There is a new report out by Simmons and Company which basically says that
we will not be able to count on Middle Eastern oil supply in the future. The
reason for this is demographic. The Middle East population is growing
rapidly and will require the internal use of much oil and gas just to take
care of their population. The report notes that just meeting water needs for
40 million people will require a huge jump in energy use. Today Saudi Arabia
has slightly over 20 million people. Within a generation, that could easily
double given their birth rates. (Osama had something like 50 siblings).
Thus, the oil won't be so easily exportable from a political point of view,
even assuming it is there. The Saudi Arabian fields average 45 years old
with two of the largest over 54 years old. Those fields are showing signs of
their age. Old fields don't produce rapidly.
The report points out that Shaybah is the first large field Saudi has
developed for years and it cost between $2.5 and $3.5 billion to develop.
It will produce at peak production 500,000 barels/day. That is $5,500 per
peak barrel. Other Middle eastern fields which await development will
require anywhere from $7,500 to $11,400 per peak barrel. While the over all
economics of the fields are great, the amount of oil per day for the world,
the rate of flow is not great for that investment.
The report is
The Middle East: The Energy Solution Or The Energy Problem?
For those who think we have a rosy energy future, take another think.
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