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The Biggest Saudi Oil Field Is Fading Faster Than Anyone Guessed

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Re: The Biggest Saudi Oil Field Is Fading Faster Than Anyone Guessed

#61

Post by simonh »

lefstathiou wrote: post #9

So 52 years worth of reserves assuming maximum capacity of 12mm barrels harvested a day. Now I am no mathematician but given a 1-2mm per day average and what will likely become a declining demand for oil over next 20-30 years, they have half a millennia worth of oil lying around. This well seems like a non issue to me.

This is the cheapest oil to pump in the world, therefore it is likely to be the last to ramp down production. All the others will become uneconomical before this one does and therefore, unless they tap out while prices are still high, will stay in the ground longer.

Re: The Biggest Saudi Oil Field Is Fading Faster Than Anyone Guessed

#62

Post by ppf »

tqkxzugoaupvwqr wrote: post #42
doctorpangloss wrote: post #5

Earlier quoted context omitted.

The US was a net exporter of crude oil as recently as December, 2018. Indeed, only an idiosyncrasy of the law, reversed in 2015, prevented the comparably colossal, richest country in the world from being a net exporter until very recently.

Putting my tinfoil hat on: From a geopolitical standpoint, the USA’s longterm strategy likely was to deplete the oil reserves of foreign nations while keeping a large domestic reserve until the end. This has the advantage of being able to force those nations into submission once their oil runs out. When that is the case, domestic production is ramped up to cover domestic needs and the needs of foreign nations … as lo…

I think you're overstating the position of clean energy. The US currently gets 11% of its power from "renewables". 45% of that is from burning biofuels, wood, and a very small amount of bio waste.

Re: The Biggest Saudi Oil Field Is Fading Faster Than Anyone Guessed

#63

Post by ppf »

ppf wrote: post #60
benj111 wrote: post #4

Interesting to consider the politics of this. On the one hand Saudi Arabia and others want to give the illusion of the wealth lasting for ever. On the other hand, lower reserves would lead to higher prices, which is something they'd want to maximise.

Not really - they are relying on keeping output high to depress prices. Otherwise, other sources of oil (eg, US shale, South American oil sands) that are more expensive to extract become worthwhile, sending oil revenues to those other countries.

You are right that the politics of this is very interesting, though.

Re: The Biggest Saudi Oil Field Is Fading Faster Than Anyone Guessed

#64

Post by locuscoeruleus »

chvid wrote: post #39
chrischen wrote: post #23

Earlier quoted context omitted.

52 years is a blip in human civilization. I'd be curious to see how in the grand scheme the depletion of oil looks. Will our tech/development boom grind to a halt all of a sudden? Do we switch to nuclear?

To me as a casual observer it has always been obvious that the price of energy over the long term is going to zero. Ultimately all provided by renewalable sources. Sure the price of certain forms of energy (wood fire, oil ...) may go up over time but while that happens cheaper sources appear and ultimately take over.

> To me as a casual observer it has always been obvious that the price of energy over the long term is going to zero.

This is not at all obvious to this casual observer. Earth radiates heat away at a constant rate. We can never produce more energy than the earth radiates away, for obvious reason. With current trajectories we will release more energy than earth radiates away in less than 200 years. I'm not sure how the price of a limited resource can go to zero, but I'm also not very well versed in economics.

Re: The Biggest Saudi Oil Field Is Fading Faster Than Anyone Guessed

#65

Post by max_wen »

Arnt wrote: post #53
max_wen wrote: post #33

Earlier quoted context omitted.

- Electric cars are still less than 5% of new car market. Hardly impactful - The increase in efficiency is more than offset by the growth in overall car market - Potential legislation in China? India? Emerging markets? Sorry but nothing suggests that is happening

Bosch and about six other manufacturers of car parts disagree with you and expect sharply reduced demand for ICE-specific car parts.

I agree that at least 6 manufacturers of ICE-car parts in the EU and USA will be seeing reduced demand in the future

Re: The Biggest Saudi Oil Field Is Fading Faster Than Anyone Guessed

#66

Post by benj111 »

Someone wrote: post #47
benj111 wrote: post #4

Interesting to consider the politics of this. On the one hand Saudi Arabia and others want to give the illusion of the wealth lasting for ever. On the other hand, lower reserves would lead to higher prices, which is something they'd want to maximise.

No, they want to maximize the amount of money they get out of their oil, with money they get now being worth more than money they will get next year, with that being worth more than money they get a decade from now, etc. Also, the house of Saud isn’t playing only that game. They also want to stay in power. They’re not universally popular in the region, so that means listening to their faraway supporters, who want to…

I don't get what you're disagreeing with me about?

