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| World Marketplace |
Fuel Fossils
Matthew Simmons with additional reporting by Daniel DelRe
08/01/2005
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Saudi Sclerosis
The oil fields of Saudi Arabia, historically the source
of much of the West’s imported crude, exemplify the global dilemma of peak oil.
In this desert kingdom, five fields account for almost 90 percent of national
oil production, a fact that only darkens prospects for avoiding a worst-case
peak oil scenario. The premier field at Ghawar peaked sometime between 1981 and
1982 at 5.8 million barrels per day and is currently down 16 percent from that
level. Moreover, Ghawar relies on only 10 to 15 percent of its wells for nearly
80 percent of the oil it produces; the balance of its reserves consists of less
viscous oil and is found in geologically complex terrain that makes drilling
difficult. The other principal Saudi fields of Abqaiq, Berri and Safaniyah
peaked years ago and are now producing between 50 and 60 percent of their
maximum levels. The high-quality reserves at Abquaiq and Berri are almost
entirely depleted, while the heavy oil that makes up Safaniyah’s chief reserves
requires extensive refining.
Shaybah, the only other Saudi field where light
crude is produced, yields only 500,000 barrels per day, almost 40 percent below
its peak. Furthermore, extraction in this field is extremely difficult because
the underlying earth is not very porous, and cracks and grooves hide the oil in
pockets that are difficult to access despite today’s sophisticated drilling
technology.
In addition to declining production levels, evidence of peak oil
is found in the growing amount of water being extracted with the petroleum from
Saudi fields. As petroleum engineers extract oil from underground reservoirs,
they pump water back into them to maintain pressure that pushes oil to the
surface. Naturally, the water mixes with oil, and some is extracted. In many of
the Saudi fields, the proportion of water in the oil is increasing, a phenomenon
akin to the hardening of arteries in an aging human body.
| Prudhoe’s oil production has declined steadily from roughly 1.5 million barrels per day to 300,000. |
Improvements in
technology have kept these problems at bay for most of the past two decades.
Three-dimensional seismic imaging, horizontal drilling techniques and computer
reservoir models—all of which make oil easier to find and extract—lulled oil
executives, engineers and policymakers into thinking that supply would be
virtually limitless and easily accessed. In their defense, seemingly compelling
evidence surfaced to justify their faith in technology. Engineers at Royal Dutch
Petroleum were able to increase production at Oman’s Yibal field from a
sputtering 1,500 to 2,000 barrels per day to more than 10,000 by using a
horizontal drilling technique. Awed by this success, the Royal Dutch engineers
persuaded the Omani government to allow them to roll out this technology through
most of the country’s fields. Production at Yibal skyrocketed, reaching a peak
of 250,000 barrels per day in 1997, fostering the illusion that technology could
resuscitate aging oil fields. Within years, however, production began falling,
and, according to the International Energy Agency’s estimates in April, is now
only 30,000 barrels per day, only 12 percent of the peak reached eight years
ago. Technology, it seems, is not the panacea that oil executives had
imagined.
Adding to this problem, the collapse of oil prices in the early
1980s motivated field managers to ramp up production in order to provide the
investment returns that originally justified development. They drilled new wells
and blasted them with water and gas to boost well pressure. With production
going gangbusters—nearly 2.5 times a safe level in some cases—reservoir
pressures quickly fell, making it difficult to extract quality oil. Without
sufficient pressure, most of the fluid pumped from underground is brine and
sediment.
The majority of oil fields currently under development produce only
20,000 barrels per day on average, versus several hundred thousand from the
giant fields upon which the world currently depends. If this trend toward
smaller fields persists, energy companies will need to discover and develop more
than 3,000 new fields by 2010 to maintain production levels.
Switching to
alternative energy sources or more efficient uses of gasoline can delay the
arrival of peak oil, but only if undertaken on a grand scale. For example, 1
million cars getting 80 miles per gallon would reduce consumption by only 45,000
barrels of oil per day, or .5 percent of the daily global demand for oil.
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