It appears that the Ghawar field has peaked. Al Jazeera quotes a Montreal banker who sees evidence of Hubbert's peak in the Ghawar...a substantial source of the world's supply of oil.

(Bernhard, at MoA, posted this in comments, and I think it's the most important article I've seen over the last few days, so I'm including it here.)

Just as I was about to post this, I saw another diary entry from PLS that covers some of the same ground (in the first quote), but this is important, more important than Schiavo and all the diaries about that mess, so pardon me for bringing this up again.

The Bank of Montreal's analyst Don Coxe, working from their Chicago office, is the first mainstream number-cruncher to say that Gharwar's days are fated.

Coxe uses the phrase 'Hubbert's Peak' to describe the situation. This refers to the seminal geologist M King Hubbert, who predicted the unavoidable decline of oilfields back in the 1950s.

"The combination of the news that there's no new Saudi Light coming on stream for the next seven years plus the 27% projected decline from existing fields means Hubbert's Peak has arrived in Saudi Arabia," says Coxe, referring to data compiled by the International Energy Association's (IEA) August 2004 monthly report.

Coxe isn't the only or first to make this claim this year. Again from Al Jazeera Feb. 2005

Energy investment banker Matthew Simmons, of Simmons & Co International, has been outspoken in his warnings about peak oil before. His new statement is his strongest yet, "we may have already passed peak oil".

The subject of peak oil, the point at which the world's finite supply of oil begins to decline, is a hot topic in the industry.

Arguments are commonplace over whether it will happen at all, when it will happen or whether it has already happened. Simmons, a Republican adviser to the Bush-Cheney energy plan, believes it "is the world's number one problem, far more serious than global warming".

--to see this coming from someone in the Bush administration; however, makes me immediately suspicious that Bandar Bush and Bush al Saud are going for a little price manipulation. Simmons was on the infamous energy policy task force, it seems. Excuse me if I don't trust anything from this crew.

...Except that both of these articles reinforce these stats and comments:

At the beginning of 2004, oil giant Royal Dutch Shell shook the world in a series of revelations indicating that about a fourth of its oil and gas reserves does not exist. The faked oil and gas reserves amount to some 4.5 billion barrels. At $35 per barrel as the basis for calculating Shell's "accounting errors", this yields a sum of $150 billion, compared with the total market value of Shell shares 7 May 2004, which is 140b euros (more than $150 billion at the time)..

Shell is not alone. El Paso of Houston Texas revised its reserves down by 43% on 31 December 2003. The company Forest Corps announced a new field of 49 million barrels, which was revised down to just 8 million a year later by Redout Shoal in Alaska; and according to Lothar Komp, writing in the Executive Intelligence Review, "there are many others."

Since the collapse of the Soviet Union, the Russian reserve estimate has fallen by around 30%. And as long ago as 1993, a Russian oil minister described his country's reserves as "strongly exaggerated due to inclusion of reserves and resources that are neither reliable nor technologically or economically viable".

So, even though the five big Middle Eastern countries do hold around half the world's remaining oil, there is a great deal of uncertainty as to how much there really is, and how long it is going to last.

Another bombshell was dropped in November 2004 by BP exploration consultant Francis Harper, who estimated the amount of total usable oil reserves in the world at 2.4 trillion barrels, considerably less than the 3 trillion assumed by bullish commentators such as the US government's geological survey. He said production would peak between 2010 and 2020; and demand will outstrip supply much earlier than other forecasts by ExxonMobil Corp. (XOM) or Royal Dutch/Shell Group (RD SC.

And Republican Roscoe Bartlett addressed this issue in March, as well.

(I suggest you read his entire presentation. I hadn't seen it before. I am grateful to see that someone is trying to be rational in our government about this issue...he knows that drilling ANWAR is not the solution.)

From Barlett:

 The challenge, then, is to reduce consumption ultimately to a level that cannot be sustained indefinitely without succumbing to Jevons Paradox.

   How do we buy time, the time that we will need to make the transition to sustainability? Obviously, there are only two things that we can do to buy time. One is to conserve, and the other is to be more efficient. And the gentleman from Maryland (Mr. Gilchrest) mentioned our increasing efficiency. We have done a great job. Our refrigerators today are probably twice as efficient as they were 20 or 30 years ago. But instead of a little refrigerator, we have a big one. Instead of one, we may have two. So I will bet we are using as much electricity in our refrigeration as we ever used.

   Conservation, we can do that. Remember several years ago when there were brownouts, blackouts in California and we were predicting, boy, the next year is really going to be rough? Do the Members know why it was not and we did not see any headlines about blackouts in California? Because knowing that there was a problem, the Californians, without anybody telling them they had to, voluntarily reduced their electricity consumption by 11 percent. That is pretty significant. And that avoided the rolling blackouts or brownouts.

   And, finally, we must commit to major investments in alternatives, especially as efficiencies improve. This must ultimately lead to the ability to do everything within the capability of renewable resources. If we have got a solar breeder, and this shows a picture of a solar breeder. That, by the way, is about 5 miles from my home. It was built by Solarex, and it is a sign of the times. Mr. Speaker, this is now owned by BP. They know that oil is not forever. They are now the world's second largest producer of solar panels.

This man seems to get it. He knows we need to develop small scale, localized economies, in energy, and by extension in food production and distribution, in making birth control available to avoid starvation when petrol-based fertilizer is no longer viable as part of foreign aid, no matter how much the fanatics scream...surely they care about starvation, right?

Have I missed the bipartisan call for a push to deal with this issue, with the same urgency that was put forth (actually, this is more urgent) when Sputnik became a point of pride and concern for America's ability to deal with the future?

What could be more urgent?  

If Congressman Bartlett dressed up like Jacko, do you think his speech could get as much attention on CNN? This issue only deals with what is most probably the beginning of a new era and the end of the industrial age as we have known it.

Bartlett is or was supposed to talk about this issue again this week. I think we should put aside partisanship and call in support of his willingness to put this important issue on the table (and pardon me if I'm missing the politics of it all), and also call our legislators to tell them this issue MATTERS to the people who vote for them.

Let the religious wingnuts self-destruct. Let the rest of us work together to create a decent future for our children.

Originally posted to fauxreal on Wed Apr 13, 2005 at 12:32 AM PDT.

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