Re: The Biggest Saudi Oil Field Is Fading Faster Than Anyone Guessed

#67

Post by nostrademons »

govg wrote: post #44
vichu wrote: post #38

Earlier quoted context omitted.

I wouldn't be too concerned as renewables and nuclear technology should be at the point where it would be able to pick up the slack - we know the end is coming and we can prepare for it. An interesting thought experiment is whether or not humans (or some future species) would be able to reproduce the technological advancements that oil enabled given some sort of apocalypse scenario that resets us to year zero.

Oil isn't somehow magical in any manner - everything that oil does today can be boiled down to supplying kinetic energy. We don't use its chemical properties in any special way, it just happens to be among the most efficient in terms of calories per kg. With advances in battery tech, and large-scale shift to renewables, I think running out of oil is largely a non-issue in the long run (of course we'll have pains in s…

The biggest issue is actually food - most of the seeds grown today are engineered to depend upon fossil-fuel based chemical fertilizers, and cannot actually survive on their own without both the chemical fertilizers and a large helping of herbicides/pesticides/fungicides (many of which are also produced by the chemical industry). Break that dependency and you have to undo the Green Revolution that multiplied agricultural output by 10x. Do that and instead of the world's current food production being able to support a population of 9B if they were all willing to eat a vegetarian diet, you'd be looking at 900M, i.e. about 85% of people on earth would have to die.

I suspect that if you took away all the demand for oil from powering cars, though, there'd be plenty left at reasonable prices for growing food and maybe even flying planes. So you do need some fossil fuel production, but get rid of its use in automobiles, heating, and electricity and the remaining reserves can be allocated much more efficiently.

Re: The Biggest Saudi Oil Field Is Fading Faster Than Anyone Guessed

#68

Post by mruts »

saagarjha wrote: post #40
KorematsuFred wrote: post #30

Earlier quoted context omitted.

When I started studying economics the most baffling thing I learned was that the total amount of Oil we had was increasing and not decreasing. That weird fact kind of made me learn the basic concepts better and I think I have learned not to read too much into these sort of news items. Journalist often lack this outlook. The world is not going to run out of Oil ever. The world is more likely to run out of "need for oi…

> The world is not going to run out of Oil ever This is technically true but not really a great way to look at the issue. We will always have oil; it will just get progressively more difficult to extract it. The point where we “run out” is when it is no longer economical to extract it from whatever deposit it’s in.

I think that there’s going to be an equilibrium for a long time. The less oil we use, the cheaper it will become and we will probably just be using the cheapest and most accessible oil fields.

Or, if history and the Malthusian fallacy is any indication, increasingly advanced technology for cheap oil extraction will always put prices in equilibrium, regardless of the demand for oil and the cost of extraction.

Re: The Biggest Saudi Oil Field Is Fading Faster Than Anyone Guessed

#69

Post by benj111 »

ppf wrote: post #63
ppf wrote: post #60

Earlier quoted context omitted.

Not really - they are relying on keeping output high to depress prices. Otherwise, other sources of oil (eg, US shale, South American oil sands) that are more expensive to extract become worthwhile, sending oil revenues to those other countries.

You are right that the politics of this is very interesting, though.

Yes obviously there are many factors that come into play.

But this is one of the few factors they can make up. You can't fudge production numbers, you can fudge what's still in the ground. But which way to fudge it?

Re: The Biggest Saudi Oil Field Is Fading Faster Than Anyone Guessed

#70

Post by mschuster91 »

govg wrote: post #44
vichu wrote: post #38

Earlier quoted context omitted.

I wouldn't be too concerned as renewables and nuclear technology should be at the point where it would be able to pick up the slack - we know the end is coming and we can prepare for it. An interesting thought experiment is whether or not humans (or some future species) would be able to reproduce the technological advancements that oil enabled given some sort of apocalypse scenario that resets us to year zero.

Oil isn't somehow magical in any manner - everything that oil does today can be boiled down to supplying kinetic energy. We don't use its chemical properties in any special way, it just happens to be among the most efficient in terms of calories per kg. With advances in battery tech, and large-scale shift to renewables, I think running out of oil is largely a non-issue in the long run (of course we'll have pains in s…

> We don't use its chemical properties in any special way,

We do, 99% of plastics is made using fossil fuels. Big players are trying to shift to sustainable alternatives though, for example LEGO: https://www.lego.com/en-us/aboutus/news-room/2018/march/pfp

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