Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy Info

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Twilight in the Desert reveals a Saudi oil and production
industry that could soon approach a serious, irreversible decline. In
this exhaustively researched book, veteran oil industry analyst Matthew
Simmons draws on his three-plus decades of insider experience and more
than 200 independently produced reports about Saudi petroleum resources
and production operations. He uncovers a story about Saudi
Arabia’s troubled oil industry, not to mention its political and
societal instability, which differs sharply from the globally accepted
Saudi version. It’s a story that is provocative and disturbing,
based on undeniable facts, but until now never told in its entirety.
Twilight in the Desert answers all readers’ questions about Saudi
oil and production industries with keen examination instead of
unsubstantiated posturing, and takes its place as one of the most
important books of this still-young century.

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Reviews for Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy:

1

August 4, 2005

Book is a waste of time
This book's central conclusion misses the point entirely and the claim the the world is running out of oil is demonstrably false. While in specific cases and locations it is certainly true, indeed, even without the author's work, it would stand as patently obvious, that all currently exploited oil fields are being exhausted at some rate or another, the implications for the general picture are extremely limited. Specifically, all natural resources have an extraction cost, and as the most abundant sources are used, greater effort, and hence cost (at least in absolute terms) are required to extract these resources. What this means is that as the large, relatively easily extracted sources of oil (or any resource for that matter) are depleted, replacement sources requiring greater effort and investment (cost) will be developed. This cost is then passed along in the commodity price. This is the key.

As easily extracted sources are depleted, costs will rise until one of two things will happen. Either greater prices enable the extraction from more marginally profitable (at todays prices) sources, thus maintaining the suppply, or rising prices will cause other sources of (in this case) energy to achieve a relative pricing advantage over oil and, hence, replace them in lower value uses (think kerosene heaters and lawnmowers) at first, and as prices continue to rise, in progessivley higher value uses (think automobiles, and at the extreme end jet aircraft fuel). Put succintly, when oil becomes more expensive than, say, solar power to heat your home, solar power will take over this function and relieve the demand.

What this all means in the end is that, hard though this may be to believe (conditioned as we have been by pessimistic scenarios), that the world will ALWAYS produce all the oil we want, but that changes in price will moderate our appetite. The only real risk to equilibrium is, as usual, governments; specifically governments which seek to intervene (with the best humanitarian motives, of course) in the free float of oil prices either by subsidizing the cost to purchase or artificially underwriting the investment in extraction.

If it seems that this commentary is made with the sort of confidence more appropriate to a statment of historical record than to a prediction of the future on a relatively complex matter, it is because this IS a matter of historical fact, or at the minimum extremely compelling historical analog. This very same prediction, based on very similar reasoning, was made over 200 years ago Thomas Malthus for other natural resources (it is from him that we have the term malthusian to describe irrationally bleak predictions). What both Mr. Malthus and Mr. Simmons have both appearently failed to grasp is the extraction and consumption of natural resources do not take place in a vaccuum; the aggregate demand for a resource will dramatically effect the extent of the efforts made to extract it (and hence it's supply) and the degree of effort required to extract it (and hence it's price) will just as, or perhaps more, greatly effect the aggregate demand for it. It is not arrogant to correctly account for the effect of the human race's considerable creative talents at both finding more of anything and finding alternatives to anything, on the contrary, it is the height of arrogance for any man, irrespective of the extent of his research, to presume to know what the human race has not yet discovered.
1

June 17, 2005

Lies, damn lies, and statistics.
Simmons is a delusional wacko. Next thing we'll hear is that there really are little green men from Mars. Only the most gullible would believe this nonsense.

The world is awash in oil. The only thing that has changed is that all the cheap oil is gone. We may have to spend more to find it, extract it and refine it, but that's a normal progression. What about the oil sands? More reserves in Canada than all of OPEC combined. And then we have the oil shales, the heavy oil deposits in Ven, etc etc. And then we have vast reserves of coal and natural gas, all of which can be readily used as fuel.

Use your brain. Ignore this blantant nonsense.
1

November 19, 2005

Banker tortures translation of technical papers
Mr. Simmons investigation of the Saudi hydrocarbon reserve issue is warranted and desirable. His ability to rewrite others' conclusions into understandable terms is far from effortless. He has a firm grasp of extending the number of pages within his book by prolonged repetition.

