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Originally Posted by nmap
I came across the following material about oil supplies that may be of general interest.
Briefly:
1. World total liquids production (Fig 1) remains on a peak plateau since 2006 and is forecast to fall off this peak plateau in 2009. According to the IEA, the current peak production of 86.13 mbd occurred on July 2006 and only one year later, June 2007 total liquids production fell to an unexpectedly low 84.28 mbd. As long as demand continues increasing then prices will also continue increasing.
2. Forecast world crude oil and lease condensate (C&C) production retains its 2005 peak (Fig 2). The forecast to 2100 shows declining C&C production, using a bottom up forecast to 2012 (Fig 3). The forecast to 2012 shows a 1%/yr decline rate to 2009, followed by a 4%/yr decline rate to 2012.
(Much more at: This Link )
The numbers suggest a developing imbalance between oil supply and demand, with the implication that prices will advance significantly. With the existing issues in the mortgage and debt markets, the implications for the U.S. and global economies are unpleasant.
I suspect the impact on global politics will be even sharper. China and India have expanded their usage, the U.S. needs considerable fuel to supply our domestic needs, and as supply is constrained, the potential for conflict seems likely to increase. The Middle East seems poised to get more attention, as will other producing areas such as Mexico and Venezuela.
My background in securities brokerage has given me some comfort with considering results in the markets and the overall economy – but I’m not qualified to speculate about the impact on diplomacy and possible military implications. I would guess that Saudi Arabia, Iran, Venezuela, and Mexico would all face greater instability; but it would be an uninformed guess.
Assuming such speculation wouldn't violate any security considerations, I’d very much appreciate any thoughts on the matter. |
Personally speaking I did not have a clue about the oil markets, their economic impact, infrastucture, or any of the foreign policy matters concerning oil during my 17 years in the financial services industry, especially being on the retail side of Morgan Stanley and Merrell Lynch to name two firms that worked under.
It was not until I recieved an MBA and aquired my CFA that I had some understanding of analysis of any given industry. But, in order to be in the oil analysis side of any firm it has to be the only industry that you cover and you'd better speak the languge of the region. With any decent firm your going to visit not only the HQ's of the major oil company's but the House of Saud as well. Ok, enough about that. The oill industry is especially complex to cover given the foreign relations and geographic emphasis on maintaining solid national and international housekeeping efforts both from policy and military perspective. Why do you think we went to Kuwait in 1991 ?
From a terrorist perspective their are some studies that have been done over the years, mostly those that Presidential administrations had the NSA, CIA and other intel agencies and think tanks conger up as dooms day scenarios.
From the mid 1930's to the 1960's Saudi Arabia was a branch office of America's oil giants.................a Republican internationalist fantasy. The United States remained secure in the knowledge that Saudi oil would alway's be there for us, under the sand, and as safe as if it were locked away at Ft. Knox. We built Saudi Arabia's oil business and , for our efforts, got full and easy access to it's crude. Has that changed ? and how has this administration's efforts afffected that relationship ?
The fist OPEC oil embargo took the petal off that rose, but anxiety turned into full panic in the early 1980's during the Iran-Iraq war, especially when it looked as if Iran might take the war to the Arab side of the gulf, including Saudi Arabia. With the nightmare of an Islamic praire fiire taking down the worlds economy, disaster planners in and out of government began to ask some uncomfortable questions. What points of the Saudi oil infrastructure were most vulnerable to terrorist attact ? And, by what means ? What sorts of disruptions to the flow of oil, short term and long term would be the result of such attacks? What are the real economic consequences ?
The Abqaiq extra light crude complex is both the most vunlnerable and the most spectacular target for Islamic radicals. Abqaig is the Godzilla of oil refinerys. The storage tanks and the large spheroids used to reduce pressure on oil during the refining process, and moderate damage to the stabilizing towers where the petroleum is purged of sulfar. Anybody heard of "hydrosulfurization" ? It takes place in ten tall towers, still to this day, where hydrogen is introduced into the oil in sufficient quantities to convert sulfur into hydrogen sulfide gas. This rises to the top of the tower.
Anybody wanna take a guess at what hydrogen sulfide can do to humans if let loose from ten big towers before it's rendered harmless, envirenmentally safe and usable sulfar ?
Here's three questions from Robert Baer that we should be asking.
1. Can the Wahhabis, the Shi'as, the Muslim Brothers and everyone else in Saudi Arabia who wants to bring down the Al Sa'ud lay their hands on enough firepower to do so ? it may sound easy, but believe it's not.
2. Is the House of Sa'ud beyond redemption or protection as a ruling authority ?
3. Does Washington have the capacity to see the Saudi kingdom for what it is ? Or does it have it's hand so deep in the Saudi wallet that it won't see and won't act ?