The Peak Oil Crisis: Our 4 Storms

Last week the focus of oil depletion returned once again to Saudi Arabia where oil production has dropped about 1 million barrels a day during the past year. As this is considerably more than the Saudis OPEC obligation to cut production, people are starting to ask questions about just what is going on.

The key question is whether the production drop is voluntary or whether the kingdom’s decades-old oil fields are starting to play out. The history of oil depletion is replete with examples of production from water-injected fields dropping like a brick. If this is indeed happening in Saudi Arabia, it will make headlines within the year and the world will never be the same.
A more benign interpretation of the decline in Saudi production is that they still have some years to go and are cutting production to drive up prices, save some oil for the grandchildren, or simply can’t unload the heavy, sulfur-laden crude that is becoming an increasing share of their production. If the latter situation is the case, then all should be well for a while as the Saudis are building new refineries to process the heavy crude and can then market the products.

If you should feel your worry-list can handle another item you might add rapidly declining Saudi oil production right after Iraq, the Iranian A-bomb, and the avian flu.

Falls Church News Press