P E A K    O I L

Hubbert's Peak in the 21st Century

The same methods that M. King Hubbert used to predict the 1970's peak in US oil production now show that a peak in world oil production is less than five years away. A major crisis in world oil supply will probably happen on a shorter time scale than conservation measures or alternative energy sources can be implemented.
January, 2005 - Kenneth S. Deffeyes; Professor Emeritus at Princeton University.
 

World oil production will start to fall sometime during this decade*, never to rise again. In 1956, M. King Hubbert predicted that U.S. oil production would peak in the early 1970's. Although Hubbert was widely criticized by some oil experts and economists, in 1971 Hubbert's prediction came true. The 100 year period when most of the world's oil is being discovered became known as "Hubbert's Peak." The peak stands in contrast to the hundreds of millions of years the oil deposits took to form. Hubbert's methods predict a peak in world oil production less than five years away.*

Ordinarily, we look to new technology for solutions to problems. Until recently, the oil industry enjoyed a higher rate of return on invested capital than any other industry. Historically, the most rewarding use of the profit was investing it into developing better ways of finding oil. As a result, the origin, trapping, exploration, and production of oil became advanced fields of knowledge. We cannot benefit today from reinventing those wheels.

There are long-term solutions to our future energy problems: conservation and both fossil and renewable energy sources. Unfortunately, large-scale implementation of these solutions requires more than five years and the industrialized nations have done little to address the short-term problem.

The present chaos in energy prices may, in fact, be the leading edge of an even more serious crisis. We all have to place our bets; doing nothing is equivalent to betting against Hubbert. *Quote from2001

Below is an introduction to a book called "The Oil Age is Over" by Matt Savinar.  While he is not a widely recognized scholar like Professor Jeffries; his book discusses some chilling scenarios concerning mass population reduction throughout the world as a sharp rise in oil prices due to a shrinking supply would sharply reduce mass food production leading to widespread starvation.

Civilization as we know it is coming to an end soon. This is not the wacky proclamation of a doomsday cult, or a conspiracy theory society. Rather, it is the scientific conclusion of the best paid, most widely-respected geologists, physicists, and investment bankers in the world. These are rational, professional, conservative individuals who are absolutely terrified by a phenomenon known as global Peak Oil.

The ramifications of Peak Oil are so serious, one of George W. Bush’s energy advisors, investment banker Matthew Simmons has stated; the situation is desperate. This is the world’s biggest serious question, while comparing the crisis to the perfect storm: If you read The Perfect Storm, where a freak storm materializes out of the convergence of three weather systems, our energy crisis results from the same phenomenon.

Simmons investment bank, Simmons and Company International, is considered the most reputable and reliable energy investment bank in the world.

 Given Simmons background and reputation, what he has to say about the situation is truly terrifying.

For instance, in an August 2003 interview with From the Wilderness publisher Michael Ruppert, Simmons was asked if it was time for Peak Oil to become part of the public policy debate. He responded; it is past time. As I have said, the experts and politicians have no Plan B to fall back on. If energy peaks, particularly while 5 of the world’s 6.5 billion people have little or no use of modern energy, it will be a tremendous jolt to our economic well-being and to our health greater than anyone could ever imagine.

When asked if there is a solution to the impending natural gas crisis, Simmons responded; I don’t think there is one. The solution is to pray. Under the best of circumstances, if all prayers are answered there will be no crisis for maybe two years. After that it’s a certainty.

In May 2004, Simmons explained that in order for demand to be appropriately controlled, the price of oil would have to reach $182 per barrel. With oil prices at $182 per barrel, gas prices would likely rise to $7.00 per gallon.  

If you want to ponder just how devastating oil prices in the $180 range will be for the US economy, consider the fact that one of Osama Bin-Laden’s goals has been to force oil prices to $200 per barrel.

Simmons has been sounding the alarm for years. For a while, he was a lone "voice in the wilderness." In the past year or so, however, many experts have begun echoing his sentiments. Ali Samsam Bakhtiari, the vice-president of the Iranian National Oil Company has stated; the crisis is very, very near. World War III has started. It has already affected every single citizen of the Middle East. Soon it will spill over to affect every single citizen of the world.

On a similar note, the respected Washington-based consulting firm PFC Energy Group recently released a report predicting a coming "energy doomsday."

Say what you will about George W. Bush, he has been very open with the American people about this particular issue. In May 2001, George W. Bush went on the record as saying; what people need to hear loud and clear is that we’re running out of energy in America.

