
The Biggest Saudi Oil Field Is Fading Faster Than Anyone Guessed - jonbaer
https://www.bloomberg.com/news/articles/2019-04-02/saudi-aramco-reveals-sharp-output-drop-at-super-giant-oil-field
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lefstathiou
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.

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chrischen
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?

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vichu
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.

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govg
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 shifting, but there will not be any
long term drawbacks)

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nostrademons
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.

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credit_guy
Oil is not used in the production of fertilizers.

Here's a quote I found in [1]

"The macronutrients required by plants are N (Nitrogen), K (Potassium) and P
(Phosphorus). Oil is hydrocarbon, made from H (Hydrogen) and C (Carbon). There
are no plant nutrients in oil.

Nitrogen fertilizer (N) is made from ammonia, which in turn is manufactured
from natural gas, not oil"

[1] [http://peakoildebunked.blogspot.com/2005/08/28-isnt-
fertiliz...](http://peakoildebunked.blogspot.com/2005/08/28-isnt-fertilizer-
made-from-crude-oil.html)

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6nf
Less CO2 released into the atmosphere I guess?

I always wonder about news like this. Is it wrong to assume that the company
knew about this years ago already and made the rational decision not to tell
everyone until the last minute? And how long have they known?

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KorematsuFred
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 oil" sooner than the oil running our scenario. A particular
oil field is fading means really nothing because Saudi has far too many
unproven oil fields which it has not even bothered to explore yet. Now that
this field might be running out very soon they will explore that oil and soon
their production will grow up. The capital investment of discovery would
reflect in slightly higher oil prices may be.

Coming back to the CO2 emissions point you raised, even if the Oil in that Oil
field goes to zero in 1 year, it wont matter. There will be more supply
available soon enough. CO2 emissions will probably go down unrelated to Oil
production as developed countries move to electric cars and better power
plants fired by nuclear, solar and wind energy.

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saagarjha
> 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.

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KorematsuFred
> The point where we “run out” is when it is no longer economical to extract
> it from whatever deposit it’s in.

It is actually getting easier and easier to extract oil an not difficult.
Fracking is a great example. Earlier you needed thousands of wells working
round the clock these days you only need an area as big as a football field to
trap into a large reserve.

Your meta-point however is correct, it is not that Oil is going to run out but
better options and cheaper options will come into existence. Also this
probably will happen as a step change function and not something that can be
extrapolated.

Very likely fusion cells, battery cells etc. would become ridiculously cheaper
to the extent that many oil fields will stop being profitable and hence will
be closed down. That will be the time where "oil runs out" and in general a
great day for humanity.

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aliswe
I don't get it.

The article states that the Ghawar is "the world’s largest conventional oil
field", and "can produce a lot less than almost anyone believed", and is in
fact "able to pump a maximum of 3.8 million barrels a day -- well below the
more than 5 million that had become conventional wisdom in the market"

The saudi "12 million b/d capacity" was known from before, I assume, so isn't
the surprise that other fields make up a larger percentage than "guessed"?

Then how can it be "fading faster than almost anyone believed"?

And, isn't slower fading of their biggest reserve a good thing?

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foota
Maybe the issue is the production fading, rather than the reserves? Any amount
of oil in the ground doesn't do much for you if you can only extract it very
slowly.

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0815test
Generally extracting oil slowly is a good thing, it increases the total amount
you're able to pull out of the ground. Increasing immediate flow means having
to do things like pumping water into the field to increase pressure, and
getting an increasingly watered-down mixture back out. Things that involve a
pretty huge increase in complexity.

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mnm1
Good. The quicker it fades, the quicker the US can stop supporting this
brutal, vile regime and its disgusting human rights practices and culture.
Also, the more pressure there will be to switch to a non fossile fuel energy
source. It can't happen quickly enough.

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kbergqt
Well the US supports another vile regime and its disgusting human rights
practices and culture, namely Israel. The U.S. House of Representatives passed
a measure that would codify into law a $38 billion _aid package_ to Israel.
Clearly the US is about many things but ethics and human rights are only
fringe concerns, let’s not pretend that Saudi Arabia is their only shady ally.

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rat87
> Well the US supports another vile regime and its disgusting human rights
> practices and culture, namely Israel.

This is an incredibly stupid thing to say

edit:

This seems to be your only comment ???

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_khau
Why is it stupid to say Israel is guilty of human rights abuses?

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benj111
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.

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Someone
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 keep oil prices low.

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benj111
I don't get what you're disagreeing with me about?

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Someone
_”higher prices, which is something they 'd want to maximise.”_

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benj111
Yes... You maximise money, by maximising prices (for some value of maximise).

I'm not saying they should be aiming for $1 million / barrel. But clearly $60
is better than $50, assuming that doesn't lower volume.

We seem to agree on that?

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benj111
So this is the bond prospectus that's replacing the planned float of Aramco?

Wasn't the plan basically to divest/diversify away from oil. This doesn't seem
to be doing that, so what's the point?

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browsercoin2019
wow this is quite shocking! this means that we have reached peak oil quite
possibly some time ago....OR for the cynical, the Saudi might be trying to
pull a fast one by inflating the prices through scarcity...but that seems
unlikely here.

What's more curious is that the US reported it as 5.7million barrels in 2004!

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senectus1
so when the Saudi start realising their spigot of unlimited money is starting
to run out, i wonder how they'll behave.

My bet is, invasion forces. I can hope though that they'll push for space
industry

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kgc
They might IPO their oil industry and diversify.

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jeanlucas
They are doing this, but using private investments. From solar to wave they're
investing in energy, but also in lots of other investments.

