right, and if the Saudis have been keeping "production" steady by draining their Dutch storage tanks, then things are very, very bad.."

One minor point, Dr. H. stated that the Saudis have been keeping production up (or more accurately limiting the decline to about 7% so far) by producing the other fields at their maximum rate.  I suggested that the Saudis could also be drawing down their inventories.

Entirely appropriate, indeed.

By the way--if true, the rumor that Heinberg is an alien from Alpha Centauri sent here to help destroy our civilization prior to the arrival of an invasion force, would be devastating to his writing career.

Hey--this is fun!

So we don't sell our house on the first report that Heinberg is an alien.  We note the story, and wait for what happens next.  If it builds in the MSM, and the President says in some future SOTU "we are addicted to alien pundits" ... well, then maybe we worry.
Dave: Thank you very much for taking a hard line on such issues.  I worked for a number of years as a journalist in the technical writing field, and the sloppy practices in the energy awareness community drive me absolutely nuts.

I'm particularly upset by something you mentioned--how poor practices enable outsiders to slime us all as a bunch of lunatics.  

I think we need to draw a hard line between what is fact and what is speculation, and in the case of a blockbuster like this Ghawar rumor, don't even mention it unless we have very strong evidence.  

The "if true" gambit, in particular, really gets my hackles up because it so effectively leads people to unsupported conclusions.

We all can't be scientists, but we sure as hell can act like we are.

Dave, Lou, others, have hit on exactly why I posted the open thread for this piece. We have to have more on this, but there's no doubt this conjecture will be flowing through the community, we might as well take it on now. If this is true, we need to know about it. If this is not true, we need to debunk it.
Mea culpa. You're right: I really shouldn't quote anonymous sources, which I did twice in this article. It was prepared rather quickly, and in the latter case (re:Ghawar) there was very strong temptation because of the quality of the source.  I would find independent substantiation for the comment if I could, but that would be extremely difficult if not impossible given the Saudis'level of secrecy. I've learned something from this; just doing the best I can.
Richard Heinberg
Prof. H, I think there's nothing wrong with citing anonymous sources, especially in this scenario (Saudi secrecy, etc., etc). However, I think we've all learned from this exercise that we just have to caveat to death that we're doing it, which, of course, lessens the power of the claim...which no human being ever likes to do when they think they have a killer app. :) I mean, as I said above, if this IS right...well, we need to know it. And it's still very worthy of discussion either way. Hey, that's why we have TOD, it's what we do here. You have an argument and you bring your evidence. It gets debunked and torn apart, and perhaps made stronger in doing so. Thanks for what you've done and what you're doing...
Yesterday Seismobob posted this interesting bit with accompanying website (for some reason it seemed to go largely ignored):

seismobob on Thursday August 03, 2006 at 7:16 AM EST Comments top
Unlike many fields, from the information I have, it is unlikely that Ghawar will ever have any secondary recovery.  For several years I was in charge of reservoir simulation (which, since I am a geophysicist, made the reservoir engineers wonder what went wrong with the universe). Anyway, I went to many seminars on reservoir simulation.  I made a habit of talking to any reservoir engineer who had worked Ghawar.  One guy told me that they had drilled a well in an area that the water flood water front had passed.  He said they were getting 85% recovery, leaving almost nothing to go after in the future. (this is fantastic recovery, but it is a carbonate afterall)  Given the reservoir model published by the Sauds at the SEG convention in 2004 (seen at the bottom of http://home.entouch.net/dmd/ghawar.htm ), one can see that Ghawar actually has a limited future.

woops, meant to include this quote from the website:

"One of the things to keep in mind as you look at the model below is that the original oil column was 1300 feet thick.  Today, the green layer is less than 150 feet thick.  One must draw the necessary conclusions that most of the oil has been removed from Ghawar."


Interview With Matt Simmons

Jun 6, 2005


SPK: You talk about the watering and what not but it is kind of an aside, do you anticipate something like the rapid decline in production at the Yibal field in Oman happening in Saudi Arabia?

MRS: Yup. That's the reason I've basically used the Yibal field as a case study. It's one of the most sensitive areas where I have gotten the most knee-jerk response. I've been told numerous times by Senior Petroleum Ministry and Aramco people, "Matt the Yibal field is nothing like our carbonate reservoirs." And I said, " I know its not, it's exactly like the reservoir you would have in China."

I'm not using it for the reservoir, I'm using it because it was the first giant field in the Middle East to import the technical tools that you think are destructive technologies and will allow you to produce for another 50 years and so do the technical best people at Shell.

The best technical people at Shell were so enamored with the use of these technical tools that they convinced the Oman government with a field of 250,000 barrels to ramp it up another 30% for ten years. That was in 1997. Just as they were starting the field went into collapse and by 2003 was producing 30,000-40,000 barrels a day.

That's the scary thing in my opinion. It's not the proven reserve controversy. That is a different issue. But the scary thing is that we should basically presume and then be surprised if they ever opened up the data I believe that all five of these great fields that are still close to 90% of production are headed towards collapse.

SPK: How well do you think Saudi Arabia could fake a massive decline rate? How long do you think they could keep something like that under wraps?

MRS: Until the production collapsed. What's ironic is that three years ago today I had no earthly idea I was going to write a book. But I read 15 to 20 technical papers as of this time two years ago and I said to myself, "Gosh, this is troubling." They are encountering a lot more problems than I ever would have imagined. I don't think there is any reason in the world to think that anybody would be any more concerned about Saudi Arabia than the gasps I got two years ago when I started saying, "you know what, I'm actually starting to think Saudi Arabia is an illusion."