Vice-President Cheney publicly acknowledged the reality of Peak Oil in 1999 when he stated: By some estimates, there will be an average two-percent annual growth in global energy demand over the years ahead, along with, conservatively, a three percent natural decline in production from existing reserves.

That means that by 2010 we will need on the order of an additional 50 million barrels per day.

The oil-producing nations of the world are currently pumping at full capacity yet they are only producing 82.5 million barrels per day. Raising production by 50 million barrels per day is essentially impossible. Cheney's remarks were thus a tacit admission of the severity and imminence of the peak.

Executives from Big Oil have publicly acknowledged the scope of the coming crisis as well. In 2003, Exxon Mobil president Jon Thompson stated:

By 2015, we will need to find, develop, and produce a volume of new oil and gas that is equivalent to eight out of every 10 barrels being produced today. In addition, the cost associated with providing this additional oil and gas is expected to be considerably more than what the industry is now spending.

Equally daunting is the fact that many of the most promising prospects are far from major markets - some in regions that lack even basic infrastructure. Others are in extreme climates, such as the Arctic, that present extraordinary technical challenges.

The Saudi's have a saying about the situation; "My father rode a camel. I drive a car. My son flies a jet airplane. His son will ride a camel."

Former UK Environmental Minister Michael Meacher was equally frank, when he stated, "It is hard to envisage the effects of a radically reduced oil supply on a modern economy or society."

Put simply, anytime investment bankers, consulting firms, executives from "Big Oil," V.P. Cheney, George W. Bush, officials from OPEC nations, Osama Bin Laden, and the Saudi royal family are in complete agreement with leftist demagogues like Michael Moore and influential environmentalists like Michael Meacher, it's safe to say "the nuts is about to hit the fan."

"Are We 'Running Out'?  I thought there was 40 Years of the stuff left"

The issue is not one of "running out" so much as it is not having enough to keep our economy running. In this regard, the ramifications of Peak Oil for our civilization are similar to the ramifications of dehydration for the human body. The human body is 70 percent water. The body of a 200 pound man thus holds 140 pounds of water. Because water is so crucial to everything the human body does, the man doesn't need to lose all 140 pounds of water weight before collapsing due to dehydration. A loss of as little as 10-15 pounds of water may be enough to kill him.

In a similar sense, an oil-based economy such as ours doesn't have to deplete its entire reserves of oil before it begins to collapse. Once the shortfall between demand and supply gets beyond 10-15 percent, all hell is going to break lose.

To understand the nature of the coming crisis, you need to understand what geologists call "Hubbert's Peak," named for the Shell geologist Dr. Marion King Hubbert. In 1956, Hubbert accurately predicted that US domestic oil production would peak in 1970. He also predicted global production would peak in 1995, which it would have had the politically created oil shocks of the 1970s not delayed the peak for about 10-15 years.

Oil will not just "run out" because all oil production follows a bell curve. This is true whether we're talking about an individual field, a country, or on the planet as a whole.

Oil is increasingly plentiful on the upslope of the bell curve, increasingly scarce and expensive on the down slope. The peak of the curve coincides with the point at which the endowment of oil has been 50 percent depleted. Once the peak is passed, oil production begins to go down while cost begins to go up.

In practical and considerably oversimplified terms, this means that if 2000 was the year of global Peak Oil, worldwide oil production in the year 2020 will be the same as it was in 1980. However, the world’s population in 2020 will be both much larger (approximately twice) and much more industrialized (oil-dependent) than it was in 1980. Consequently, worldwide demand for oil will outpace worldwide production of oil by a significant margin. As a result, the price will skyrocket, economies will crumble, and resource wars will explode.

Graph: Dr. C.J Campbell (1996)

"What about Other or New Sources of Oil?"

Fortunately, we have a massive amount of oil located in the oil sands up in Canada and down in Venezuela. Unfortunately, these oil sands projects are projected to peak in 2020 at about 4-5 million barrels of oil per day. That's not much oil considering we currently need 82.5 million barrels per day and are already losing over 1 million barrels per day due to depletion.

Some people believe oil is actually a renewable resource continually produced by a "biotic" process deep in the Earth. As emotionally appealing as this theory may be, it ignores most common sense and all scientific fact.

Even if this theory is true, it isn't doing us much good as production is declining in pretty much every nation outside the Middle East.

The oil companies don't give this theory the slightest bit of credence even though they are more motivated than anybody to find an unlimited source of oil as each company's shareholder value is based largely on how much oil it holds in reserve.