If you cross out every last sentence in every paragraph, this is where Mr. Simmons has added some far fetched, irrelevant, or completely contradicting conclusion, and if you can concentrate on the poorly translated technical issues within the body of the paragraph you may be pleased with the information you have gained. But then you may wonder if you couldn't have received the same information in 50 pages or less.
4

August 6, 2005

The Twilight of Saudi Oil is Fast Approaching
Almost everyone will agree that oil is a nonrenewable resource. I say almost because there is a small clique that believes that petroleum will indefinitely ooze up from the earth's core, but that's another matter. In the known world there are a finite number of proven reserves, and Saudi Arabia is believed to possess the largest number of these reserves - some 250 billion barrels or a quarter of the world's total. And, to their credit, the Saudis have always been very reliable and responsible producers: when there were global shortages, they could always be counted on to alleviate the shortages by producing more oil.

Therein lies the problem according to Matthew Simmons, investment banker and oil industry analyst. In his new book,"Twilight in the Desert," he explains why increasing production to avert supply disruptions diminishes the reserves' long-term productive capacity. To keep up with soaring demand, the Saudis have been using a variety of methods the increase well pressure - such as pumping water into wells. This boosts production temporarily, but it leaves far more of the oil unrecoverable than if it were extracted at a steady and lower rate.

The fact that the Saudis are using these methods on all of their seven largest fields indicates that their production is peaking or beyond the peak - a claim which they deny. Truth be told, most of the major Saudi fields (Ghawar, Safaniya, Abquaiq, Berri, Zuluf, and Marjan) were developed 40 to 50 years ago, and no sizeable field has been discovered since 1967 (Hatwah). In 1988, the Saudis claimed that they still had 250 billion barrels in reserve and now - 50 billion barrels later - they still claim to have 250 billion barrels in reserve. Something is amiss. True, calculating reserves is an inexact science, but what troubles Simmons is that the Saudis never allow third party verification.

The world's petroleum requirement in 2001 was 77 million barrels per day, by 2025 it will be 121 million barrels a day, a net increase of 44 million barrels a day. Of this increase, the Saudis are projected to supply one-fourth, roughly 12 million more barrels per day than they are producting now. Simmons sees the chances of this happening as very slim, since 90 percent of all the oil Saudi Arabia has ever produced came from the seven giant fields. These fields are now mature and diminishing after have been injected with massive amounts of water over the decades.

Unfortunately, America's entire energy strategy is based on the Saudis meeting their projections in the years ahead. Simmon's view is a minority view, but it it is based on technical papers available from the online library of the Society of Petroleum Engineers. He makes a convincing argument that the future costs of securing oil will increase significantly. Not only the costs of more intensive recovery efforts, but also costs associated with military operations to secure resources and the costs of the ecological degradation of burning 77 million barrels of oil per day. This book is an important addition to the growing chorus of voices calling for energy conservation and the urgent need to find alternative sources of energy.
1

October 29, 2005

Disappointed
I was so looking forward to this book hoping to get a true insight of the oil industry, but unfortunately just came away disappointed.

All I got from Mr. Simmons is that:

The Saudis are liars...the Saudis rely on 5 or 6 fields for all their oil...the Saudis can produce this oil at obscene low prices...The Saudis will run out of oil...

So what Mr. Simmons!! Isn't that the primary reason other production hasn't come on line?

How many thousands of oil wells have been shut down because they couldn't hope to profit with oil at $1.00, $2.00, $10.00, $20.00 or even $30.00 a barrel with all this cheaper oil on line?

How many thousands of these oil wells will come back on line with $60.00 barrel oil? How much oil can be produced from oil sands at $60.00? How about oil shale? No where does Mr. Simmons address these issues, why??

It seems that Mr. Simmons has sold out to the end of the world crowd.
2

June 19, 2006

I was not too impressed
I am an Oil professional - 30 years in drilling and production. This book is very timely - we are running out of oil - All the major oilfields are in decline. New (significant) oilfields are not being found. As this progresses it will be a very big change of life.