I can't tell you the gasps I got from people, "you know Matt, I know you kind of picked the gas problems, natural gas here in the US, but you're going over the top. Saudi Arabia? Gimme a break!"

SPK: People these days don't like a Canary in the coalmine!

MRS: Well, you know it's amazing how the human mind works. Here's an example: somebody basically said the USSR is the only super-power that is as big as the US and by the hundredth repetition every single person in the world believes it and then the wall comes down. And people say, "oh my gosh, it's a third world country."

This is the same sort of a deal.

SPK: Do you think that Saudi Arabia can drill their way out of the current decline rate? Exploration?

MRS: Nope. Part of the issue is, I want to go back to the Ghawar field. The top 20% of Ghawar which is referred to as North Ghawar is basically where this very, very high permeability within the Arab B Zone 2B resides. Within the Arab B Zone 2B there is unbelievable permeability.

When you get outside North Ghawar you have the bottom 80% of the field that will basically produce 300,000 barrels a day for 30 years. That's the bottom 47 miles of Ghawar. And the top 30 miles were basically 4.5 million barrels a day.

If you could take the rig counts in Saudi Arabia from 45 to 50 up to 2,000 over a decade they could basically sustain their current production. What you have to do is take every rig in the world to Saudi Arabia. They are going to have one hell of a time going to 100 rigs by the end of 2006, which is their announced plan.

SPK: How large are the Saudi tank farms in country and internationally, like the ones in the Caribbean?

MRS: Somewhere between 50 and 70 million barrels of domestic tank farms and they have about 10-15 million barrels of Atlantic basin tanks farms that is broken out between some storage they rent in Rotterdam but the majority is in the Caribbean. The only times there is clear evidence of a Saudi surge was during the Iraq war where it jumped by about 800,000 barrels a day for about 45 days. I bet you they were just emptying the tanks farms.


Remember that anonymous sources have been responsible for many crucial stories from Watergate to the exposure of small town political scandals.

It is in fact a shame that so many people refuse to report important information from anonymous, credible sources in order to protect the status quo. Nevertheless, it is crucial to obtain a second source where possible, and if not possible, it is important to clearly note that this report is uncomfirmed, though the source is credible.

I too have heard the rumors from Saudis I have spoken with who, while not in the same league as your source I'm sure, have expressed concerns about production levels and who are in a position to possibly know. Because their information is third hand, I cannot take this as gospel, and neither would anyone here.

I commend you on your reporting. While we want to know the absolute undeniable truth, we must realize that should we wait for absolute confirmation we will find ourselves out of time. We know the physics, we know we have to act. The only real question is should we wait until we lack the resources to powerdown efficiently, yet are absolutely certain of our standing, or should we go ahead and do what we know must be done without knowing our absolute standing. I am for immediate powerdown. I do not need to know that Ghawar is collapsing now, last year, or next year to know that it will inevitably collapse. Anyone who urges that we stay the course until we do know is essentially dooming the planet to severe shocks for which we will be unprepared.

Keep up the good work.

Who is "we". Do the "WEs" include those "in charge". Well, for starters, Bush didn't know that there were two sects of muslims in Iraq just prior to the war.  So, somehow, I think he might as missed some of the discussion about powerdown and its implications. We know that powerdown is not in either his or the smarter Cheney's vocabulary.

No politician is going to be campaigning on a platform of cutting back on our ravenous consumption level. Elections are now; the future be damned.


Remember that anonymous sources have been responsible for many crucial stories from Watergate to the exposure of small town political scandals''.

This is completely correct, and I cannot understand why there is this hang-up about anonimity. Anybody caught talking out of school in a Western Oil Co would probably be escorted to the front door. In KSA , Where such data is state secret, the penalty for talking out of school could be a lot, lot worse.

I know a couple of people working in the KSA. Not high up, just working stiffs like me. I met up with them for a beer a couple of Christmases ago and they were VERY worried about the fields even then. And no. No names or pack drill.

Ultimately it is all guess work unless the KSA releases data that can be analysed. But the proof of the pudding will be in the eating, and we may see the proof in the next two years or so. If KSA is pulsing oil onto the market from tank farms, then this cannot last.

I have a question. Bear with me for a moment while I get there, please. Let's assume for a moment that Ghawar(sp?) is crashing or declining, or is about to. This would explain a lot of things: Saudi oil production falling inexplicably despite high demand and the ludicrous claim that there is no demand. (Global oil demand is rising at something like a million barrels per day, on average, if my memory serves me.) It would explain the increasing Saudi rhetoric and the escalating shrillness of it. It would explain why they have rented every drilling rig they can find. Obviously, the goal would be to cover up the decline until they could find a deposit(s) big enough for them to say "Ghawar is declining BUT..."

My question is, how long could they hide the decline before it leaked out? At maximum production rates on the other wells and drawing from their reserves, how long would it take for the decline to become obvious to the outside world? (At which point they would probably invent an 'equipment accident' to explain it, but still.)

Thanks in advance.

Excellent questions.  I hope someone here has answers (I don't).

Surely they could mask the decline for a while, using the techniques you mentioned.  And given how secretive the Saudis are, and how much they can count on the Bush admin. to keep their piehole shut, we can assume that there's little chance of a leak.

Do we even know the size of their above-ground reserves?

Might be a good set of questions to forward to Simmons.  Someone fire up the Matt Signal.


