free html hit counter Peak Oil Debunked: 89. SADAD AL HUSSEINI

Saturday, September 10, 2005

89. SADAD AL HUSSEINI

To support their doom argument, a lot of peak oilers are cherry-picking quotes from Sadad Al Husseini -- a retired executive of Aramco (the Saudi national oil company). A comment on this site (Peak Oil Debunked) is representative:
A senior Saudi oil geologist has stated to the New York Times that he believes Saudi oil will peak at about 12.5 to 15 million barrels a day. After that point, there can be no more growth in sour supply no matter what the world demands!

"When I asked whether the kingdom could produce 20 million barrels a day -- about twice what it is producing today from fields that may be past their prime -- Husseini paused for a second or two. It wasn't clear if he was taking a moment to figure out the answer or if he needed a moment to decide if he should utter it. He finally replied with a single word: No."

Once Saudi Arabia have peaked, then that's it -- the world has peaked. There will be no more economic growth of the oil dependent variety. Indeed, current industrys such as airlines will start to go broke. The New York times quote is from the comprehensive article below.
The Breaking Point (NYT article, Aug. 21, 2005, pdf)
Husseini certainly is an authority. Here's some background:
It can be argued that in a nation devoted to oil, Husseini knows more about it than anyone else. Born in Syria, Husseini was raised in Saudi Arabia, where his father was a government official whose family took on Saudi citizenship. Husseini earned a Ph.D. in geological sciences from Brown University in 1973 and went to work in Aramco's exploration department, eventually rising to the highest position. Until his retirement last year -- said to have been caused by a top-level dispute, the nature of which is the source of many rumors -- Husseini was a member of the company's board and its management committee. He is one of the most respected and accomplished oilmen in the world.(Source: same as above)
Things certainly do look bleak when you cherry-pick Husseini's comments, but let's put his remarks in context. Here's Husseini on the topic of Matthew Simmons:
Although Matthew Simmons says it is unlikely that the Saudis will be able to produce 12.5 million barrels a day or sustain output at that level for a significant period of time, Husseini says the target is realistic; he says that Simmons is wrong to state that Saudi Arabia has reached its peak. But 12.5 million is just an interim marker, as far as consuming nations are concerned, on the way to 15 million barrels a day and beyond -- and that is the point at which Husseini says problems will arise.(Source: same as above)
And here's Husseini on the broader issues of peak oil:
Q (ASPO-USA, Steve Andrews): My question to you, and I would like to share your answer with attendees at the conference as well as with our state's Energy Office here in Colorado: Do you have an approximate range when you estimate that world oil production might peak? Given that you won't be able to join us [at the November 10-11 Denver peak oil conference], your comments on this point would be tremendously appreciated.

A. Thank you for your e-mail. In response to your question, the answer is a little long winded but this is an important matter that needs a clear response.

Oil capacity today is not production limited but rather processing limited. That is to say, the DOE reports the world's refining capacity has leveled at around 83 mmbd for some time and refinery expansions are slow and costly. We have seen new downstream capacity investments average 300 mbd/year over the last several years. Doubling that rate would still put major changes in refinery expansions well into 2010 and beyond. Therefore the refinery capacities are now the effective ceiling for oil production.

The DOE shows oil demand (presumably after refining) is increasing at something like 1.5 - 2.0 % per year. This was doable in the past because of the excess refinery capacity that prevailed until 2003/2004. From here forward, satisfying oil demand will require 1.2 - 1.6 mmbd of new refinery capacity per year or 4 to 5 new world-scale refineries every year. These normally require 4 - 5 years to execute at a cost of no less than $ 2 B per 100,000 b/d of capacity. With deep conversion and petrochemicals, the investments are even higher.

Because of these massive requirements, I believe the production outlook will be gradual production increases over the next ten years limited by slow refining capacity expansions.

Given the current outlook in terms of global exploration and development, the rate of investments in the oil value chain, energy prices, and the prevailing legal and political investment climate, I believe oil production will level off at around the 90 - 95 mmbd by 2015. This plateau can be sustained beyond 2020 at continuously higher oil prices and with rapid improvements in overall energy efficiencies throughout the world.Source*
As you can see, Husseini disputes the idea of an early peak, or a Simmons-style near-term decline in Saudi production. His assessment largely agrees with the results of the report by Koppelaar (see #86).
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*) Thanks to antimatter for this link.