The author repeats and repeats the same ideas with few facts. Saudi keeps it technical information private. I was disappointed with this book. :(
3

August 15, 2008

Well researched, but fails to "connect the dots"
Mr. Simmons' purpose in writing this book was to assess how long Saudi Arabia will be able to sustain its present rate of oil production. His assessment required extensive detective work as well as "reading between the lines" of Saudi Arabia's official statements because the Saudi's are highly secretive about their oil fields and they do not make any of their production data available to the public. Mr. Simmons concluded that Saudi Arabia will not be able to sustain its current production rates much longer and will soon enter a period of rapid decline.

Mr. Simmons' thesis is that conditions experienced at individual oil wells can be extrapolated to determine the level of depletion of the entire oil field in which the wells are located. As background, Mr. Simmons used old, but comprehensive, data on Saudi oil fields that were compiled prior to when Saudi Arabia nationalized its oil industry. This data establishes which Saudi oil fields are the largest and most productive. Mr. Simmons then analyzed more recent papers written on individual wells within the most important Saudi oil fields to see if these wells were exibiting signs consistent with oil field depletion. For example, oil wells with problems such as "gas caps" or "high water cuts" can be an indication that the entire oil field is in an advanced state of depletion. Mr. Simmons concluded that problems indicative of depletion are occurring at wells in Saudi's most productive oil fields. Mr. Simmons also noted that production increases at smaller fields and the development of newly discovered fields have been barely sufficient to offset the declines at the older fields.

Mr. Simmons is a formidable researcher, but his writing skills leave something to be desired. Rather than condense the complex technical information into coherent conclusions, he simply repeats the same facts over and over, apparently hoping that the reader will "connect the dots" for himself. Because of this, I probably missed many of the points Mr. Simmons was trying to make. Better organization and summary of the complex material could have made the book half as long as twice as understandable.
5

November 25, 2005

Trying to bring light to a mystery
"Twilight in the desert" comes at an opportune moment: oil demand has finally matched oil supply, and moderate prices will continue only with substantial increases in oil supply (or reductions in demand). Matthew Simmons, an investment banker turned geologist, has written this book to question the torrent of assumptions that the oil industry makes about Saudi Arabia, and argue that there is plenty reason to be skeptical about Saudi Arabia's geological capacity to increase production to 16.3 or 18.2 mbd, which is what the EIA and IEA project for the years 2025 and 2030 respectively.

The book offers the requisite background for the layman to understand the history, context and structure of the Saudi oil industry (his technical notes on oil production are welcoming too). Mr. Simmons weaves together a case from the mystery that surrounds oil in Saudi Arabia-mystery about the quantity of reserves, about production levels, about the true geological condition of the wells. Mr. Simmons scanned over 200 papers published under the Society of Petroleum Engineers that chronicle the problems engineers have faced in Saudi wells-problems that are due to the fields' old age and which prelude a future decline in productivity.

There is little chance that any reader will walk away from this book with more answers than questions. But Mr. Simmons deserves credit for shedding light into a mystery-and the debate that has followed the publication bears testament both to the quality of the work as well as to its necessity. Whether there will come an oil shock made in Saudi Arabia is impossible to forecast; but if it does, the reason will have been well explained in "Twilight in the desert."
5

February 2, 2007

Detailed information
There are two groups of investors, those that think oil has peaked, and will be in shorter supply in the future, and those who think oil is abundant, and a poor investment. Only one group is going to be right, and they can profit from their information. This book will give you a much better understanding of some of the facts. Simmons goes in depth explaining the development and decline of the Saudi fields, almost field by field. He explains how fields can be damaged, and the problems of recovering oil. This book is essential for any energy investor.
4

August 17, 2009

An informed view
I've been analysing global oil supply trends since the 1980s, and have had work published by the OPEC cartel, so I'd like to provide a balanced assessment of Matthew Simmons' views, and some of the debates behind the issue.

Essentially, Simmons believes that the giant Al Ghawar field is in terminal decline, and that this event will evolve Peak Oil from theory to fact. Al Ghawar is undoubtedly critical - it is a huge field, but an old one, discovered in the late 1940s and on stream since the early 1950s. Until recently, it has contributed about half - around 5 mmb/d - of all Saudi production. If it does indeed decline, is this a major event? And is it declining?

