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Ghawar dead or dying?

The death of Empires can be found in the seeds of their own successes of the past. For the Amerikan Empire it was cheap energy.

Long live a sustainable and very local Cascadia!
Ghawar Is Dead!
by Matthew S. Miller

"How could we drink up the sea? Who gave us the sponge to wipe away the entire horizon?
What were we doing when we unchained this earth from its sun?"
- Friedrich Nietzsche, The Gay Science- 1882

"My father rode a camel. I drive a car. My son flies a plane. His son will ride a camel."
- Anonymous Saudi Sheik - 1982

"Ghawar, Ghawar she gave and gave; They sucked her dry like mankind's slave;
The Sheiks told us that big oil lie; And all those people had to die."
- Lyrical History - 2082

I've watched in shock and awe in recent days, shaking my head and wringing my hands. Yet another unremarkable narrative of celebrity intrigue entered the echo chamber of the mainstream media system and its 24/7-positive-feedback-amplification-loop to emerge as biggest news event - no, the earth-shaking cultural event of the year. This time it is... Anna Nicole is dead!

Her mournful supplicants conduct vigils in her memory and quietly reflect upon her iconic life, wishing her soul Godspeed. Meanwhile, we are left to ponder the paternity of her unfortunate offspring and the symbolic meaning of her celebrity status for posterity. All the while we wait with bated breath as Wikipedia straightens out the facts of her untimely demise.

Hers was the quintessentially American tale of the technological metamorphosis of East Texas trailer trash into the bearer of the trophy titties for an oil tycoon. Her bare breasts in the pages of Playboy reaffirmed the greatness of our country! She pulled her self up by her bra-straps and made her way in the world. We imagine that the indelible image of her "candle in the wind" life will never be extinguished because she really lived the collective dream. Sometimes it's funny how fake-life makes contact with real-life.

It was also announced recently, without the same media feeding frenzy, that another queen of mass-culture is dead too. Few of us even know her name. Rather than being the personification of the contemporary zeitgeist, she is one of the cornerstones of what Marx called global capitalism's base. She was an integral part of the concrete material conditions that make our peculiar form of social organization possible. Her name is Ghawar, and she is the mother-of-all oil fields. She was once a veritable sea of light sweet crude 174 miles long and 12 miles wide, under the sands of the eastern province of the Kingdom of Saudi Arabia (KSA), and now she is dead.

Ghawar is by far the largest conventional oil field ever discovered. Since first tapped in 1948, Ghawar has produced some 60 billion barrels of oil and accounted for 60-65% of Saudi production from 1948-2005. While actual field by field production numbers remain a Saudi State secret, Ghawar is estimated to produce more than five million barrels per day or 6.5% of the planet's daily production total of 84 million barrels.

Ghawar's obituary has already been written, but the Saudis have thus far prevented the appropriate authorities from entering the house to inspect the body. We have only second hand reports of her demise. Of these accounts, the most notable is investment banker Matthew Simmons' book Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy. Simmons assembles a picture of declining Saudi production from publicly available technical reports written by Saudi-Aramco's own reservoir engineers in recent decades. His portrayal of the situation is dire indeed. He claims that "When Saudi Arabia peaks (enters the unavoidable state of permanent production decline) the world, categorically, has peaked." It looks like the 2006 numbers confirm Simmons' 2005 prophecy.

The writers at the Oil Drum, a data driven oil analysis website, after assessing the production data from several independent reporting agencies, claim that Saudi production is down a whopping 8% in 2006 from 2005 numbers. The decline would have been closer to 14% without the addition of the Haradh III mega-project. They assert that Saudi Arabia has now officially peaked and that the pace of production decline there is likely to accelerate. Remember, Ghawar accounts for 60% of Saudi production.

A correlate of this geologic prediction is their prediction of the seismic effect this news will have on KSA political life. This is not positive; think terrorist attacks, followed by beheadings, followed by rebellion, followed by more beheadings, followed by boots on the ground - American boots.

Ghawar has been on life support for some time. The wide-spread use of advanced extraction techniques like water-injection and horizontal-brush drilling are the hallmarks of field maturity and imminent production collapse. Brush drilling is to an oil reservoir what a straw is to the paper cup wrapped around a chocolate shake -it allows you to suck out every last bit of creamy goodness quickly and efficiently. Unfortunately, Ghawar is not the only oil royal in critical condition.

