Saudi Arabia as the Canary in the Coal Mine
We currently have the conventional wisdom (CW) folks in one corner asserting that the world peak is years to decades away. Historically, when CW has been matched up against Hubbert Linearization (HL), HL was won, most recently in the North Sea. I am not aware of any specific HL predictions involving the North Sea, but I don't think that anyone disputes the plot. It's basically a perfect linear progression. The North Sea is a fascinating case history because it tests the "technology will save us" theory. The North Sea peaked at the same point, relative to depletion, as the Lower 48, 29 years after the Lower 48 peaked. So much for the technology argument.
(In an interview in Barron's, Matt Simmons said that the major oil companies working the North Sea were predicting, in 1999, that the North Sea would not peak until 2010. Note that the major oil companies working the North Sea had the best data, best engineers and the best technology available.)
In any case, given the vast complexities involved in evaluating world oil production, I have pretty much reduced my argument to just Saudi Arabia (SA). I certainly think it is possible for the world to peak without SA peaking. However, I can't imagine anyone asserting the opposite--that SA can peak without the world peaking, which brings me back to my point that SA is the canary in the coal mine.
Khebab's HL plot for SA--which showed SA to be 58% depleted in 2005--looks just like the other regions that have gone into terminal declines.
To expect to see flat to rising production in SA from the 58% mark is to expect to see that which has never before happened.
The HL method and historical models predict a production decline in SA.
The Saudis have admitted to a 5% year over year production decline, but they claim that it is voluntary. I doubt that it is voluntary.
As I have relentlessly pointed out, the immediate problem for the world economy is that the top exporters--like SA--are more depleted than the world is overall, while oil demand in the exporting countries is, in most cases, going up very rapidly, resulting in a two way squeeze on available net export capacity.
I strongly advise everyone to practice ELP--Economize; Localize & Produce.
Economize--Assume that your income just dropped by 50%.
Localize--Assume that gasoline prices are in excess of $6 per gallon.
Produce--Look into becoming or working for a provider of essential goods and services, especially anything related to food and/or energy production/conservation.
[new] westexas on Wednesday June 07, 2006 at 9:19 AM EST
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