The Saudi oil industry is shrouded in state-enforced secrecy, but the answer to the second question seems to be a pretty unequivocal "yes". Saudi Aramco has conceded that it now injects more than 7 mmb/d of treated seawater into Al Ghawar. This is, by any standards, a huge water-injection programme. Water injection is a secondary recovery technique designed to bolster flow-rates by buttressing reservoir pressure. It's a generalisation, but an acceptable one, that this process is used on fields whose production would otherwise be in a rapid decline.

Is the decline of Al Ghawar a major event? Again, yes. Global discovery rates have been falling since the 1960s. The history of published reserves numbers from many countries displays some suspicious upwards revisions, and often seem to fail to deduct produced volumes. One of the great hopes for new reserves - the Caspian - has fallen far short of initial expectations.

But one needs to bear two things in mind here:

1. "Proved reserves" are not a statement of pure geology - rather, they are a matrix of economics (prices, costs, rates of return) applied to geological knowledge.

2. How do we define "oil"? "Conventional" oil - light sweet crude, produced easily - has been in decline for a long time, but is being displaced by unconventionals, such as gas-liquids, heavy crudes and oil produced from difficult fields ("difficult" either geographically or geologically).

Unconventional sources are, potentially, huge - in North America alone, Canada has perhaps 200 bn bbls of oil sands, whilst the US has vast reserves of shale oil. The snag is that delivery rates - rates of production as a percentage of reserves - are far lower than for conventional oils.

Then there's the price mechanism - scarcity drives prices up, which both (a) deters consumption, and (b) incentives exploration and development.

Of course, you can't find or develop oil which isn't there. I believe that reserves remain huge, but that rates of production may provide insurmountable problems. "Peak Oil", in the sense that production goes into gradual decline, may occur within the next decade.

The influential Hersch Report contended that such a peak is likely, that we will get very little advance warning, and that it is very unwise not to undertake contingency planning and action. To ignore this call would surely be folly.

The truth about Peak Oil is that no-one really knows, but that its implications could be so huge that we need to prepare for it.

It is in his raising of the public profile of this issue that respected analyst Matthew Simmons has, in this seminal work, performed a great service. Every concerned person should read this book.
5

October 14, 2006

Outstanding
Let me cut to the chase and say that this book is simply outstanding. Why?

1. Rarely does one see a topic so thoroughly researched by someone who is already an expert in the field. Simmons had already spent the bulk of his career in the energy business. He decided to conduct extensive, quality research to shape his hypotheses and conclusions. Any student of research methods would benefit from understanding how this book was crafted.

2. Having such a data-driven body of knowledge means that the discussions surrounding peak oil, environmentalism, conservation, and geopolitics (perhaps the term should be geopetroleopolitics?) can be based on some semblance of fact, not rhetoric. Saudi oil fields are declining. This is a fact. We don not have good data to project when these declines will become irreversible. This is also a fact. How we react to these facts as individuals, as a nation, and as a planet, is vitally important. Simmons has crafted the foundations upon which these discussions can be conducted.

I do have some minor quibbles about the book. The index could be a bit better. Some of the technical terminology could have been defined in the text a bit better with footnotes. Some terms are used early, but not defined until much later. Again, I think these are minor points.

I highly recommend this book.
1

April 5, 2012

Fails the test of time
According to this book, the US should have experienced widespread natural gas shortages years ago.

Instead, we have a glut of natural gas. Natural gas is cheaper here than anywhere else in the world.

What else do you need to know? This book is full of predictions. Almost none of them have withstood the test of time. The natural gas shortage-to-glut is the most prominent of these, but not the only one.
2

December 20, 2007

Twighlight in the Desert
The book gets some of the technical facts on the oil recovery process incorrect. I know becuase I am in that business. The book is very repetitive.
1

August 27, 2006

Saudi Oil
A great deal of technical information that was a little overpowering at times. Never the less it makes it's case compellingly and logically.
3

November 30, 2007

Correct conclusion, suspect analysis
Matthew covers an important premis - Saudi oil reserves are lower than we think. He may be, and probably is spot on the mark with this conclusion. However he has based his conclusion from reading 200 SPE papers on Saudi production. Whilst other sources of information are admittedly hard to come by, SPE papers are not an unbiased source of information. Invariably they set out to demonstrate a technical problem and how ingenious the authors were at solving these problems. So to conclude that Saudi production is beset by technical problems because there are so many papers written on the subject is invalid. Dull, incesant, problem free production does not make a good technical paper! That said, the conclusions on why reserves are pushed up for political means is spot on (in my experience) and his overall conclusions are probably quite valid - and important.
3