If you're following the rapidly deteriorating conditions in the Middle East, it is very possible there will be a major war soon, and its effects might easily cover up Saudi's depletion rates.

When I saw 200,000 Iraqis today in Baghdad screaming Death to America, Death to Israel, I just cringed.

Both sides seem to want this war, and peak oil might be the least of our worries pretty soon.

Anyway, that's another way depletion could be masked.

What a mess you've gotten us in, Ollie.

Seriously, though, does the Israeli/Hezbollah/Lebanon war make it more likely or less likely that we will put out of Iraq?  Shorter Billmon.  Those (mostly Democrats) who want to get out of Iraq also support Israel to the hilt. Won't support for Israel make it less likely we will get out of Iraq since Iran may take over Iraq, thus creating a more dangerous situation for Israel?  

Where did you get the idea the USA is pulling out of Iraq?
I didn't say we were getting out. I was talking about probabilities and support for same.  It seems now that it is more likely we are stuck, even with a new democratic President and/or congress.  
If we can confirm a mass exodus of Saudi royal family outta SA I would say Ghawar collapse is confirmed.  The Saudi 20-30 somethings would be hella mad when they find out that the royals squandered the gushers leaving them with the stripper wells.
I don't get all the rhetoric on this thread about the Saudi royal family fleeing SA, or the, "islamics sinking back into the sands," or, "only being able to sell dates," if Ghawar peaks.  

I'm VERY optimistic about the economic future of countries like Saudi Arabia, UAE, Kuwait, ESPECIALLY if oil peaks.

Honestly, I think these will probably be the three most prosperous places on earth on a per capita basis within a pretty short time.  This oil bull market has a long way to run, even if it may be a bumpy road up.  

These three countries are poised to become industrial hubs, as well as energy, petrochemical, travel and tourism, and shipping hubs very soon.  

If oil peaks, industry will boom in places like SA, Iran, and Russia as they reap greatly increased oil revenues and profit from their natural gas reserves.  The U.S. didn't become the industrial power that it was ten years ago because we have a superior culture, it was because we were the big energy power.  The same will be true of SA and Russia in the future.  And of course, activities like banking and insurance will also move to the ME and Russia.  These activities have always been centered, "where the money is."  After all, all it takes to have a big insurance industry or a big banking industry is a lot of money.

I imagine a world fifty years from now where economic activity has shifted so that is largely centered in Asia and the ME, with Russia, Iran, Iraq, UAE, SA, Kuwait, supplying the energy, as well as being huge tourism, shipping, insurance, banking, and services providers, while Asia will continue to do what it does best in the areas of manufacturing, high tech, etc.

It's the U.S. and Europe, due to their trade deficits, govt. budget deficits, debt laden populations (esp. U.S.) and energy shortfalls, who would quickly find themselves marginalized.

Peak oil, even if centered on SA and Ghawar, should send people running into the Middle East, not out of it.

Also, some people seem to have serious misconceptions about the nature of stock markets in the ME.  They're pretty much like the stock markets here.  There are small groups who hold enormous amounts of wealth, but the general population also plays a major role, as well as foreign investors.  The recent pullback in the Saudi stock market had as much to do with foreigners pulling their money out of SA (and the rest of the world's emerging markets) as it did with Saudi princes.  The main difference between the SA stock market and ours is that the SA market is more energy-centered.  This is the reason that the SA stock market, more than any other, would benefit from peak oil.  For every $10 increase in the price of oil Russia's economic growth jumps about 2%.  Something similar is true in SA, Kuwait, UAE, etc.  Today SA produces 9 million barrels of oil a day and oil is at $75.  Where do you think oil would be if SA only produced 5 million?  For SA's oil revenue to remain constant, it would have to be near $130.  I think it would be far higher than that and Aramco would be raking in record profits.  In a peak oil world, Russia and Saudi Arabia could even come to be considered "safe havens" with wealthy Americans and Europeans tripping over themselves to get their money invested over there.  This would amplify the wealth effect.  Overall, far from "sinking back into the sands," the future of the "islamics" is very bright.


If oil peaks, industry will boom in places like SA, Iran, and Russia as they reap greatly increased oil revenues and profit from their natural gas reserves.
Overall, far from "sinking back into the sands," the future of the "islamics" is very bright.

A typical "economist" view, Eh?
You are just overlooking a "little" detail:
The OVERALL performance of the WHOLE economy will SHRINK!

The "very bright" future of the islamics or whoever else get hold of the last oil drops will only allow them to survive a LITTLE LONGER than the general population.
Especially because the purveyors of FOOD and TECHNOLOGY being starved of energy, not only will have their productivity severely impaired but will FIGHT LIKE MAD to maintain or recover their advantage.

Don't we see a few omens of this already?
Which gives...

Funny that Heinberg claims that Ahmadinejad is not all that popular in Iran. This is a gross distortion from what is reported elsewher. In fact in the run off election he had 60% of the vote.

A year on, Ahmadinejad's popularity is soaring...

and Saddam used to win at about a 99.98% margin too. what's your point? :) All I am saying is, don't use election results to point to the popularity of a leader. Whether it's the former USSR (they had elections), Cuba (they have elections, for elections to be valid they have to be an articulation of the mass public will...and there's really no way of knowing. One of my greatest concerns is that we are approaching a time of illegitimacy with regard to elections in the most solid of democracies...
funny, i thought we were already there (if true, of course)
ah, no one's in the streets yet.  when I see people out with signs and sandwich boards on a daily basis, that's when I'll know we're in the death spiral.