"Aren't There Alternatives to Oil?"

Many politicians and economists insist that there are alternatives to oil and that we can "invent our way out of this." Physicists and geologists tell us an entirely different story. The politicians and economists are selling us 30-year old economic and political fantasies, while the physicists and geologists are telling us scientific and mathematical truth. Rather than accept the high-tech myths proposed by the politicians and economists, its time for you to start asking critical questions about the so called "alternatives to oil" and facing some hard truths about energy.

Unfortunately, since most people see and hear only what they want to see and hear, the politicians and economists are lauded while the physicists and geologists are ignored.

While there are many technologically viable alternatives to oil, there are none (or combination thereof) that can supply us with anywhere near the amount of net-energy required by our modern monetary system and industrial infrastructure.

If we have a few dozen technological miracles, unprecedented political will and bipartisan cooperation, massive amounts of investment capital, and about 25-50 years of peace and prosperity to retrofit the world's 40 trillion dollar per year industrial infrastructure, we might be able to get the energy equivalent of 3-5 billion barrels of oil per year from alternative sources.

That's a tremendous amount of oil - about as much as the entire world used per year during World War II, but it's not enough. Unfortunately, the world currently needs over 30 billion barrels of oil per year to support economic growth. That number will only increase as time goes on due to population growth, debt servicing, and the industrialization of countries like China and India.

Furthermore, people tend to think of alternatives to oil as somehow independent from oil. In reality, the alternatives to oil are more accurately described as "derivatives of oil." It takes massive amounts of oil and other scarce resources to locate and mine the raw materials (silver, copper, platinum, uranium, etc.) necessary to build solar panels, windmills, and nuclear power plants. It takes more oil to construct these alternatives and even more oil to distribute them, maintain them, and adapt current infrastructure to run on them.

Plant based alternatives like ethanol and bio-diesel are also entirely dependent on an abundant supply of oil as modern agriculture is entirely oil-powered. All pesticides are derived from oil while all fertilizers are derived from natural gas, which is also running out. As oil production declines, so will our ability to produce food and agricultural-based alternatives to oil.

It's not just transportation and agriculture that are entirely dependent on abundant, cheap energy. Modern medicine, water distribution, and national defense are each entirely powered by oil and petroleum derived chemicals. Most consumer goods are made with plastic, which is derived from oil.

As Matt Simmons has stated; usable energy is the world's most critical resource then obviously it is an important issue.  Without volume energy we have no sustainable water, we have no sustainable food, we now have no sustainable healthcare.

"What About Amazing New Technologies?"

Technologies such as thermal de-polymerization are promising as solutions to our landfill problems, but since most of the feedstock (such as tires and turkey guts) requires high-grade oil to make in the first place, it is not a solution to a permanent oil shortage. Furthermore, there is only one thermal de-polymerization plant online and it is producing less than 500 barrels of oil per day. While the technology certainly deserves investment, it is both reliant on oil and it is simply "far too little, way too late" for it to save you from the devastating economic effects of the coming energy famine.

While there are some promising technological advancements in areas such as solar-nanotechnology, even the scientists at the forefront of these technologies admit we need a series of "miracles" to prevent a total collapse of industrial civilization.

In other words, the chances of technology saving you from the coming economic collapse are about the same as the chances of another virgin-birth taking place.

For you or any other "average" person to expect high-tech solutions to save you from the economic effects of Peak Oil is akin to a person living in sub-Saharan Africa to expect high-tech medical treatments to save their community from the effects of AIDS. These treatments are available to people like Magic Johnson, not the folks in Africa. Likewise, many of the recent technological advancements in energy production and efficiency may be available and affordable to people like George W. Bush and Warren Buffet or agencies like the Department of Defense, but they aren't going to be available or affordable to the average person.

The idea that technology is going to save you from this crisis is downright silly. Technology uses energy. It does not produce it. Here in the 21st century, we have no shortage of technology. We have a shortage of energy. As you are probably well aware, the price of technology has been plummeting while the price of oil has been skyrocketing.

Besides, most forms of technology require tremendous amounts of oil in the first place. The average desktop computer, for instance, consumes 10 times its weight in fossil fuels during its construction alone.

On a similar note, the average car consumes 120,000 gallons of fresh water just during its construction. Unfortunately, the world is in the midst of a severe water crisis that is only going to get worse in the years to come. Scientists are already warning us to get ready for massive "water wars."

