Bush: Can Saudi Arabia Increase Output?

As noted by The Oil Drum . Com, during his trip to Saudi Arabia Bush openly questioned whether SA had the capacity to increase production. One would be quite surprised were one to learn Bush needed to go to Saudi Arabia to obtain this information. One is further surprised Bush had decided to openly, though indirectly, acknowledge Peak Oil. While it is a certainty that BushCheney knows about Peak oil due to their extensive background in the oil industry and Cheney's statements in 1999 regarding oil, depletion and future supply, their prior association with Matt Simmons of Twilight in the Desert fame, etc., it is still startling to hear the president day it.

I know, you're thinking, "He said no such thing! Conspiracy theorist!" In fact, he did. This is a simple conclusion based on the following facts:

• The EIA, the USGS and the IEA all state that the bulk of future oil production must come from the Middle East, i.e. OPEC.
• Most of the other OPEC nations are producing at or near their limits.

Logically, it follows that if the KSA (Saudi Arabia) cannot ramp up production, nobody can make up the difference. In actuality, the KSA can ramp up, but probably not as quickly as many would like to believe. They have been adding wells at a huge rate over the last few years in preparation for ramping up production to 12.5 mb/d. One assumes, given that all fields deplete and the KSA's largest fields have been producing for decades, that they are also drilling to maintain production in older fields. But it takes time to bring new oil to market, whether from new wells at existing fields or new wells at new fields, and especially the latter. We recently had an announcement from Aramco that production at the new **** field will be delayed.

According to former Aramco production and exploration chief, Sadad al Huseini, 12.5 is all the KSA is likely to ever produce. BushCheney certainly know this if you and I do. One can only speculate that the public admission that the KSA may not have the capacity to ramp up is meant for the masses. It's a warning shot fired as if it wasn't meant to be serious. "We were only kidding" as it were. Plausible deniability so that BushCheney can later claim Peak Oil took them by surprise, too.

So, there you have it from the horse's ass's mouths: de facto statements of Peak Oil.

Here's some more on the topic:

Bush Acknowledges Peak Oil

This is a pretty stunning admission, during his press conference in Saudi Arabia:

I hope that OPEC, if possible, understands that if they could put more supply on the market it would be helpful. But a lot of these economies are going -- a lot of these oil-producing countries are full out.

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...There is no longer any argument in the industry that non-OPEC oil is peaking (that includes the International Energy Agency and even ExxonMobil)

...the topic was disucssed 3 separate times in the interview:

I also understand the dynamics behind the issue, and that is growing demand from U.S., but more particularly, China and India, relative to supply.

Oil is a commodity; it isn't something you just turn a tap. I mean, it requires investment, exploration, a lot of capital. I talked to His Majesty early on in my presidency in the hopes that they would explore for new fields; they have. They've increased their capacity. But in the meantime, demand has gone up quite substantially.

Note that Bush states that Saudi Arabia has increased its production capacity since "early on in his presidency"...

...BP statistics show that Saudi internal consumption jumped from 1.5mb/d in 2000 to 2.0mb/d, which means that fully one third of Saudi Arabia's production increase went to domestic demand).

I would like for them to realize that high energy prices affect the economies of consuming nations. And that if these economies weaken, those economies will eventually be buying fewer barrels of oil. And having said that, there is not a lot of excess capacity in the marketplace. What's happened is, is that demand for energy has outstripped new supply. And that's why there's high price.

That's the third time he said it.

Now ask yourself, "Why is George Dumbya Bush off-grid?" (Thanks to LATOC for the link.) Here we have the most anti-environment, ecologically devastating president in the history of this nation, but he's off the grid? Is he telling YOU to get off the grid? Is he telling YOU to conserve? Is he telling YOU to build yourself a passive solar home complete with gray water re-use? No? Why not? This is the man who invaded a nation for its oil. Why in the world would he be against Kyoto, deny global warming for years, eviscerate the science of his own Executive Branch and muzzle James Hansen, perhaps the world's leading climate scientist, but live in an OFF THE GRID home?

As my economics prof in university used to say, "Rhetorical question."

Oil Price Touches $100 a Barrel; Signal of Pending Oil Shortages Ignored

The price for West Texas Intermediate (WTI) oil touched $100 on January 2, 2008, a new milestone. According to TheOilDrum.com, WTI oil price has been giving a very clear signal of pending shortage for over five years now, and in breaching the symbolic $100 a barrel mark, continues to do so. Those driving the world economy have steadfastly ignored this red warning light. In doing so, they are steering the world toward an energy disaster characterized by shortages, high energy prices, inflation, growing inequity, civil unrest and famine.

(PRWEB) January 4, 2008 -- Oil Production Graph Data for graph

A Signal Ignored
...The $100 a barrel price is a sign that times will never be the same again. According to TheOilDrum.com, the world is entering a new era, where the supply of energy will come to dominate the political landscape in a way that is currently not recognized by any of the leading candidates.

Over the past two years, citizens have been repeatedly assured that there is no problem with future oil supply... the public has heard false promises of lower future prices, and been beguiled by the possibility of a price collapse in the face of excess supply...

Both oil and natural gas resources around the world are found in underground reservoirs of a finite size... As the quantity of oil remaining in place falls, the rate at which oil can be recovered also falls... This happened to the United States in 1970... oil production... has since declined from... 9.6 million barrels a day (mbd), to ... 5 mbd. ...the North Sea, the Alaskan fields on the North Slope, and the huge Cantarell field in Mexico have entered irreversible decline... the world is now reaching the point where all of the oil fields of the world are in aggregate coming to peak production... countries that still have a surplus of oil to export are seeing ...an increase in their own demand for oil, which reduces the amount that can be made available for export... The increasingly limited ability of nations such as Saudi Arabia and Russia to increase oil production is already becoming evident, leading to a reduced potential for raising world production. It now appears unlikely that the world will ever see a daily oil production rate of 90 mbd, even when natural gas liquids and condensate are included. Thus, future projections that speak glibly of numbers above this level are foisting a canard on the world's population that all will come to regret...
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