The obituaries just keep rolling in. "Kuwaiti oil production from the world's second-largest field (Burgan) is 'exhausted' and falling after almost six decades of pumping" according to the chairman of the Kuwaiti state oil company. The L.A. times tells us that "Production at Cantarell, the world's second-largest oil complex, which provides about 60% of Mexico's crude, averaged 1.78 million barrels a day in 2006. That's a 13% drop from 2005." The famous North Sea basin and it gigantic Forties Field, the oil find that made Britain a petroleum exporter for the past 20 years, is about to experience a precipitous production decline. Back in 2000 we learned that China's only super-giant field, Da Qing was also at death's door. These fields and others like them provided the mother's milk, in the form of light sweet crude, which nourished the global capitalist system now enshrined and deified in American mass-culture.

In America we know all about big dreams and dead oil fields. Our East Texas field, discovered in the 1930's, gave us the energy we needed to forge ourselves as a superpower in the cauldron of WWII and it paved the way for the elaboration of the post WWII American dream: a car, a job, and a house in the suburbs for our returning troops. This version of the dream supposed the fact that East Texas oil was cheaper than water to be a permanent condition. This dream died in 1971 when the contiguous lower 48 states peaked as an oil province.

In all honesty, these old oil fields don't really die, they just fade away as their power to shape culture through increased production progressively, sometimes dramatically, diminishes. Interestingly enough, Anna Nicole Smith, a mere cultural artifact also destined to fade dramatically in a few more news cycles, was actually a person born Vickie Lynn Hogan in 1967 in Houston, Texas. This city is the heart and soul of America's and the world's fading oil industry. Before she was a celebrity queen she was a stripper and a waitress in a roughneck town who followed a dream.

When Anna Nicole's beautiful breasts are lowered into the ground, the event will subconsciously affirm and immortalize America's collective delusion; the belief that conspicuous consumption, in all its forms, can go on forever. While one queen of kitsch may have died, the dream of getting something for nothing, of recreational driving and super-sized eating, of perpetual entertainment, and of an idyllic future in the suburbs where one may realize the imperative of personal accumulation through gold-digging matrimony, will be renewed and confirmed. Those fake breasts nourish the fake dialectic which has colonized our collective consciousness. Our fraudulent, media-fueled, optimism will again, temporarily, pull the curtain over the reality behind the scenes and present us with a red, white and blue facade of tranquility.

Screaming "Ghawar is dead" and lighting a lantern in the daylight, confirms one 'certifiable' for most Americans. Peak oil is here now! Saying even this engenders looks of complete incomprehension among the masses! Peak oil means the death of the American dream embodied in those cold, dead, marvels of plasticity on Anna Nicole's chest. Hell, it means the end of plastic surgery! It means the end of economic growth and everything that entails. Our collective fake-life can't go on much longer after its real-life sources of nourishment dry up and become the ashes of history. It won't be long now until we realize that our world has come unplugged from the ancient sunlight that provides its artificial neon glow.

Matthew S. Miller, Ph.D ( MMiller33@ucok.edu) is a lecturer for the Department of Humanities and Philosophy at the University of Central Oklahoma.

found at  http://www.energybulletin.net/27024.html

The Ghawar Oil Field: How Much Is Left?
[Analysis] Decline of the world's largest reserve could cripple the global economy

David S. Elliott

Back in 2001, before the issue of energy scarcity ever entered my mind, I read a chilling online article called "Ghawar Is Dying" that bluntly speculated about the massive global upheavals modern industrial society would suffer if the largest oil field in Saudi Arabia were indeed running dry.

The article represented an eye-opening, paradigm-changing revelation for me, as I began to understand how very fragile the way of life that millions of people take for granted actually is. If access to abundant amounts of cheap oil were suddenly cut off, virtually every person living in the developed world would experience a precipitous drop in their standard of living, as most of the available creature comforts would disappear like a puff of smoke. After copiously researching the topic, discussions with friends and acquaintances became more and more strained as I realized that not only were they were just as clueless as I had been, but no one wanted to even contemplate the possibility of a decidedly grimmer future.

For those who don't know much about Ghawar, it is by far the largest conventional oil field in the world, measuring an estimated 175 miles by 20 miles (280km by 30 km). Currently, the huge field is said to produce between 4.5 and 5 million barrels of oil per day by outside observers, which is over 6 percent of global production. The officially stated maximum sustained crude production capacity is 8.5 million barrels per day, though actual output is a closely-guarded state secret. Thus far, approximately 60 billion barrels have been pumped out of Ghawar since production began back in 1951.