November 20, 2006

This book is a great effort to make the general public aware of the influence of Saudi oil on global growth; however misleading.
I found this book to be great as an basic introduction to the world of Saudi oil supply. Matthew Simmons does a great job at conveying the problems that Saudi Arabia MAY currently have with sustainable oil production. However, I found his book to be very repetative and single-sided. Simmons, a financial analyst, understands the basics of reserves estimation, but the finer details of oil recovery elude him. In addition, Simmons does not consider the vast supplies of oil sands in Canada (proven oil reserve second only to Saudi Arabia) when he suggests future sources of oil supply. As a petroelum geologist, I appreciate Simmons' attempt to build the Saudi reserve picture from the bricks of the SPE (Society of Petroleum Engineers) archives; although he is extremely narrow-minded in his approach.
3

Oct 03, 2014

The "peak oil" theory holds that the world is running out of oil resources, production soon will begin a precipitous decline, and terrible consequences will result. This theory has been advanced every few years since at least the early 1950s. However, the predicted catastrophe never comes to pass.

This book, published in 2005, represents perhaps the most recent iteration of this theory. The author exhaustively demonstrates that the small number of very large oil fields on which Saudi Arabia's oil The "peak oil" theory holds that the world is running out of oil resources, production soon will begin a precipitous decline, and terrible consequences will result. This theory has been advanced every few years since at least the early 1950s. However, the predicted catastrophe never comes to pass.

This book, published in 2005, represents perhaps the most recent iteration of this theory. The author exhaustively demonstrates that the small number of very large oil fields on which Saudi Arabia's oil industry is based are aging, new fields are not being found, and that Saudi Arabia's ability to act as the world's "reserve producer" of oil may soon come to an end.

At the same time, the author completely missed the boom in hydrological fracturing, or "fracking," and horizontal drilling which was gathering force just as this book was published. Indeed, the only mention of these techniques in Twilight in the Desert comes in the context of criticizing Saudi Arabia for misusing these technologies to boost production at existing fields, and thereby risk even greater harm to the fields' long-term productive capacity. The author completely missed the significance of these techniques as a way to get oil out of "tight" formations that previously were unavailable for production.

Today, of course, fracking and horizontal drilling have triggered on ongoing boom in drilling and production that shows no sign of ending. People no longer talk about peak oil, and even such notable opponents of the oil industry as Barack Obama cite this boom as being able to alter world politics, and in a good way. (And, of course, Obama tries to take credit for it, though he has done nothing to help.)

So far as I know, Twilight in the Desert paints an accurate picture of problems in the Saudi oil fields, and production in Saudi Arabia may begin to decline because of those problems. By completely missing the boat on fracking and horizontal drilling, however, the author fatally marred his argument. The world is not running out of oil, at least not yet, and the policy prescriptions that might be appropriate for a world with inadequate oil supplies would be a disaster for the world we actually live in. Trends in the production and consumption of petroleum - and other resources for that matter - deserve careful attention. But the Chicken Littles should be sent home, rather than being allowed to roost where they can do harm. ...more
5

October 24, 2008

Must read (along with Boone Pickens recent book) for anyone who spends indecent money on oil
If you're the type of person who likes to know how things work, this book will clearly be one of the most interesting books you'll read. Before reading this book, I'd just fill up at the pump and go...never really think about how the oil got to the gas station. Most Americans take this step for granted. Next time you're on the highway though, look around, and really think about all the people driving--just like you--and try to imagine how so much oil could be taken out of the ground now and in the past several decades to satisfy all the drivers out there---truly amazing. Matthew Simmons goes thorough this process--step by step--of how people tirelessly explore for oil, extract it--now with great technical difficulty, and process it. You will not look at the world in the same way after reading this book.

