Peak Oil and Our Mental Models. The WikiLeaks Cable and The World’s Largest Oil Fields.

In the two previous articles on Peak Oil I have discussed the future Outlooks concerning Oil made by the International Energy Agency (IEA) and the US Energy Information Administration (EIA). In this article I will focus on two aspects in depth. The first aspect is to focus on the World’s largest Oil Fields and see what importance they play for the world oil production. The second aspect is to focus on the secret diplomatic cable released by WikiLeaks from US embassy in Riyadh in Saudi Arabia.

In the 2011 World Energy Outlook by the IEA the Production of Crude Oil from the oil fields that produce oil in 2010 in expected to drop by over Two-Thirds by 2035. Quote: “We project that crude oil production from fields that were producing in 2010 will drop from 69mb/to 22mb/d by 2025 – a fall of over two-thirds”. But the IEA still expects the crude world production to remain at 67,9 mb/d per day 2035 from Crude Oil Yet to be found and Yet to be developed (WEO 2011: 122-123).

The WikiLeaks Cable
In 2010 WikiLeaks made the largest publication of classified material in history when a large number of US diplomatic cables were released. Among these cables one cable from the US Embassy in Riyadh from the 10th of December 2007 was released. This cable focus on an interview with Dr Sadad al-Husseini. Al-Husseini was formerly the Executive Vice President for Exploration and Production at Saudi Aramco, he also has Ph.D. in Geological Sciences. In this interview al-Hussseini warns that the Saudi Oil Reserves may be overstated by as much as 40%. Concerning the implication of this statement al-Husseini believes that:

“In al-Husseini’s view, once 50 percent depletion of original proven reserves has been reached and the 180 billion bbls threshold crossed, a slow but steady output decline will ensue and no amount of effort will be able to stop it. By al-Husseini’s calculations, approximately 116 billion barrels of oil have been produced by Saudi Arabia, meaning only 64 billion barrels remain before reaching this crucial point of inflection. At 12 million b/d production, this inflection point will arrive in 14 years.”

“While al-Husseini believes that Saudi officials overstate capabilities in the interest of spurring foreign investment, he is also critical of international expectations. He stated that the IEA’s expectation that Saudi Arabia and the Middle East will lead the market in reaching global output levels of over 100 million barrels/day is unrealistic, and it is incumbent upon political leaders to begin understanding and preparing for this “inconvenient truth.””

According to the cable al-Husseini describes himself as optimistic about the future outlook of energy even if he contradicts the official Aramco line. It’s clear that al-Husseini probably is one of the people in the world with the best insight concerning the future of oil production in Saudi Arabia based both on the man’s education, experience and firsthand knowledge from leading the Exploration and Production unit in Aramco.

The World’s Largest Oil Fields
The number of producing oil fields 2007 was around 70.000; in total these fields produced around 70 million barrels oil per day (WEO 2008: 225-226). As previously noted the IEA expects that production from fields that was producing oil in 2010 is expected to drop from 65 mb/d to 22 mb/d in 2035. But the IEA still expects new finding to replace this lost production. This raises the question about what type of future findings we can expect. So let’s take a look at the World’s Largest Oil Fields.

The Top 10 Producing Oil Fields in the World 2007
1.) Ghawar 5,1mb/d
Ghawar In Saudi Arabia in undoubtedly the King of Kings. Ghawar was discovered in 1948 and has been producing enormous amount of oils ever since. Ghawar alone has historically produced somewhere between 55-65% of all oil coming from Saudi Arabia. The Fields Peaked in its production 1980 with a production of 5,58mb/d, the production was still at an amazing 5,1mb/d 2007.

2.) Cantarell 1,6mb/d
Cantarell in Mexico is the World’s Second most producing Oil Field. The Field was discovered in 1977, peaked in its production in 2003 with a production of 2,05mb/d a figure that had dropped to 1,6mb/d in 2007.

3.) Safaniyah 1,4mb/d
Safaniyah in Saudi Arabia was discovered in 1951. The field Peaked in its production 1998 with a production of 2,12mb/d, in 2007 the production has dropped to 1,4mb/d.

