This is an exert from testimony to the Australian senate, give by Dr. Bakhtiari, if you don't know who he is do a Google. Link to entire transcript is at the bottom.
Bakhtiari:
<<The decline of global oil production seems now irreversible. It is bound to occur over a number of transitions, the first of which I have called transition 1, which has just begun in 2006. Transition 1 has a very benign gradient of decline, and it will take months before one notices it at all. But transition 2 will be far steeper, and each successive transition will show more pronounced declining gradients. My WOCAP model has predicted that over the next 14 years present global production of 81 million barrels per day will decrease by roughly 32 per cent, down to around 55 million barrels per day by the year 2020.
Thus in the face of peak oil and its multiple consequences, which are bound to impact upon almost all aspects of our human standards of life, it seems imperative to get prepared to face all the inevitable shockwaves resulting from that. Preparation should be carried out on individual, familial, societal and national levels as soon as possible. Every preparative step taken today will prove far cheaper than any step taken tomorrow. I thank you for your attention during my opening statement, and I am ready now to try, to the best of my abilities, to reply to any questions that you have.
CHAIR—In the first set of questions, can we concentrate on the issue of peak oil itself and defining that, and then we will move on to the other issues.
Senator JOYCE—Thank you very much, Mr Samsam Bakhtiari. I have been a follower of you for a while; I have been one of your quiet fans. With regard to Hubbard’s peak, within the Ghawar oilfields and the Cantarell oilfields, can you explain to us some of the signs that these oilfields are running out of oil? I am talking about gaseous inertia or water inertia. What do you believe are the key indicators that these oilfields are past peak production?
Dr Samsam Bakhtiari—The supergiant oilfields are all very great oilfields. Today you have 40 per cent of world production in these supergiants. Managing a supergiant is a very difficult procedure. The larger the supergiant, the more difficult it is. I will firstly state the case of Ghawar. Why? Because it is the largest oilfield in the world by far.
On Ghawar
...They tell us that in Ghawar today there are 220, roughly, horizontal wells. The great danger of the horizontal well is that when the water reaches the well it is dead. So one day in the future at Ghawar, the water level will eventually reach the horizontal well...
When it happens on a large scale then Ghawar is going to collapse and you will have a cliff in the production of Ghawar. When you have a cliff there, the whole Saudi production system is going to fall apart. If that happens, we will start hearing bells ringing all over the place, and the price of oil is going to go through the roof...
On polar oil and ASPO
I have studied oil reserves for the past 40 years, from when it was a very new science. In the beginning, there were a few specialists who were not very good, and then came the greatest specialist of oil reserves. He began working for a petrol consultant in the 1990s and, in 1995-96, established what is in my opinion the best set of oil reserves in the world. These are the oil reserves of Dr Colin Campbell. I think these reserves are the best. I have been able to prove not only that these reserves adapted very well to my model but also that they correlate the production of the 11 OPEC countries in a satisfactory way. So I have adopted them.
Dr Campbell is of the opinion that the total endowment for conventional oil of the planet is around 1,900 billion barrels. I think this is the best number that we have at present. I have been working with that number for the past seven or eight years. Out of that number of 1,900 billion barrels, Dr Campbell is of the opinion that for the two polar sectors, the Arctic and Antarctica, you should have roughly 52 billion barrels...
On future prices
...oil will start to fall off to around 55 million barrels a day ... in 2020.
It is extremely difficult to forecast precisely the price of oil in the future. I can see a range of $100 to $150 not very far into the future. I can see a range of $100 to $150 [per barrel] not very far into the future...
There must be some outer limit, and I am beginning to think that maybe the outer limit could be $300 per barrel... I am not so sure yet, because we are entering a brand new era in human history, an era we have not been prepared for at all. For the past six generations, we have been used to having cheap oil always available whenever we wanted it, more or less. Today, in 2006, all of this is beginning to change. We are entering an era in which we know nothing much, where we have a brand new set of rules. I am trying to find out what these new rules are. I have already reached two or three new rules. One of the new rules, in my opinion, is that there will be in the very near future nothing like business as usual. In my opinion, nothing is usual from now on for any of the countries involved. And the lower you are in the pile, the worse it is going to get...
On oil company profits
I do not think it is in the interests of the oil companies for the price to go very high. I think they are very well satisfied with the present price, but I think it will not be in their hands. It will not be in the hands of the companies, it will not be in the hands of the oil producers. I can see Saudi Arabia and others being very worried by prices that are too high, but I do not think any one of these players can do anything about it...
On inflated Middle East reserve figures
Most reviews of the reserves of the major Middle Eastern countries today, especially the BP Statistical Review of World Energy, mention reserves amounting to between 600 billion to 700 billion barrels. These are official reserve figures—in other words, the countries involved say that they have so much oil reserves available. The Oil and Gas Journal and BP take these reserves at face value. As you mentioned, in the 1980s these reserves were revised upwards. For example, in 1988 Saudi Arabia, which had reserves of 160 billion barrels, suddenly took these up to 260 billion barrels. Since 1989, it has kept this number of 260 billion barrels; there has been no change to it up to this day. So, for 17 years, it as if they have not produced anything. In Dr Campbell’s opinion—and it is also my personal opinion—the reserves of the Middle East are roughly one half of what is officially said and presented. In other words, there should only be between 300 billion and 350 billion barrels of oil. This is the best figure I have come up with...
On International Energy Agency optimism
Maybe one explanation could be that they are interested parties and we are disinterested parties.
Naturally, a politician will never say that there is such a thing as peak oil. It is suicide to give bad news so a politician will never do that. He will always say, ‘The IEA says that we will be having 118 million barrels in 2030 so why worry?’
Secondly, you have the media. The media does not like peak oil. Why? There is no sponsorship for peak oil. The oil companies do not like peak oil because you should not say that your soup is cold; you should always say that it is very hot and very tasty, yes? So nobody wants to hear of this phenomenon of peak oil. I believe that some of the institutions—I will not name them; they are here and maybe you can guess which ones they are—are saying these things to act as a protection for some politicians who can say: ‘Because these institutions are saying these things, then we follow them. We do not follow Campbell and others...
On biofuels
You mentioned ethanol, biodiesel and all that. This is not the future. This is not sustainable because in the future, if our predictions are correct, the No. 1 priority will not be transport and all that. The No. 1 priority is going to be food. And for food you will have to have top priority for fertiliser and insecticides and whatever you need to produce food only. So ethanol is a very, very wasteful system. And again, however much you want to make some ethanol, it will still be a drop of water in the ocean. Just let me tell you that for every litre of ethanol you will need between three and four litres of water to produce it. The best way to go for these types of fuel, and certainly the most efficient way, is sugarcane. That is what the Brazilians are doing today.
With sugarcane you need one square kilometre of sugarcane to produce 3,800 barrels of ethanol per year. It is not very easy and it is very inefficient...
aph.gov.au |
