Saturday, November 20, 2010

peak oil - why the pentagon is pessimistic

LeMonde | “Twilight in the desert” is a book summing up the arguments of a Texan oil banker who suggests that Saudi Arabia is overestimating its future oil production capacity. I’ve learned through the American Department of Defense that this book is the source of two recent Pentagon reports envisaging a severe lack of oil starting in 2012 and continuing until 2015 at least.

[Matthew Simmons, who wrote “Twilight in the desert, published in 2005, died in august at the age of 67. His analysis remain a major piece of the peak oil debate.]

According to the thesis developed in “Twilight in the Desert”, the official numbers published by Saudi Aramco, the national Saudi oil company, highly overestimate the true level of reserves that the largest world oil power is capable of extracting from its soil. As a consequence, according to Matthew Simmons, the Saudi oil production will no longer increase, and could even be on the point of a drastic reduction.

The advisory staff of the American armed services seems to consider the fears of Mr. Simmons as well-founded and credible, and based on this, the staff has produced a prognosis of a “severe energy crisis” that is potentially inevitable.

Two biannual reports, having appeared in 2008 and in 2010, describe the “environment” of the American Joint Chiefs of Staff [translator: “inter-armed service forces” in the original] (the JOE reports stand for Joint Operating Environment). They occupy an important place, in this reporter’s opinion, among the recent analyses recognizing the eventuality (or stating the threat) of a fall in the world oil production between now and the middle of this decade.

[The simple fact that the reports JOE2008 and JOE2010 come from the advisory staff of the joint chiefs of staff confers on them a certain importance. The U.S. armed forces have always overseen (very) closely the provisioning of this great power of the “free world” with Saudi black gold : since 1944 and the past alliance between President Roosevelt and King Ibn Saoud several days after Yalta, continuing to 1973 and the Yom Kippur war, when the U.S. Navy developed attack plans to get a hold of the Ghawar mega-field the no less vital terminal of Ras Tanura, and when at the same time Saudi Arabia agreed to secretly break its own oil embargo in order to provision the American sixth fleet, which was threatened with its gasoline tank going dry, and… continuing on to today.]

The 2008 and 2010 JOE reports describe in identical terms a diagnosis that figures to this day to be among the most pessimistic on the question of an eventual structural oil shock between now and 2015 [I was the first journalist to point this out, in April 2010 ]