Noting that no oil fields approaching the size and capacity of Ghawar have been discovered since, noted energy analyst Jack Schaefer said in a recent online column, "The importance of Ghawar and other older giant fields to global oil production cannot be overstated." Ghawar's total proven reserves, or recoverable oil still left in the ground, have been pegged at just over 70 billion barrels by the Saudi Aramco, the nationalized oil company which is the largest of its type in the world.

The word "recoverable" is particularly important, as the gross amount of oil in the ground is less significant than the amount that can easily be harvested at a given level of extractive technology. While modern techniques can certainly boost the amount of oil that can be extracted per oil field, the question of how expensive the operation turns out to be remains extremely pertinent. Once oil extraction becomes too difficult, and therefore expensive, it becomes economically infeasible to attempt to remove the remaining supply.

In recent years, a number of prominent oil industry insiders have raised pointed questions about the stated proven reserves still remaining in Ghawar. Matthew Simmons, one of the world's leading energy experts, has very publicly declared that production from the huge oil field -- and Saudi Arabia as a whole -- has reached its highest peak and will likely decline in the coming years. He forcefully argues this point of view in his best-selling book, Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy.

Simmons is joined in his pessimistic stance regarding the global oil supply by other informed figures, such as well-known geologists Kenneth Deffeyes, author of Beyond Oil: The View from Hubbert's Peak, and Colin Campbell, who penned The Coming Oil Crisis and The End of Cheap Oil.

In addition, noted energy commentator James Howard Kunstler has continued to sound the alarm about what he views as an unsustainable American lifestyle. The suburbs draw particular ire from Kunstler, and he details his prediction of its coming collapse due to energy scarcity in his 2005 book, The Long Emergency: Surviving the End of the Oil Age, Climate Change, and Other Converging Catastrophes.

The namesake for Deffreyes' book, M. King Hubbert first promulgated the theory that would become known as "Peak Oil." Hubbert asserted that the graphical depiction of an oil field's production resembled a bell curve, meaning that once the point of peak production was reached, easily obtainable supplies would likely rapidly decline. Hubbert accurately forecast that production in the United States would peak in the late 1960's to early 1970's.

This prognosticated decline in U.S. oil production is no longer a matter of debate, but the amount of proven reserves in Saudi Arabia and some other Persian Gulf countries certainly is. In particular, industry observers have noted that reported reserves have, in many cases, remained the same over long periods of time although significant amounts of oil continue to be harvested. For example, Abu Dhabi, one of the United Arab Emirates, claimed reserves of 92.3 billion barrels from 1988 to 2004. However, during that time period approximately 14 billion barrels were extracted.

According to Schaefer,
"The 'official' reserve estimates are reported by government-owned oil companies and are often bloated to suit political and geopolitical interests. Fact is, many OPEC governments see their respective country's oil reserves as more political than geological. And they use the numbers as a way to add to the value of their 'stock' in the geopolitical market.

"No one's sure exactly how much more crude OPEC's oil fields still contain. But there's strong evidence to suggest the official oil reserve numbers put out by OPEC governments have been fudged on purpose... Back in 1989, Saudi Arabia claimed to be sitting on a total of 170 billion barrels of oil. But only a year later -- without the discovery of any major new oil fields -- the official reserve estimate somehow grew 51.2 percent to 257 billion barrels. Unbelievable indeed. One has to wonder exactly how any country increases its oil reserves by 87 billion barrels without finding any major new fields. In fact, there's no way they could."
Saudi Arabia comes under particular scrutiny because of its importance. It has long held the mantle as the world's largest producer of oil, and has acted as a "swing producer," increasing and reducing oil extraction rates to balance to the worldwide market in concert with the other nations in the Organization of Petroleum Exporting Countries (OPEC).

Not surprisingly, there was widespread concern -- even alarm -- over a 2005 report by a major bank which indicated that Ghawar had peaked. Analyst Don Coxe, working for the Bank of Montreal, became the first representative of a major financial institution to state unequivocally his belief that Ghawar was in irreversible decline. The Canadian bank analyst did not mince words: "The kingdom's decline rate will be among the world's fastest as this decade wanes... Most importantly, Hubbert's Peak must have arrived for Gharwar, the world's biggest oilfield."

