Calif. Field Goes from Rush To Reflection of Global Limits

…The prophet of limited supply is Matthew Simmons, a voluble Houston-based consultant who says the world hit its sustainable peak oil level in May 2005. He argues that even Saudi Arabia’s super-giant Ghawar field — with original reserves of 82 billion barrels and covering a 160-by-30-mile expanse — is in decline. A self-labeled “Darth Vader of darkness,” he travels the world and preaches his message in presentations to investors, military officers and Chinese officials.

According to his philosophy of “peak oil,” supply is so tight that the price of oil, even at its current level, is still too low. He predicts it is headed to $500 a barrel.


At the other end of the debate is Saudi Oil Minister Ali al-Naimi, a voice of optimism. “I am bullish about the role of technology in meeting future and current needs,” Naimi said at a meeting in Washington. “Tight conditions in oil markets have caused some observers to speculate that oil supplies are at or near their peak,” he said. “I believe such views are short-sighted and ignore the extent to which technology has enabled us to find and produce oil.” If technology enables the portion of oil recoverable from Saudi fields to rise 1 percent, he noted, that would amount to 3.5 billion barrels, or about a year’s worth of Saudi production.

Naimi’s role is to assuage a nervous market. He blames the continued run-up in prices on “speculators.” And he asserts that Saudi Arabia would be able to meet the world’s rising demand for years to come.

Many experts find themselves between these two poles.

Washington Post