4.) Rumaila 1,25mb/d
Rumaila was discovered 1953 in Iraq. The field Peaked in its production in 1979 with a production 1,49 mb/d, in 2007 the production had dropped to 1,25mb/d.

5.) Greater Burgan 1,17mb/d
This oil fields in Kuwait was discovered in 1938, the production peaked in 1972 with a production of 2,415 mb/d a figure dropped to 1,17mb/d in 2007.

6.) Samotlor 0,903mb/d
This Russian Oil Field was discovered in 1960, it Peak in its production in 1980 with an enormous production of 3,435mb/d, a figure that had dropped sharply to 0,903mb/d in 2007.

7.) Akwaz 0,77mb/d
This Iranian Oil Field was discovered in 1958 and peaked in its production in 1977 with a production just over 1 million barrels and dropped to 0,77mb/d in 2007.

8.) Zakum 0,674mb/d
This oil field in Abu-Dhabiwas discovered in 1964, peaked in 1998 at 0,795mb/d and had dropped to 0,674mb/d in 2007.

9.) Azeri-Chirag-Guneshli 0,658mb/d
This oil field in Azerbaijan was discovered in 1985 and hadn’t peaked in yet in 2007 with a production of 0,658mb/d.

10.) Priobskoye 0,652mb/d
This Russian oil field was discovered in 1982 and hadn’t peaked yet in 2007 when it has a production of 0,652mb/d.

From these figures we can see several trends. The World’s Largest Oil Fields play a very important part for supplying the world’s energy demand. The Top Ten Fields produced 14,26 mb/d; around 20% of the World’s Total Oil Production. If the next ten fields were added the figure was around 25%. In total there was around 70.000 Oil Fields producing oil in 2007 and 20 of these fields produced a fifth of all the oil (WEO 2008: 225-226).

Another fact also stands out very clear; none of these fields has been discovered recently; the ones that was discovered the latest was discovered in 1982 and 1985. Only two of these fields hadn’t reached their Peak in production in 2007; the rest where on decline. During the summer of 2011 there were big headlines concerning an unusually big oil find outside the coast of Norway that is expected being able to produce up to 500-1200 million barrels of oil. Ghawar with its production of 5 million barrels of oil per day produces this amount of oil in 100-210 days. The trends of smaller and smaller findings are something often stressed by researchers within the Peak Oil movement; smaller and smaller fields of oil are being discovered even though the technological tool available to search for new fields constantly develops.

Peak Oil and Our Mental Models
If Peak Oil is truly here or not is not a question that I can answer. In this article I have lifted the trend of largest oil Fields in the World and classified information from WikiLeaks concerning the situation in Saudi Arabia. No matter what information that I present I almost always the same response; people simply agree or totally disregard the possibility of Peak Oil. One aspect that I would like to raise is mental models and mind-sets. This is one the major subjects that Richard Heuer lifts in the book Psychology of Intelligence Analysis. Heuer believes that people construct their own reality based on the information that they observe. We are influenced by many factors like cultural values, education and past experiences but also by factors like the role we are expected to fill and norms within organizations or communities (Heuer 1999: 4-5).

This is a critical aspect that is not lifted enough: We do not focus upon our own mental models. There was a time when most people believed that world was flat. Economical Growth and an increase in the standard of living has been the truth for a long period time. We expect things to get better and better, we expect that the standard of living will be higher and higher. This is one of our cultures most central ideas and a message that reach us every day from multiple sources. One things that Heuer lifts is that when a paradigm change, as the end of the cold war takes place the experts how knew the most about the subject is those how have the most to unlearn when it comes to adapting to a new reality (Heuer 1999: 5). Heuer also focus on the fact that when a mental form is created and the new information is assimilated into the existing model. We continue to use models that worked well in the past long after they have become outmoded (Heuer 1999: 8-11, 73).

