I enjoyed Ronald Bailey's "Peak Oil Panic" (May 2006), but cannot agree on many points. Mexico's Cantarell field has peaked and is going into decline. That is the third largest field ever found. Kuwait recently reduced its claimed reserves by fro percent, taking percent of global reserves off of the table. Its Burgan field has peaked below where it had been projected to peak and it is expected to begin to decline after a brief plateau period. So much for the second largest field ever discovered.
Most recently, Saudi Aramco revealed that its production will fall at about 8 percent a year, but they think they can reduce the decline to 2 percent a year by in-fill drilling and reservoir management. The Ghawar field has been the backbone of Saudi production for many decades. The Saudis have been struggling with declining well productivity and growing water cut, and are running out of options. They now pump about 12 million gallons of salt water into the Ghawar to maintain reservoir pressure, and more and more of it is finding its way to the well heads. The space between the gas cap and the water table shrinks every year. Now they are plugging vertical wells and running new horizontal wells with lots of side branches. It won't end up producing more oil; it just accelerates depletion and makes the final decline steeper.
The 10 percent yearly decline in North Sea Norsk and U.K. fields ought to be warning us of Ghawar's future. The Saudis have the best technology and reservoir management team in the world, but you can't pump what is not there. When shortfalls have occurred recently, they were only able to bring additional, undesirable heavy/sour crude to market. The Saudi peaking announcement was bad news for the planet. They will never pump the volume of oil the cornucopians have predicted. Incidentally, the Saudis have used advanced secondary reservoir management techniques right from the start. There is no backup plan to get a second life out of their fields.
I really don't see any credibility in pronouncements from economists, political hacks, or AM shout-radio wackos that lots more oil or a cheap suitable replacement will come along and save us. I much prefer the wisdom of people who know something about the business.
The brewing natural gas disaster is going to be great fun too. It is likely that natural gas hookups will end in a few years, given the lack of exploration success with 63 percent more drilling rigs in the field since 2003. I...