Part of the "recoverable" oil equation concerns the methods used to increase an oil field's production. One of the most common ways of doing so is by injecting massive amounts of water, which has the effect of forcing deep-lying oil deposits to the surface where they can be harvested.

It is not a particularly good sign when a substantial amount of water is being used to "goose" production in a particular field. With consistent use of this technique, the volume of water that comes out along with the oil increases, while the amount of oil correspondingly decreases. Eventually, the yield contains mostly water, at which point the oil field is no longer worth operating.

Thus, it is indeed disquieting to note that the volume of water used to obtain Ghawar's oil has been steadily increasing. In fact, on a daily basis, an astounding 7 million barrels of seawater is being injected into the old oil reservoir to increase the oil flow. According to industry experts a few months ago Ghawar was producing 55 percent water -- in other words, more than half of the fluid brought to the surface was not oil.

In fact, a number of signs clearly indicate that Ghawar is in decline. Back in April 2006, a Saudi Aramco spokesman admitted that its mature fields are now declining at a rate of 8 percent per year. This, of course, implies that Ghawar may have peaked. The spokesman went on to say that measures were being taken to offset the decline, but that the only true solution to declining oil supplies is to locate new fields, and it is beyond debate that discoveries have not kept pace with growing global demand. Roughly 80 percent of oil being produced today is from fields discovered before 1973. Indeed, the discovery rate of multi-billion barrel fields has been declining since the 1940's; that of giant (500-million barrel) fields since the 1960's.

So, if Ghawar is confirmed to be in decline, it likely means that the entire world is as well. Of the four oil "super-giant" oil fields, three are officially in decline: Mexico's Cantarell, Russia's Samotlor, and Kuwait's Burgan. Though Ghawar has not "officially" been so declared, the implications of the facts noted above are clear.

The question of whether Ghawar's production is in permanent wane is of vital importance for the global industrial society, yet it has never been broached in a serious way by the mainstream media. To me, it is a very ominous development when such an issue can get shunted to the side, while useless celebrity gossip gets top the billing.

As Chip Haynes, the author of the first noted article, so eloquently puts it:
"So is the Ghawar dying? Does it matter? There may come a time when all the SUVs in Los Angeles will roll to a tank-dry halt. After the riots and the wars, after the yelling and screaming and dying, what's left of humanity (if we have any humanity left) will stand up, dust itself off and get on with Life. The Ghawar, virtually unknown today, will be all but forgotten by then. The troubles of Saudi Arabia and the Middle East will cease to be a common feature of the nightly news, as they would no longer have anything to offer the West -- nothing left to fight over. Just footnotes in a history book."

found at  http://english.ohmynews.com/articleview/article_view.asp?no=345366&rel_no=1

Saudi Oil Production Down 8 percent

Posted 2007/03/02 | By: Ryan McGreal

Almost a year ago, on a tip from Richard Gilbert, RTH picked up on a mostly-ignored report in Platts Oilgram News that Saudi Arabia was past its oil production peak.

Today, over at The Oil Drum, Stuart Staniford reports that Saudi Arabian oil production dropped eight percent last year.

Saudi Oil production, Jan 2006 - Jan 2007 (Source: The Oil Drum)
Some commentators - including most peak oil deniers - are arguing that OPEC's oil production dropped last year because they want to maintain high prices.

However, this flies in the face of OPEC's longstanding policy, which is to keep oil trading in the $20-35 dollar range - high enough to be profitable, low enough to price non-conventional oil out of the market, and moderate enough to encourage steady consumption growth of around two percent a year.

We learned reecently that oil production has been stalled at 84 million barrels a day for the past two years, and many buyers, especially in less developed countries, are simply being priced out of the market as sustained high prices destroy market demand.

We are certainly being lied to about Saudi Arabia's oil reserves - and the reserves of every other OPEC country as well. In the 1980s, when OPEC changed its rules so that countries could only export oil based on their reserves, every country's reserve estimates jumped.

In January 2006, a leaked internal memo found that Kuwait's oil reserves were only around 50 billion barrels instead of the 100 billion the Kuwaiti Oil Company had been claiming.

Similarly, we are being lied to about Saudi Arabia's continued ability to crank out millions of barrels a day. Saudi Aramco has been pumping seven million barrels of saltwater a day into its massive Ghawar field just to keep production flat, and the water cut is a significant, and growing, share of the total output.