Analysis
If the IEA forecast concerning the fields that were producing oil 2010 turns out to be correct the production from these fields will drop by 45,9mb/d until 2035. By the same period of time Natural Gas Liquids, Unconventional Oil and Bio Fuels is expected to increase from 15,6 mb/d to 32,9mb/d, an increase with 17,3 mb/d. This would mean that we still need to bring oil fields that can produce 28,6 mb/d online just to remain on same total production that we have today of liquid fuels (WEO 2011: 122-123).

I would like to focus on some critical aspects from this information
• The positive forecast depends on two critical components
1.) The Production of alternative fuels will double during this period of time
2.) New Oil Fields will be found and developed that will able to offset the drop in 45,9mb/d in production from existing Oil Fields.
• This is assumptions that are required for this analysis to be correct.
• The analysis made by the IEA focus on a scenario when Saudi Arabia will increase their production from 10mb/d in 2010 to 13,6mb/d in 2035.

So how do the classified information from WikiLeaks and the trend concerning the World’s biggest Oil Fields fit in this projection? The IEA expects the production in Saudi Arabia to go from 10mb/d per day in 2010 to 13,9 mb/d per day in 2035. As the diplomatic cables from 2007 released by WikiLeaks even al-Husseini, the former Executive Vice President for Exploration and Production at Aramco is skeptical towards this prognosis. It’s fully possible that al-Husseini is incorrect in the assessment; but the central role within Aramco and the man’s technical expertise is hard to deny.

From looking at the World Largest Oil Fields today it’s clear that the greatest findings have taken place several decades ago. New findings have taken place but none of them have the capacity of the top 20 Oil Fields producing Oil today. The Top 20 Oil Fields in the World produce around 25% of the World’s Oil; around 19,16 mb/d. If you compare this to the 45,9mb/d required to compensate for the fall from fields producing in 2010 up until 2025 it clear that we will either have to be very lucky in our explorations or find an enormous amount of small fields.

Bloggers and researchers often tend to present dramatic forecasts that get a lot of attention. Instead I would suggest that you do something else. No matter where you stand concerning the subject of Peak Oil I would suggest that you ask yourself what your mental-model of the situations is and what assumptions this model relies upon? What data challenges your assumptions and what data confirms your assumptions? From there I suggest that you make up your own mind.

Other Articles
Is Peak Oil Already Here?
The US Energy Information Administration - No Peak in World Oil Production in another 23 years
Peak Oil

It’s Not Over Till It’s Over

The World is Coming to an End. Things are getting darker and darker every day and soon something is going to happen. It will be swift and it will be hard. This is the basic story presented by most people in the Survivalist and Prepper movement. Everyone that is involved in the movement see this type of threads and post about all the time. Predictions made about specific dates, events and forecast. It’s happening soon – It is time to step up your efforts before it’s too late.

In this article I will challenges some of the perceptions within the movement and discuss what we can do broaden our perspectives. It will take you around two hours to look through the material presented in this article but it will most likely increase your understanding of the world and give you some new perspectives.

The Survivalist Narrative
Like I wrote before the story that is most often presented within the Prepper and Survivalist Movement is the story of the Sudden collapse. The World As We Know It will fall apart basically over night and only the well prepared or lucky will make it through. This is the scenario presented in two of the most popular fictional books often recommended; “Patriots” by James Wesley Rawles and “One Second After” by William R Forstchen. In the first book the US economy breaks down, violence, collapse and a foreign invasion follows. In the second book the US gets hit by a High Altitude Electro Magnetic Pulse (HEMP) that takes out all modern electronics from computer, to cell phones, modern cars and the electrical grid resulting in the death of a majority of the US population and a following invasion.

Our Perception of the World and Cognitive Bias
Richard Heuer is Psychologist that used to work for the Central Intelligence Agency (CIA). In the book Psychology of Intelligence Analysis Heuer discuss many of the challenges the people working within the Intelligence Community face and why the often make incorrect analysis. One of the things that affect people the most is that we see what we expect to see and that different situations also affect how we perceive the world. During nighttime people are more likely to hear foot steps behind them when walking home compared to during daytime. Another critical aspect identified by Heuer is that when we have created mindset about something it resists change, no matter if there is strong evidence that suggests otherwise, new information that does not fit our first impression is changed so that it fits the original analysis or disregarded. This is something that every person does even if it is not a conscious process.

