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"For those oil enthusiasts who believe that petroleum will remain abundant for decades to come—among them, the president, the vice president, and their many friends in the oil industry—any talk of an imminent 'peak' in global oil production and an ensuing decline can be easily countered with a simple mantra: 'Saudi Arabia, Saudi Arabia, Saudi Arabia.' Not only will the Saudis pump extra oil now to alleviate global shortages, it is claimed, but they will keep pumping more in the years ahead to quench our insatiable thirst for energy. And when the kingdom's existing fields run dry, lo, they will begin pumping from other fields that are just waiting to be exploited. We ordinary folk need have no worries about oil scarcity, because Saudi Arabia can satisfy our current and future needs. This is, in fact, the basis for the administration's contention that we can continue to increase our yearly consumption of oil, rather than conserve what's left and begin the transition to a post-petroleum economy. Hallelujah for Saudi Arabia!
But now, from an unexpected source, comes a devastating challenge to this powerful dogma: In a newly released book, investment banker Matthew R. Simmons convincingly demonstrates that, far from being capable of increasing its output, Saudi Arabia is about to face the exhaustion of its giant fields and, in the relatively near future, will probably experience a sharp decline in output. 'There is only a small probability that Saudi Arabia will ever deliver the quantities of petroleum that are assigned to it in all the major forecasts of world oil production and consumption,' he writes in Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy . 'Saudi Arabian production,' he adds, italicizing his claims to drive home his point, 'is at or very near its peak sustainable volume...and it is likely to go into decline in the very foreseeable future.'
In addition, there is little chance that Saudi Arabia will ever discover new fields that can take up the slack from those now in decline. 'Saudi Arabia's exploration efforts over the last three decades were more intense than most observers have assumed,' Simmons asserts. 'The results of these efforts were modest at best.'"
See also this interview with M.R. Simmons. Excerpt:
The basic assumptions of energy planners at the highest levels have been that the Saudis will continue to increase their output to meet rising demand. But you're saying that they couldn't really produce more oil if they wanted to.
I'm basically asserting, without complete proof, that from a planning-for-risk point of view we should start assuming that it is quite risky for them to keep producing oil at high levels. It is not at all certain that the Saudis could sustain high rates for even as much as a decade, let alone what they claim. They said in Washington recently that they could increase their production to 15 million barrels a day and keep it there for at least 50 years.