The Saudis’ approaching twilight

” . . . I think I have a relatively high amount of credibility with some senior people within the Bush administration, but I can’t believe that they don’t read and listen to 90 other people that call themselves experts and I’m sure a lot of those people say, “God, that Simmons guy is really a . . . he’s just a ‘Cry Wolfer’ beyond the wildest imagination.”
Simmons has built up a great store of knowledge about Saudi Arabia, the “swing producer” that oil-consuming nations, such as the United States, have depended on for decades to make sure there is enough supply on world markets. Despite tight supplies and high prices, and recent attention to Peak Oil, about which Simmons has been warning for years, the Saudis insist that they can maintain and even expand their current level of oil production for decades to come. In fact, on the morning of September 28, 2004, just hours before I interviewed Simmons, the Saudis announced that they would increase oil production capacity. In debates, in articles, and now in his book, Twilight in the Desert, Simmons is challenging the Saudi assertion that the kingdom can keep ratcheting up production to meet the needs of ever oil-thirstier world markets.

The major message of Twilight in the Desert is that Saudi Arabia’s oil comes from only a few oil fields, including Ghawar, the world’s largest oil field, most of which have been producing for as long as half a century. These fields have developed the usual problems of aging oil fields, especially the problem of water encroachment, about which Simmons goes into great detail. Saudi oil fields are geologically complex, and they, and even subsections of the same fields, do not produce uniformly well. There have been few new oil discoveries in Saudi Arabia and what has been discovered is nowhere near the amount needed to offset depletion of the older fields in the face of increasing demand. The paucity of new discoveries and the need for expensive high technology to continue recovering oil from the older fields will keep prices high going forward.

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