One more close election with a lot of irregularities (proven or alleged)  with the amount of distrust we have in this nation...oof.  

This makes me think of the Mitch Hedberg line--"I'm against picketing; I just don't know how to show it."
Gotta love Mitch, "The depressing thing about tennis is that no matter how much you play, you'll never be as good as a wall. I played a wall once, they're fucking relentless"
I've found that walls have a lot of trouble getting back to cover the lob.

"approaching a time . . ."  Surely you jest? That time is here and now. I submit the following as evidence:

Exhibit A, Governor of the world's sixth largest economy (California) at his last job:


Exhibit B, him at his job before that one:


Need I say more?

(yes, this really is the man in charge of the sixth biggest economy in the world!)

Obviously it's the end times.  Got that apocolyp-::ahem:: multicultural ecocommune ready to go yet?
see above.  we're not there yet.  Sure there's half the country that's pissed off, but that half isn't marching in the streets, getting violent yet...and they're not getting violent about electoral injustice either way...not yet.

Schwarzenegger won his election fair and square, btw.  I'm talking about the legitimacy of the electoral institution, not the person who got elected.  Democracies make bad decisions sometimes, the Founders hoped that federalism/diversification of interest would save us.  


Fair and square? AGain, you've got to be kidding. You know about the lawsuit where enron was going to have to pony up 9 billion to California? How the "recall" got underway after Cruz Bustamante filed the suit and then once Arnold was in he dropped it like it was hot?

dude, when Arnold Schwarzengger through "hook and crook" or "fair and square" is the governor of the sixth biggest economy in the world, the system is completely BROKEN. It's either broken because of fraud, because certain interets (the saudi royal family, as an example) own so much of the media and industry that people vote for horrible persons because they don't know better, etc.

what if the only reason people havent gotten violent is because they're (we're) all on the net chit-chatting? I suspect TPTB love the net cause people get pissed and where as 30 years ago they might have rioted now they react by "Oh geezus! I've got to post this to my blog!!! That'll show those evildoers!"

and don't get me wrong, I'm sure as hell don't have the wuevos to do anything other than blog either. Besides I'm saving up for my off-the-grid doomer retreat and the last thing I want to to is f--k that up.
ummm...you mean "huevos" don't you?
because certain interets (the saudi royal family, as an example) own so much of the media

Damn, just who does own the media? First it was our Jewish brothers and now it's our Saudi brothers. Hard to keep all these facts straight :)

you know that is exactly what ocurred to me after posting that. However there is a difference between somebody saying the following:

  1. "the saudi royal family is heavily invested in the markets" (which means they indirectly influence the media via the advertising purchased by the companies/industries they're invested in.)

  2. "the jews own the media"

  3. "the muslims own the media"

See what I mean?
No. They are watching television or shopping at the mall or stuck in traffic. But I agree that blogging is a release. But has it replaced sex?

Some say that the source of anger for young muslim mean is the lack of sex. So they take to the streets or blow things or themselves up. Maybe they should learn to blog.

Does anyone here think that perhaps what we are doing is a complete waste of time?  My wife certainly does.

Yep. It would be sad if it wasn't so comical.
Whats so impresive about getting 60% of the vote? A large segment of the electorate boycatted the election because the mullahs removed the candidates they didn't approve of. Would you have been impressed if Bush got 60% of the vote while most of the democrats boycotted the election because Pat Robertson and his crew were able to remove whoever the didn't like?
Sometimes I wonder if the U.S. even needs to attack Iran by this point.  Just by threatening war we've managed to get about 200 billion dollars (yes, 200 billion dollars) of FDI in Iran canceled or delayed, which I think was the reason for the war in the first place.  The U.S. will never just sit back and allow Indian, Chinese, European, and Japanese companies to make these massive investments (and massive profits) in Iran, which by the way, has a relatively open oil industry as far as foreign investment is concerned, while we sit on the sidelines because of sanctions.  Note that the fact that the U.S. has been so successful in getting these contracts canceled, some of which would have increased Iran's oil production substantially, is very bullish for the price of oil over the next two or three years.  Iran could have contributed substantially, with proper investment, to alleviating the coming oil shortage.  Now that we're threatening war, and I guess the U.S. won't be fully satisified until those contracts have not only been canceled, but also given to American companies (so maybe war is still necessary) Iran will continue to see falling production, rather than increasing it.
I just saw "Who Killed the Electric Car?"and it occurred to me that I have rarely come across an auto engineer talking about these alternatives.  This technology is recent, 2003 and I knew nothing about it and that bothers me as much as the wars and doom saying about oil.
electric cars are not new.
they have been around since day one and guess what they still perform about the same distance wise.
even though modern ones go from 0-60 faster.
  prof goose,
   Should their be "irregularities" in the election comeing,we may have enough very unhappy citizens to see your death spiral too close and personal for my likeing.The netroots for example are about to take a sitting incumbent senator in conn and put his bloody scalp on their belt.The winds of political change are starting to blow...peak is part of the general awareness now
yes, but I have to say, in my opinion it's the worst thing that the D netroots could do, because they're just pulling the D party to the left at the time when they could be capitalizing on the center.  They should be nationalizing this election, and they're not.  

On principle, the Lieberman thing is wonderful.  With regard to political pragmatism, it's one of the worst things the Dems could do.

Prof, are you saying the party of Thomas Jefferson should never elect candidates who represents Jefferson's views? I don't think Jefferson thought much of big, militant, authoritarian governments.