As Matthew Simmons points out here, the world's largest oil fields in Saudi Arabia (and other major oil exporting countries) have matured, and it is increasingly technically difficult and expensive to extract oil from the elephant fields there. We are probably nearing a time of historical importance--a time when the easy oil has been extracted--and only expensive oil remains in the ground for future use. The ramifications of this theory are immense--especially considering how growth in the Chinese and Indian economies could fuel increases in oil demand in the near future. Unfortunately, Simmons offers few practical solutions for dealing with the ramifications of his theory. Rather, T. Boone Pickens comes to the rescue on this point with his "Picken's Plan"--as described in his book "The First Billion is the Hardest." Picken's book is highly recommended after reading Twighlight in the Desert. Let us pray our politicians head the warnings of these two prescient authors.
3

April 18, 2008

Twilight, but not yet!
This book is well written, with a lot of research....however, I do not completely agree with the author's conclusions. A book on Peak Oil. Well worth reading, but the author does not take into account the progress of technology and its significance in extracting the precious oil from the ground.
Many people do not understand that oil fields left behind by oil companies still retain a great deal of the original estimates locked within its stone. The problem is that it becomes too expensive to extract for use in the economy. That will change. Further, the US has enough oil shale to rival the largest fields in the world....additionally, the US has its own tar sands that few know about. For that matter, Russia owns two large tar sands regions within its borders. Then there is the most recent, unconfirmed, find from Petrobras off-shore of Brazil that is reputed to have ~33 billion barrels of reserves......although this remains to be proven. But it does not discount the Tupi field of the Brazilians, who are about to become major oil exporters in the next several years.
If you just take "conventional" oil and current "conventional" extraction methods, his book has a lot of credence....however, things never remain static and companies are investing large sums of money to find new ways of extracting oil from known fields that are dormant.
Good book, worth reading, but should be read in conjunction with opposing viewpoints as well.
4

Apr 16, 2012

As a petroleum geologist, I have long known that oilfields have finite lives. They perform very well in their youth, then limp along for years and years of middle and old age. I also knew how the number of very large fields was small, while modest ones were more common.

Matthew Simmons does an excellent job of explaining these facts, and even goes into the basics of petroleum engineering in an easy to understand manner. He then sets out like an investigative reporter going through years and years As a petroleum geologist, I have long known that oilfields have finite lives. They perform very well in their youth, then limp along for years and years of middle and old age. I also knew how the number of very large fields was small, while modest ones were more common.

Matthew Simmons does an excellent job of explaining these facts, and even goes into the basics of petroleum engineering in an easy to understand manner. He then sets out like an investigative reporter going through years and years of articles published by Aramco employees in engineering and scientific journals to uncover the true story on the performance and reserves situation of the few large Middle Eastern oil fields the world depends on. The book offers a very compelling case, and contains a number of useful maps. However, the the book is somewhat outdated. Mr. Simmons has underestimated the impact of new technologies which today are making marginal reservoirs viable. We see these technologies at work in the gas and oil shale boom in the United States.

Twilight in the Desert is a good read for anyone interested in the world economy, alternative energy, or environmental issues. ...more
5

July 16, 2006

Important book, and who will author Plan B?
Simmons ironically invokes "Plan B" as the term to mean, "What will we do when twilight comes and Middle Eastern oil runs out?" He believes that if we use our brains the world can avoid economic catastrophe and that middle class democracies can survive. Since oil is woven into every part of our lives, especially transportation and food production, the lack of oil will upset nearly everthing we now take for granted. Hence, the need for a "Plan B."

We do not have much time to figure out Plan B. Because changing to other forms of energy will cost a great deal of money in a very short time, the effect of Plan B will be enormous, complex, and will affect the lives of every person on this planet.

One is left, then, with a question, along the lines of exactly how, and who, will author this Plan B? Since Simmons' book is so thoughtfully well written, I hope that he will write a follow-on volume that adds his insight to the logical question which he raises in Twilight in the Desert.
5

November 22, 2017

Five Stars
A good book though dated. Written before fracking changed much of the predictions.
4

December 7, 2011

OUR LEADERS HAVE FAILED US
Mr Matt Simmons has written a superb book. I have been interested in oil for only the last 4 years, I remember the oil spike in the first half of 2008. I will never forget watching petrol prices go up 2 cents a litre every week for those 6 months, thinking that the world had reached peak oil. Now, in December 2011, I realise that the world has not peaked yet, but we are very close. Conventional oil peaked in 2005-2007, depending on whose statistics you look at & the GFC bought us some time, after all oil demand does drop during recessions. We are now more & more reliant on non-conventional oil sources such as deep water & tar sands. My research tells me that we will reach peak oil in 2011-2014, assuming no recession.