9 Comments:

At Monday, December 19, 2005 at 9:38:00 AM PST, Anonymous Charles Albritton said...

I am interested in your blogs.

 
At Sunday, April 22, 2007 at 3:18:00 PM PDT, Blogger Yer said...

Hello! Anyone awake there?

You left out Al-Husseini's final statement:

"Therefore my answer is: under the current circumstances and outlook, oil is likely to peak at a 95 mmbd plateau by 2015 and can then be sustained well beyond 2020 at increasing real oil prices."

So exactly how does a statement that oil will peak by 2015 debunk Peak Oil? And do you think 8 years is a long way off?

It doesn't matter if the production peak is a sharp peak or a broad peak or a plateau lasting 5 years or more.
In a world where oil demand is rising by more than a million barrels a year, when production reaches a peak and is no longer growing, there is a very, very serious problem.

It is a mathematical fact (not theory) that any finite resource that is progressivley more difficult to extract, such as oil, will display a production curve that reaches a peak and then declines.
You may quibble about the shape or timing of the peak, but you cannot deny that there is or will be peak.

 
At Monday, June 18, 2007 at 6:33:00 AM PDT, Blogger Caseygrl said...

JD isn't denying a peak. JD has said repeatedly that he definitely thinks that there will be peak oil, he just is trying to calm the whole chicken little "we're all going to die" mantra that peaple like ASPO, LATOC, Savinar, Campbell, Kunstler, and the other crocks.

 
At Tuesday, June 19, 2007 at 8:52:00 AM PDT, Blogger Caseygrl said...

preach on their various websites. That's all JD's trying to do. He's not denying PO won't happen, just that it won't be as bad as these people claim it will be.

 
At Thursday, January 17, 2008 at 3:04:00 PM PST, Anonymous Pencil Warrior said...

Doesn't calling someone a 'crock' lower the level of what should be a rational discussion?
Doesn't it seem logical from surveying the levels of preparedness for the transition in our society that the peak of oil production WILL bring massive pain?

 
At Saturday, February 2, 2008 at 2:27:00 AM PST, Anonymous ccpo said...

This guy is hyping, himself! As a poster above noted, he's pretending that peak at 2015 *isn't* short term peak. How biased does one have to be to make such a claim? Did this joker not read the Hirsch Report? At 7 years out, it's ALREADY TOO LATE.

Anyone who knows anything about this issue knows this. Anyone with a 6th grade education should know this. If you accept that peak will occur at some time, if you accept the contention it may well be 2015, if you understand the vital role oil plays in the world economy, and you have the nerve to claim 2015 *isn't* near-term peak, you are criminally negligent because you are guilty of willingly misrepresenting the truth which may lead people into inaction, thus resulting in harm to their persons or property.

 
At Saturday, February 2, 2008 at 2:36:00 AM PST, Anonymous ccpo said...

Further, have you given any consideration at all to what happens to world GDP if oil production stays flat? Let alone prices?

Get your head out of your pre-conceived notions. You cannot read what he stated and use it to support *debunking* Peak Oil.

Christ on a stick...

 
At Saturday, February 2, 2008 at 2:58:00 AM PST, Blogger JD said...

Further, have you given any consideration at all to what happens to world GDP if oil production stays flat?

Yes. During the 14 year period from 1979 to 1993, there was zero net growth in world oil production. The world actually produced substantially less than flat line production during those 14 years. Nevertheless, there was no interruption in growth of world GDP. These facts are demonstrated in 324. THE BIG GLITCH.

 
At Tuesday, February 9, 2010 at 9:21:00 AM PST, Blogger LeftLibertarian said...

It is clear now that Sadad Al Husseini's views are actually very much in line with what Matthew Simmons has been saying. Sadad Al Husseini has recently adopted the view that we are at a oil production plateau since declines cannot be overcome by the production increases coming online. He has also stated that 12.5Mbpd is the best Saudi Arabia can do and that various projections that include higher amounts are "unrealistic".

 

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