Consequently, the only way for us to replace our current fleet of gas-guzzling SUVs with fuel-efficient hybrids is to kill 2-3 billion people, steal their fresh water, and use it to construct a new generation of high-tech cars.

The widespread use of technologies such as the internal combustion engine and the air conditioner is what got us into this situation. It is thus unlikely that even more technology will get us out of it.

"What's Going to Happen to the Economy?"

Even if you can currently afford these technologies, it won't help you much since the majority of the population can't. Got solar panels on your roof and a brand-new hybrid car? Great, but since most people can't afford those things, the economy is still going to collapse.

The US economy is particularly vulnerable to the coming oil shortages. As the most indebted nation in the world, the US is completely dependent on strong economic growth just to pay the interest on its debts. This is as true for individual citizens as it is for corporations and governments. A declining oil/energy supply means the economy can't grow which means individuals, corporations, and governments can't pay off their debt; which means economic anarchy is on the way.

Furthermore, unlike nations in Europe, the US has built its entire infrastructure and way of life under the assumption oil would always be cheap and plentiful. Since that is no longer the case, the US economy is in even more trouble than the economies of nations like the UK, Germany, Spain, and France.

So even in the best-case scenario, we're looking at an international financial meltdown and a collapse of the value of US dollar so severe that the Great Depression will look like the "good ole days."

The financial dislocations wrought by the coming oil shocks will plunge the world into a series of resource wars and "currency insurgencies" unlike anything we can imagine.

If you’re like 99 percent of the people reading this letter, you had never heard of the term Peak Oil until today. I had not heard of the term until a year ago. Since learning about Peak Oil, I’ve had my view of the world, and basic assumptions about my own individual future, turned completely upside-down.

While the above introduction does seem alarmist; the reality of oil as an exhaustible raw material is beyond dispute.  The article below from the April 5, 2004 edition of Business Week brings additional perspective

Oil Shortage?

 Saudi Arabia: There's plenty in the ground, but it won't be easy to get. The kingdom may need major new foreign investors. Will it dare open up?

Saudi officials like to fly visitors across the Empty Quarter, the forbidding desert that occupies the eastern portion of the kingdom, to visit the Shaybah oil field. Nestled amid stunning sand dunes like a ship in a vast ochre ocean, Shaybah is a source of national pride for the Saudis -- akin to the Hoover Dam or the Apollo space missions for Americans. To outsiders, the message is: When it comes to oil, you can count on us. "We are the most reliable producer and supplier of crude in the whole world," says Mahmoud M. Abdul Baqi, exploration chief of Saudi Aramco, the giant state-owned company that produces most Saudi oil and gas and exerts powerful control over Saudi Arabia's economy.

Shaybah, which started producing in 1998, is an impressive piece of engineering. Developing the field was made possible by the use of multi-branched wells that were bored under the towering dunes from salt flats interspersed among the red hills. The new wells produce 10 or more times the volume of a traditional vertical well, sharply reducing the number of holes needed and thus slashing costs. Shaybah's installations are built to withstand scorching temperatures of up to 50C. One hundred million cubic feet of sand were moved to construct a new town, complete with giant swimming pool, mosque, and library, to house the 700 or so workers operating the facilities.

But tours of Shaybah may no longer be enough to allay doubts about the shelf life of Saudi Arabia's oil fields and the reliability of its reserve estimates. Long-standing assumptions about Saudi oil are being questioned -- with some observers wondering if Aramco is too resistant to needed outside investment. The doubts come at a time when the kingdom is coping with a domestic Islamist insurgency and a changing relationship with the U.S. The uncertainty is rattling the markets just as oil prices are pushing $40 a barrel and reserves of oil companies, especially those of Royal Dutch/Shell Group, are being revised downward.

 Since it's widely assumed that Saudi Arabia controls about a quarter of the world's oil, any doubts about whether the kingdom has the goods go to the heart of the global economic system. Will the Saudis be able to raise production as demand rises and traditional oil sources elsewhere decline? "We cannot afford to be wrong about the ability of key exporters to meet growing oil demand to make up for disruptions in supply," says Robert E. Ebel, director of the energy program at the Center for Strategic & International Studies (CSIS), a Washington think tank. "Too much is at stake politically and financially."