Two Stories about The World
A Good Story
So how does one change an incorrect assumption about the world? This is not an easy task. One method that can be used is to research facts, if the fact does not support our perception we might simply be incorrect. But to collect and display statistics in a way that makes it possible to understand and put in relation to other facts is not easy.

One person that has done is Hans Rosling. Rosling is a professor in public health and have been working as a doctor in countries that does not have many of the resources that hospitals in rich countries have. Rosling have the help of other created a graphical interface that allows statically information to be used to show the change within different countries over time when it comes to field like life expectancy, income, fertility rate and child mortality. This may not sound very interesting at first but I suggest that check out the video "New Insights on Povery". Its 20 min long, it will blow your mind and shake the perspective that you have of the world. Most people may assume that politicians and other top people within the business world has a good understanding of the world around them, but many of the leading people in the world has approached Rosling after he’s talks and said that they had no idea about facts that he just showed them.

A Troubling Story
If you have watched the video with Rosling you might be in quite a good mood. In 2009 the French filmmaker Yann Arthus-Bertrand made one of the most troubling movies about the contemporary world. In the movie “Home” multiple questions like the Population Explosion, Peak Oil, The Depletion of Non Renewable Resources and Environmental Destruction is discussed. The movie was not made to generate profit and can be seen by anyone for free on YouTube. This is a movie that I really recommend for everyone.

"Home" is not a unique movie, many similar productions have been made the last years like the National Geographic Documentary “2210 The Collapse?” based on the book by Jared Diamond, “Blind Spot” and “The End Of Suburbia” just to name a few. The stories are not identical but the message that they present are very similar; The world is facing an unprecedented crisis and we are not even aware of what’s coming.

So Where Does These Two Stories Leave Us?
After seeing these two videos you have been presented with two versions of the world both based upon facts. They are radically different, so is does any of these two perspectives present a correct perspective of the world today? My answer would be that both perspectives are correct. Both stories are grounded in fact. The message of the two perspectives are almost the exact opposite from the other and this is a good example of why it is so difficult to understand the complexity of the world even if one has some of the facts available.

What Should You Take With You From This Article?
So what would I like the reader to take with them from this article? First of all that the world is not only a set of facts, how we perceive these facts shapes our perception of the world. As Preppers and Survivalist the stories that we are told within the movement makes it easy to disregard information that does not support these stories. Many also take the information presented when a major crisis occurs as a sign that the “Big One” is here. This is something that takes place every time a new threat is presented, no matter if it is the swine flu, an economic crisis or most recently the events surrounding the tsunami and nuclear crisis in Japan. Positive information is disregarded and negative information reinforced by many.

Most people that are not Survivalist and Preppers on the other hand often totally disregards information suggesting that major disasters or accidents may occur no matter what information that is presented to them. This can make it a very frustrating process discussing crisis preparedness, prepping or survivalism with anyone that does not share this perspective since the two people do not share the same perception of the world and will not easily change this perception no matter what facts they are shown.

So why did I write this article? I share many of the concerns that the can be found within the Prepper and Survivalist Movement, but I believe that it is important to always look at the entire picture and not just look for information that supports the conclusions that one has already made. An analysis based upon only positive or negative information will not be as accurate analysis than an analysis that also incorporates contradicting information. The other aspect is hope. Many discuss potential coming problems like they have already happened, like there is no possibility that we can overcome the problems that we face. People that give up on hope in a survival situation often die as a result. With skills, health, knowledge and the will to survive people have made it through situations that have been more or less hopeless. I believe that it is critical that one train too not only see the bad in every situations but also the positive sides and possibilities presented. This can also allow one to find solutions for problems before they manifest, instead of just sitting around and waiting for them to manifest.