He would instead be appalled and probably call for a revolution.

Do you americans realize that you have blood in your hands. You know killed 3 million people in Vietnam, 3 milllion vietnamese people. You know what is that? Indeed a holocaust. And you didnt even pay for the material damage, you destroid a whole country. There should a war crimes trial for this. I ask how many Iraqis have you already killed? Do you even bother to caunt them? How many massacres of civillian, like the one in Haditha, was'nt covered up? How many Iraqis did you torture? How many forbidden weapons like chemical weapons, napalm, etc, did you use on Iraqi people? I'm only talking about Iraq but I could talk about many oyher midle eastern countrys you massacred, like your plot to support the overtrow of the democraticly elected iranian government by the dictator Shah, your support for Israel's Lebanon invasion in 1982, and many others. Do you percive arab people as human beings? No you don't. See that is the real issue Richard Heinberg missed. He is right about your side, your Bush gang will never accomplish to rule the midle east. But it does such a great work in expanding arab and islamic people's hate, that put you in a very weak position to receive their oil in a oil scarce world. Midle easterns's problem is not islamic fundamentalism, midles easterns's problem is you and your horrific war against them. You are not satisfied in buying their oil, so you got to steal it by force. Islam is only a natural reaction to the opression of their people by you're tanks and bombs. The real terrorist organization is the USA's government and its military monster Israel (wich wouldn't survive a day without american weapons for free). Let's be clear about one thing, after your economical colapse, nobody in the world will miss your empire, nobody except your dictators and puppets arround the world.
It looks like you are a bit upset.

Will it really matter WHO screwed up is there is a global collapse?

Islam is only a natural reaction to the opression of their people by you're tanks and bombs.

Starting in the 7th century?
Quite prescient!

Have a look at Islam commoners opinions, plus of course a lot of good ol'fascists and nazis of ours.
With whom do you side?

Very well said. The collective hubris of "western civilization" is breathtaking, as it assumes no fault whatsoever for committing genocide against any country -- especially when its inhabitants are of color. Death on a massive scale in far-off lands has no impact whatsoever on the American political or social scene. It is only when "our" soldiers start dying that the complaints and discontent start to rise. Yet most Americans will staunchly deny being racist (for lack of a better word), though their inherent bias is blatantly obvious to the majority of the world.

I have often wondered how long this state of affairs will continue to exist. How long can western powers continue to deprive the rest of the world so that its people can live in luxury?

Recent history indicates that the pendulum might be swinging the other way, with so-called "leftist" governments being popularity elected one by one in South America. Ordinary Mexicans have turned out in record numbers to support the claims of Lopez Obrador that the recent election was stolen.

Time will tell how all of this shakes out, but as long as the strength of armaments remains in western hands, these massacres will continue to happen. With the advent of Peak Oil, things may change but who can tell in what direction?


But you will win no friends here for such a statement.

Just call the USMC for what it is, the Waffen SS or the Dirlwanger Battallion and see what happens...


On another point:

Has it occurred to anybody that this time around, the IDF is not its usual self?

I mean 21 days to get from the border to the Litani?

Come on!

That's the same distance from this keypad to Aberdeen Railway station.

Compare this campaign with the Yom Kippur: a complete turnaround from facing destruction, to armoured columns on the west bank of the suez canal in 21 days...

Looks to me like the Arab nations will be watching this and think, ''Hmmm...well...maybe the IDF is not all that it is cracked up to be...''.

Still, America gets what America wants and right now some very weird people are in charge and they want Armageddon and the Rapture.

Bring back Bill Clinton. All he wanted to do was get his dick sucked. And he ran a surplus.

The IDF is holding back, that is why they are moving slow.  If they wanted to they could rubble every building and salt the fields. You know crush their enemies lamenting women etc.
Weird. Looks like I am not the only one who thinks the IDF is stumbling...

`'The natural tendency of the human mind is to equate the protagonists in a fight. In the subconscious of world opinion, then, the Hezbollah is acquiring coequal status with Israel. Current reality too has added to the perception. Once upon a time, Israel finished off three whole countries and doubled the territory under its control, all in less time than God took to create the universe. Today it cannot advance more than two miles along a narrow front, against an entity that is not even a regular army (maybe for that very reason).''


As for ''holding back'': I dont think 1 million refugees, and a completely flattened infrastructure is holding back.

The IDF have screwed up. That's what happens when you take your lead from US Military ''strategists'' and Intel.


Still, it's worth remembering that if Israel REALLY wanted to, the IDF could turn all of Lebanon into a parking lot, and Hezbollah couldn't do a thing about it.
And Iran could shut down the Straights of Hormuz and Americans would pay more to get to work than they get paid per day.

Then where would we all be?

Hey ho.

Time to get the French involved. Some real experts for a change. You know, venal cynical, believers in real-politik.

You know, People who put God back in his box 300 years ago.

Not like the current regime of God-bothering, starry eyed, Child-men you have in the US right now.

"Time to get the French involved. Some real experts for a change. You know, venal cynical, believers in real-politik."

Experts at retreat and surrender?

"And Iran could shut down the Straights of Hormuz and Americans would pay more to get to work than they get paid per day."

Qualify that.....we can completely disable their military in 3 days with air power alone.  They would still hold the territory but all weapons capable of touching the straits are easy to hit.

Such as mines?
There you go again. Wanting to disable things with air power. Well I suppose that If you are a hammer, all problems look like nails.

