Saudi Oil

Steve Verdun and Stuart Staniford both see Saudi Arabia facing a Oil Production constraint. Staniford has arrayed a series of graphs indicating that Saudi Oil production schedules have not been matching normal economic growth expansions, as they would have if acting as the swing Producer of Oil in the World. Staniford assumes the physical constraint comes from the Saudi need to develop smaller fields to increase Oil Production. This could be it, but I have some doubts.

My surmise is quite different. My Take on the Situation, based on no special access to information from Saudi sources, comes from my belief that Saudis have engineering analysis suggesting they need to double the depth of their Wells to fully exploit current Operating fields(to get as much Oil out as they can). Depth alone presents it’s own set of problems. Pumping from the depths imagined requires significant energy devoted to the Pumping itself. The Saudis can divert Natural Gas from the process of Pumping itself to fuel the Pumping process, but Natural Gas is itself becoming a highly marketable Product with a large Marginal Profit ratio. The Saudis are in excellent location to utilize Solar power, though there is serious difficulties in Solar energy concentration of sufficient magnitudes necessary for large Pumping operations. I am certain the Saudis are looking into nuclear power generation for Pumping purposes; a Move I believe Iran is already attempting to adopt.

Nuclear power Generation for Pumping purposes at the depths described may seem to be the cheapest mode of operation, but nuclear waste will become a problem in the long-term, and neither the Saudis or the Iranians will have either the wealth or territorial resources for adequate nuclear waste disposal. Use of Natural Gas for the Pumping will use up Natural Gas deposits a probable 30% faster than would a Salable Product market, and would cut Pumping Profits about 40% from full Distribution Sale of Product. Some form of Solar Pumping power would seem the cheapest both in the Short and Long run. The trouble will the later Solar Energy is the necessary development of technology for energy concentration. lgl