 “There Is No Plan B”

The most vocal skeptic is Matthew R. Simmons, chairman of Simmons & Co. International, a well-known Houston-based investment bank specializing in energy. He made headlines in February by telling a CSIS audience that the Saudi "miracle" of almost effortless, cheap production was nearing an end. Drawing on technical papers published by the Society of Petroleum Engineers and a February, 2003, visit to Saudi oil fields, Simmons thinks the Ghawar Field, the world's largest, with production of 5 million bbl. per day, could be running dry. Other fields of similar vintage -- Ghawar was discovered in 1948 -- such as Forties in Europe's North Sea or Alaska's Prudhoe Bay, have declined sharply from their peaks. "The entire world assumes Saudi Arabia can carry everyone's energy needs on its back cheaply," says Simmons. "If this turns out not to work, there is no Plan B."

Simmons says the big problem is "no data" for the reserves of Saudi Arabia and other big Mideast producers. "No third-party inspector has examined the world's most important [energy] insurance policy for years." If the Saudis don't like the questions, he says, they should present "good, transparent data" to back up their claims. Simmons also suspects that most of the other big Saudi fields, including Abqaiq and Berri, could be past their peak. He thinks production has been sustained by technology -- chiefly a system known as water injection -- and that a sudden collapse in a field is possible. That occurred at Oman's Yidal field, to Shell's regret. He speculates that the Saudis may soon have to develop fields once deemed marginal, boosting capital costs.

 If Simmons is right, the Saudis could soon be in deep trouble. Their relations with the U.S. are already strained thanks to the participation of so many Saudis in the September 11 attacks. If it turns out they have much less oil than they claim, "the role of the kingdom would be completely devalued strategically," says Roger Diwan, a senior analyst at consultant PFC Energy in Washington. With no alternative to oil in sight for decades, the U.S. and other consuming nations would increasingly need to look to other sources, such as Russia or Iraq.

 Not surprisingly, the Saudis have reacted with shock and dismay to the skepticism. Some mutter darkly about conspiracies against their country. "What's the story? Why this sudden panic?" said Abdul Baqi in a meeting with BusinessWeek at Aramco's Dhahran headquarters in Saudi Arabia's Eastern Province.

Simmons' pronouncement is having one beneficial effect: The tight-lipped Saudis are opening up, to a degree. Three top Aramco reservoir engineers and geologists offered BusinessWeek a scenario as optimistic as Simmons' is gloomy. Even though it has been producing oil for decades, they say, Saudi Arabia has depleted only 28% of its proved reserves. Not only does it have 260 billion bbl. of proved reserves with a 90% probability of recovery, 100 billion more barrels of already discovered oil may be recoverable, especially as technology improves. As for Ghawar, the Saudis produced detailed data showing that pressure is steady and water content of the oil -- a sign of trouble if it's extensive -- is under control. "I think [Simmons' argument] is completely wrong -- based on flawed statistics and very poor engineering analysis," says Nansen G. Saleri, a longtime Chevron veteran who is now Aramco's chief of reservoir management.

The Saudis conclude that the kingdom could easily ramp up to 10 million bbl. a day from its current 8.5 million and comfortably sustain that level through 2042. If demand is really strong, they insist, the kingdom could build up to 12 million bbl. a day by 2016 and hold that level out of existing reserves until 2033.

But while few in the industry doubt the Saudis have huge quantities of oil, experts warn that even the Saudis won't know their capabilities until an actual ramp-up. "Even they won't know until they have tested," says Herman Franssen, president of International Energy Associates Inc., an energy consultant in Chevy Chase, Md. And the Saudis may face far greater challenges in developing their reserves and maintaining production than they would like to admit. "We think Saudi Arabia has huge reserves," says Fatih Birol, chief economist at International Energy Agency, a Paris-based intergovernmental group that monitors global energy supply. "We also recognize that these reserves may have geological surprises ranging from steep decline rates in some giant fields to water [problems]."

In addition, if older fields elsewhere in the world run dry, the Saudi fields may be called upon to perform heroically: Birol estimates that the Saudis would need to double current production capacity, to 20 million bbl. a day, by 2020. His agency figures that global demand for oil will grow from 80 million bbl. a day in 2004 to 115 million by 2020. In this scenario, the Saudis would be supplying close to 30% of that increase.

The Saudis and some analysts are skeptical that demand will rise that much, even with behemoth China consuming as much as it can. One reason: Higher prices may curb the world's thirst. "Some of these long-term forecasts are way off the mark," says Saddad Husseini, who recently retired as Aramco's executive vice-president. "They show a minimal change in price and a huge increase in demand." But among outside analysts, there is lingering concern about whether the Saudis are moving fast enough to develop new sources of crude. "The issue is not whether there is enough oil but rather whether they have the willingness and the ability to develop it in a timely manner," says Edward L. Morse, a former U.S. official for global energy policy and now a senior adviser at Hetco, a New York-based energy trader.