BTW: ''Air power alone'' does not appear to be working that well in Southern Lebanon

Imperial hubris I suppose.

''Qualify that''.

Piece o Piss:

Three sunken super tankers would do it. No tanker captain would then get insurance to move his load. No tankers would then move. The markets would panic. The oil price would ramp. Stock markets would crash.

I admire your unconditional faith in your own military prowess.  Lets be honest. You guys have made such a wonderful job of Iraq, I am surprised oppressed people all over the planet have not clamoured for your help.

Its not about big boys toys anymore. Its about assymetrical warfare. An RPG here, a shaped charge there, three suicidal men in a fast boat willing to sink a tanker here or there.

As for the French, they are experts at life and living.
They may bring at least some style and panache and real world politics to the table. Unlike your grinning, semi-literate monkey-president and your angry-hog vice president.

And as for retreating, what about Vietnam?

(oh shit! now he's gone and done it. He has mentioned the V-word).

Naah, we are witnessing the erosion of US credibility and authority throughout the world (more is the pity). Iraq has shown you up for the impotent giant that you have now become.

You cannot control much at all with your immense fire power. This is more apparent each and every day.

Frankly, you are becoming a laughing stock.

Have you ever thought of a new and novel strategy ?

You know , like this:

  1. Stay at home. (and that means your incompetent, telly-tubby USMC)
  2. Put US taxes on an equitable basis
  3. Dramatically improve CAFE Standards
  4. Treat the rest of the world's people as er, people rather than consumers or economic units or racially inferior slave-workers.
  5. Stop force feeding your way of life on everybody.
  6. Work out how bridge the technology gap between an oil present and a post peak oil future.

I am sure we would all welcome you back to the community of civilised nations.

Go on, you know you really want to.


You don't seem to want to accept the fact you're dealing with an expert in guerrilla warfare, with a man who's the best, with guns, with knives, with his bare hands. A man who's been trained to ignore pain, ignore weather, to live off the land, to eat things that would make a billy goat puke. In Vietnam his job was to dispose of enemy personnel. To kill! Period! Win by attrition. Well Rambo was the best.
Dammit CEO,
You've given away our secret weapon!
Nothing is over! Nothing! You just don't turn it off! It wasn't my war! You asked me, I didn't ask you! And I did what I had to do to win! But somebody wouldn't let us win! And I come back to the world and I see all those maggots at the airport, protesting me, spitting. Calling me baby killer and all kinds of vile crap! Who are they to protest me? Who are they? Unless they've been me and been there and know what the hell they're yelling about!
Und now vee half to unleash the secret Calli-fornia reserve forces as well. Look what you made us do CEO. Control yourself. This is the last hope for the free world. Let us pray. Let us relish in old DVD's and ancient dreams. God speed.
Alright, I'll stop. At least until Mudlogger starts posting his nonsense again. Cheers.
Well done. Sheer genius. Please share your techiques. This seems pretty powerful, but I am not sure you can hold all of the idiocy off by yourself.
Ha Ha!

And to think he skipped Vietnam and his veep ''had other things to do back then''.

Why is it those who have never crouched in a foxhole are most enamored to war?

Declaring War - Rule number 1) You want a war? - then sign your kid up first.

Could also apply to Tony Blair. The Granny of a recently killed British Soldier has said as much. Blair has two Military - age boys right now.

It is the least that Tony could do.

BTW: ''Air power alone'' does not appear to be working that well in Southern Lebanon

In lebanon the mission is to route out individuals with small arms and portable surface to surface nonguided missiles in an urban environment.

In Iran the mission would be to establish a no fly zone on their coast and destroy any vehicle approachin the beach/boat entering the water.  This is substantially different situation.  One carrier group could do it.  Mines? easily located by radar.  An RPG would not pierce the skin of a tanker.  A shape charge (like with the USS Cole) on a fast boat would, but if your requirement is three supertankers I'll only concede they could get one. After that we would move our fleet and dominate the straits and surrounding airspace.  This is like me saying I could beat up three four-year olds.  It does not matter if one of them has a club.

What about Vietnam? French pulled out first and we have a different Military many years have passed.  I think we could defend the Iranian Straits much better than occupy Iraq.

CEO....I laughed my ass off thanks.

I hope the USN have learnt a lot from hiering a Swedish diesel and air independant stirling submarine with crew to train against and now know how to nail the less advance Iranian submarines.

You must dominate both air, sea surface and the undersea volume to defend the commercial freight.

Mines are a very tricky threath and the obvious technology trend is a fusion if the passive mine and the active torpedo. Such minefields slowly swimming around at different depths and resting on the bottom while being able to listen to commands and make short dashes will be a nightmare worse then mass production of floating mines that only have preprogrammed depth and fiering requirements. Iran is surely capable of the later but probably not of the former. Such torpedo-mines is what the Swedish navy wouldn have recieved about now if the cold war still had been ongoing and we still had lived with a Soviet invasion threath.

My point is to not underestimate any war before entering it and if you fight please win fast so that we dont get a wound in the global economy that bleeds for decades wich also means a lot more human suffering. Human suffering by those who are held down and killed by bombardment and those on both sides whos possible economical well being goes to feeding the war with materiel. We do not need another Israel vs multi-generation-getting-even, when the same resources could have built a paradise for both sides.

Btw, its probably only a question of time before such small missiles are guided. The required technology is basically the same accelerometers, gyros and computers that are mass produced to make cars safer or a fairly cheap Segway possible.