Mr Simmons book was predominantly researched in 2004, however his findings are more relevant today than 7 years ago. This book predominantly takes a look at Saudi Arabia's oil exploration & production history & the likelihood of increased/plateaued oil production in the future. Mr Simmons takes a deep look into the Society of Petroleum Engineers (SPE) technical reports on Saudi Arabia. Putting it simply, Saudi Arabia has a handful of super giants & giants, namely: Ghawar, Abqaiq, Safaniya, Berri, Marjan, Zuluf & Shaybah. All of these fields started producing in the 40s, 50s & 60s except for Shaybah whose oil production started in 1998. These are old, tired & ever maturing fields. All of these oil fields were discovered a long time ago & the last major oil discovery was Shaybah in 1967. Saudi Arabia has already reached peak oil in 1981, however this was an artificial peak as Saudi Arabia was acting "responsibly" during the Iranian revolution & the beginning of the Iraq-Iran war by increasing production to make up for the shortages from these nations. Iran peaked in oil production in 1978 at 6 million barrels a day & is now only producing 3-3.5 million barrels a day.

Mr Simmons goes deeply into the process of oil production & how important it is to retain pressure in the fields to keep from the fields peaking prematurely. The author also goes into detail about the decision to either maximise the ultimate recovery of the reserves versus maximising return on investment from the field, which is usually not aligned together. Mr Simmons also explains why the artificial increase in production during 1979-1981, may have caused irreversible damage to the oil fields that will never be known. Mr Simmons also discusses Saudi Aramco's ambitious & over optimistic claims that they can in the near future produce 15 million barrels a day & maintain this output for 50 years. Mr Simmons also goes into other super giant & giant oil fields around the world & how they declined.

The University of Kuwait came up with an analysis of global oil production in 2010 projecting that OPEC production will not peak until 2026. I believe this to be unrealistic. Venezuela peaked in 1998, Indonesia 1977, Iran 1978, Algeria & Kuwait are now in decline & there is political turmoil in Libya & Iraq.

It seems to me after reading this book that Saudi Arabia may get to 12 million barrels a day of production, if it is lucky, however maintaining today's high level of around 8.4 million barrels a day, let alone reaching 12 million barrels a day, for years or decades to come will be a tall order.

Mr Simmons ends the book with possible solutions that are all logical including conservation, local food production & consumption, liberating the workforce & curtailing globalisation. Some people have labeled Mr Simmons as a doomsayer, however he is making a completely logical argument & offering solutions, so I find this label ridiculous. I, however believe that it is too late. We should of been making these decisions & transitioning to other sources of energy with a lead time of at least 20 years. History has shown that it takes more or less 40 years to completely transition from one energy source to another, a gradual process that requires a lead time. The stone age did not end because we ran out of stones, the bronze age did not end because we ran out of bronze, however the oil age will end & it is most likely it will bring our industrial civilisation down with it. We are hopelessly unprepared.

I highly recommend this book if this topic interests you & in particular if you would like to learn what is involved in exploring for & producing oil. Mr Simmons has done an incredible job of explaining these concepts to the layman. If Mr Simmons was still alive today, I would thank him for his contribution in this field.
2

January 21, 2015

Repetitive and outdated information
This book was written 10 years ago based on even older data and interpretation of technical papers generally written by service companies who tout their services through these papers guised as facts. Although I agree with the author that Saudi Arabia's super giants are aging and depleting there was no need to go on about it ad nauseum. The book was also poorly organized in my opinion. The author was right that oil prices did indeed increase but not quite to the level speculated.
3

August 24, 2014

Even smart people can be wrong
This book is highly technical. It was very good as a primer on the history of oil recovery technology. However, the prognostications in the book have turned out to be pretty much wrong. It shows how wrong respected experts can be when it comes to predicting future events. All current doom and gloomers should think about this before succumbing to present day harbingers of impending disaster.

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