The numbers are huge. With new capacity costing $3,000 to $6,000 per daily barrel, the Saudis would have to spend somewhere around $6 billion to $12 billion just to get to 12 million bbl. a day -- along with substantial costs to maintain production. Doubling output would require much broader investment, perhaps $150 billion, Birol estimates. He worries that because Saudi Arabia and other big Mideast producers, such as Iran, are largely closed to foreign investment, there may be financing constraints. "If the reserves are closed to [foreign direct investment], they may not be able to find the necessary funds," he says.

For now, with oil prices high, Aramco doesn't seem to be having any problem making the case for its budget to the Saudi government. But economists in the kingdom think that in coming years, with a growing population and demand for more schools, hospitals, and other public services, Aramco could find its spending curtailed. Its executives shrug off such concerns. Projects such as Shaybah have come in ahead of schedule and below cost.

Aramco executives also like to distinguish their organization from other national oil companies, arguing that Aramco retains the commercial ethos of its founding American partners -- not the sometimes lax attitude common at most state-run organizations. Certainly, Aramco personnel are an elite among Saudi industry. Engineers display an American-style, can-do approach to their jobs. Onsite, at least, they wear Western clothes -- not the cumbersome Saudi national uniform of white robes and checkered kaffiyehs. "I worked 18 years at Chevron, and I don't really see the difference," says Saleri. "In fact, as far as the ability to do things, we have tremendous empowerment."

Gingerly Pace

Yet Aramco is also different from an international oil company. It is managing gigantic fields with a long-term strategy rather than milking smaller ones for all they're worth, as majors often do. Shaybah is now producing about 550,000 bbl. a day -- even though Aramco execs say that with close to 16 billion bbl. of reserves, the field could easily be milked for 1 million bbl. a day. An oil major, under pressure to maximize returns on capital, would likely be pumping at much nearer that level. But Aramco is proceeding at a gingerly pace, preferring to more fully understand Shaybah's reservoirs before pushing them harder, even though the field's high-quality crude brings a premium of a dollar or more per barrel over the heavier oil from other Saudi fields. "We drive slowly, not fast," says Saleri.

Aramco execs say they don't feel much urgency to add production capacity. They plan a hike of 1.4 million bbl. a day or so by 2009, but that might just make up for depletion in the years between. But Aramco execs may have another reason to downplay talk of a crisis: They don't want the government in Riyadh to invite oil majors in to develop the next generation of Saudi oil fields. Aramco isn't happy about the prospect of having foreign companies operating in the kingdom. They like having all of those reserves for themselves -- and would probably balk at the hard-charging style of an Exxon Mobil Corp. or a BP PLC

Partly because of Aramco's opposition, a four-year, high-profile effort led by Crown Prince Abdullah to attract global companies to explore for gas to power electricity, petrochemical, and water projects worth tens of billions of dollars collapsed last year. It was replaced by much more modest wildcat exploration schemes. ExxonMobil and BP walked away, while Royal Dutch/Shell and Total agreed to an exploration deal. In March, several more global companies, including Russia's Lukoil, Spain's Repsol, and Italy's ENI signed gas-exploration deals.

One goal of the gas initiative, according to sources close to the project, was to break Aramco's domination of the Saudi oil-and-gas industry. But Crown Prince Abdullah and Foreign Minister Saud al Faisal underestimated the power of Aramco and Oil Minister Ali Naimi, a fierce advocate of the national company who was its first Saudi CEO. Naimi and his minions drove the majors crazy by restricting them to exploration acreage they considered marginal. At the signing ceremony on Mar. 7, Naimi hinted that it will be a long time before more foreign investors are let into the kingdom's oil-and-gas industry. "It is necessary to slow down to know the results of this work," he said.

Still, Saudi Arabia is changing, and Naimi, who is 68, won't be in his job forever. Like the proverbial camel, international oil companies have their noses under the Saudi tent. As demand for oil rises, they hope they'll find a way in.

Based on the evidence presented by a wide variety of experts not even touched upon in this web page; I can only conclude that the Saudi state run Aramco is not being candid about their ability to produce increasingly greater quantities of oil and that demand will outstrip supply at an alarming rate in the not too distant future. 

Given that the primary source of oil rests in the hands of the "Ten Horns" oil prices will continue to climb.

This in itself will cause tremendous political and economic upheaval, and will fundamentally change civilization as we know it.