One Tanker would be quite enough for the NYMEX.

Doesnt matter whether it is mines, suicide bombers or silkworm missiles.

The Straights of Hormuz are the choke-point.

What sane tanker captain would then ride his floating bomb through that narrow , kinked channel?

What sane insurance company would underwrite such a tanker?

Naah, you voted in a bunch of crazies, military adventurers, all gleefully waiting for the rapturgasm.

They told you that Saddam was linked to Al Quaeda - and you believed. (your monkey-president did not even know there was more than one kind of Muslim. Thats like saying ''What? the French have more than one kind of cheese?'').

They told you that Saddam had WMD (weather ballons...)- and you believed.

They told you it was about regime change and bringing ''democracy'' to the middle east.
-and you believed.

Now they are telling you that the Iranian President ''Im a Dinner Jacket'' is getting Nukes ''soon''

What's it like to be that badly had? - Never give a sucker an even break...especially if he can be made to spill his own blood for the tax rebated rich elite.


In the tanker war of the 1980s, insurnace companies charged a $5 per barrel premium for the Gulf.  I suppose, relatively in today's terms, they would charge at least triple that amount.

However I am inclined to belive that the tanker traffic would come to a complete halt anyway, insurance or not, once any hostilities between Iran and the US started.

Of course, we are presuming that Iran or its allies within SA would not take down Abqaiq or other major oil refinery choke points.  If they did, the Straight of Hormuz would no longer seem an important concern.

There you go, sounds like a man who knows there are more than nine thousand ways to skin a cat.

Short summary for Oilrig medic and OilCEO:

  1. Iranians are clever people. In fact people are clever and adaptive
  2. Focussed attacks with a spear can bring down an elephant
  3. America thinks that firepower against ''inferiors'' always works.
  4. ''Varus! - where are my legions?''...
Occupation is ALWAYS difficult due to hometown advantage.  Yes you can bring down an elephant with a spear but not if the elephant is a horizan away.  There is no question of US Naval or Air power.  This is not up for debate, that is the reason terrorists use assymetrical warfare.  If Iran wanted to take out tankers they are more vulnerable in many other waters, and Iran would have official deniability. Trust me, I did nothing for years of my life but study war and weapons, a carrier group in the straits would negate ALL of Irans warmaking capability.  Iran knows this, if they sponsored an attack WE would shut down all trade and gut their military like a fish.  We probably do not have the ability to occupy Iran, and I don't think we'll try but we sure have the ability to crush them.  How many ants can an elephant trample?
You studied war for years?

Yes, but did you learn anything?

You should have studied people.

When a nation like America puts another, weaker nation on the back foot, the result is almost always the opposite of that assumed by the aggressor nation. With some victim nations the response is quite low key. With others, it is completely mental. Suddenly you dont have a supine victim. Suddenly you have a nation trying to tear out your throat and they dont care if they die trying.

You should know this. Once upon a time you fought for indepenence against a tyrant king.

I suppose you have gone from a republic to a dynastic empire.

Such is the way of all arrangements.

Not everybody in the world thinks that God, Momma and Apple Pie equals the end of history. Not everybody thinks that the corporate machine of worker-slaves is the best way forward.

Anyway. I am away for a few days. Enjoy the rest of your weekend, or if you are moving to a new location, then pleasant sailing. Hope you help find some more oil with your next spud.

The United States has lost the ability to be the best economy in the world (now being the biggest bankrupted losers), has lost the ability of being the most criative cientific community (after electricity, the men on the moon and many important discoveries, all you can criate is horrific chemical, biological, and mini-nuclear weapons), you have lost the ability of being a respected country arround the world, now everybody hates, even in your long ally europe, even in your closest ally great britain, everybody hates you.

What I'm asking is don't lose the ability to love your children, your familys, your friends.

You know everyday in the midle east, some arab person you ignore, loses his friend, his chidren or his whole family.

Just don't ignore them, don't ignore their mourning.

See this is Islam, the Islam that you gave them, funerals everyday.

For what?

My continuing opinion:  Iran is to World War III, as Poland was to World War II, in that World War II had, in effect, been going on for a while before Germany rolled into Poland.  Poland was the trigger that brought in Great Britain and France.  

Unfortunately, guess who is playing the role of the Germans this time?

World War II in Europe effectively started on September 1st, 1939, when Germany invaded Poland. Russia completed the take over of Poland when it invaded the Eastern half on September 17th. It had not been effectively going on for a while before this point. Unless you count Austria and Czechoslovakia, and I'm not sure how you can. These instances are considered causes and sources of the war, not the war itself.

While Britain and France declared war on Germany for its invasion of Poland, they did very little, France did nothing, until Germany invaded France 9 months later.

I guess what I am trying to say is, I don't see your analogy. Who is playing the role of the Russians? Was Poland a belligerent? A regional power?

I wonder what the residents of Czechoslovakia and China (in the Thirties) would have thought about your assertion that the war had not yet started.  If you asked the residents of Iraq and Lebannon today if the war has started, I suspect we know what the answer would be.

In any case, Poland was the final trigger that caused Great Britain and France to declare war.  That's my point.  I think that a US attack on Iran would be the final trigger that would cause the world to coalesce against us.

George Bush said he was a "Uniter, not a divider."  He is probably going to unite the world against us.

In this case, then I would have to say I disagree with you.

I understand your points. I was specifically dealing with the Western war. I thought you were too, originally. They are related, sure, but in many ways they are separate entities. Japanese involvement in China went back to the early thirties if I am not mistaken.

If it is in fact all about a "final trigger," then I would expect a situation where Iran caused an incident that coalesced the world with the US against Iran just as likely, if not more.

I just don't find your predictions to be based on anything but your own feelings about how things will turn out and don't see how they are any more valid then the next guy's.

''and they did very little''

And you did precisely what? - diddly squat.

Your man Kennedy had written off the Brits after Dunkirk.

The Second World War (not WWII) Started in Europe as a hot war in Spain.

In the far east it started with the Japenese invasion of China.

In Africa, it started with the Italian invasion of Ethiopia.

Uncle Sam was at least five years late to that party , old boy...Still, better late than never.

PG -- you may be right.  In my poor/working class neighborhood I think that very few people believe in the political system at all.  Also, amoung younger people (below 30) politics is viewed as downright absurd.

The American political system is essentially, a dog wagged by an enourmous tail comprised of the military-industrial-finance complex.  Politics involves putting alternative friendly faces out there to front for fascism.  Any authentic political voices are marginalised and silenced in one way or another.

That is not to say that political involement is meaningless, but I do not expect positive change to come through political action at this time.

I expect we will drive blindly into the geopolitical and ecological apocalypse.  After a few years, we'll see if anyone survives to put some pieces back together.

Meanwhile, the odds of success with any sort of action toward sustainable and peaceful existence are very, very small.  I suppose we try them all -- including political actions -- against the odds.

The Democratic party is going to remain irrelevant as long as it remains the "other corporatist party". They need to declare allegiance to the truth, and the truth happens to be "leftist", not in the sense of favoring large government programs or bureaucracies, but in the sense of noticing that corporations and the very rich have a stranglehold on this country and taking the actions necessary to correct the situation. In essence, the Democrats need to become the Green party. Nothing else is worth the support of anyone in the reality-based community.

It ain't what you don't know that kills you; it's what you know that ain't so. [variously attributed]
Americans just know that they live in a great and shining example of a democracy, and the reality is very different. Here is a short list of features that are very bad for democracy:
  • Geographic districts sending a single representative to a deliberative body, winner-take-all.
  • The "Great Compromise", leading to undue influence of small states in the Senate.
  • The Electoral College.
  • The two-party stranglehold, and the primary system with politically-chosen dates.
  • Money in politics.
  • No acknowledged right of secession.

But most of all, a democracy in which the citizens do not get to decide how money works is not a democracy. If there were a predominantly agricultural country in which ten families owned all the land, all the elections in the world could not make that a democracy if land redistribution was off the table. Our form of state-enabled capitalism has clearly settled into a form that only benefits the very rich and no progress will be made until this is recognized.

This article reminds me of Oilcast show #28, November 30, 2005:

This bumper 28 minute show breaks an exclusive interview with a senior engineer from Mexican state oil company Pemex, who says "the days of the Mexican super giants are over."
He claims Pemex is in the "doorway of depletion" and "in the middle of the Hubbert curve." Hear this amazing interview online now...


The "senior engineer" wanted to remain annonomus and "leaked" information about Cantarell.  Listen to the broadcast.  It turned out he/she was right!

one important point that has not been mentionned is the quality of the crude in question. is it light sweet or heavy sour. what is the mix. inventories of the heavy sour are far more abundant than light sweet.
Wont Ghawar simply replenish itself abiotically? What's the big deal?
Absolutely. The concern is just about the time required.
rather than get our undies in a knot, this report and subsequent (and interesting) posts just points to the overall problem of inaccurate information.  Calls on posters to question the viewpoint of the information without historical consideration are valid.  TOD rocks ;)

not to get off on a conspiracy theory (but hey, it's a holiday..)  this would be an excellent way to discredit Heinberg with a faulty informant as there is no way Heinberg can check the facts.  The informant does not have to be scrutinized over his comments, only Heinberg on why he accepted this particular view.  Then any unrealized hysteria over 3mbpd tarnishes Heinberg.

However, whether Ghawar is at 3mbbd or not although important is also inmaterial to the efforts of energy security and living standards.  How we can be upset about peakers not predicting the demise of our civilization more accurately in the dark with little information except common sense and some graph paper is quite silly.  I for one an happy to know and even they would admit to some sway in their predictions.

Even so, it could be reported in the news for 5 days straight that Saudia is going down, and until the insurance,banking and stock markets learn how to tell the rest of us how to re-think energy, now, we're all heading for that cliff cluelessly stuck together like glue to the bumper of a hummer...

A nice article about journalism from George Monbiot here: http://www.monbiot.com/archives/2004/10/06/no-longer-obeying-orders/

This article outlines the meta issue of reporting and receiving information.  This also came up during An Inconvient Truth, where Al Gore shows that scientific journals zero times refuted global warming yet in the same time period news media did so 53% of the time, thereby confusing the public.  Of course outside the USA most people are not as confused, but if the USA had elected Gore and was on the Kyoto Accord now, then I'm sure the peak oil issue would also be widely reported now.

Anyway, if science is not being heard at the best of times even when it's openly available to people now, how are enough people going to respond in time to peak oil?  They simple cannot.

Although I have never doubted Heinberg's sincerity in reporting about peal oil, when we are all basically relying on whispers to know what's what, how can we ever really know?  This is just more reason for the development of international standards and open records.

in theory, there's no difference between theory and practice, in practice, there is!  

So is the consensus for 3mbpd been debunke or is it plausible?