Re: Life after the oil crash

Looks like Jeff Gerth in today's NYTimes is singing the same warning song.
http://www.nytimes.com/2005/10/27/business/worldbusiness/27oil.html

Excerpts:

Doubts Raised on Saudi Vow for More Oil
 
         By JEFF GERTH
Published: October 27, 2005
WASHINGTON, Oct. 26 - Last spring, the White House publicly embraced plans by Saudi Arabia to increase its oil production capacity significantly. But privately, some officials and others advising the government are skeptical about some of those Saudi forecasts.
The United States relies on a few producers to maintain enough spare capacity to keep prices and markets stable, even during war or disaster. As oil prices have climbed over the last few years amid surging demand and tight supplies, the Bush administration has looked to the Persian Gulf countries, particularly Saudi Arabia, to pump extra oil.

But doubts about Saudi Arabia's assurances of how much it can expand capacity - and for how long - have been raised in a secret intelligence report and in a separate analysis by a leading government oil adviser, according to a federal government official and the oil expert.

......

"There's always been this tenet on the American side," said Nawaf Obaid, a consultant to Saudi Arabia on energy security, "that the Saudis knew what they were doing and rightfully so."

But a senior intelligence official, who insisted on remaining anonymous because he was not permitted to speak publicly on the issue, said that the Saudi plans to increase production by nearly 14 percent in the next four years were not enough to meet global demand. Even the Energy Information Administration recently scaled back its expectations of how much more oil the Saudis could pump in 20 years.

......

But there are doubts about the Saudi assertions about how much oil they have. Data about reserves is tightly guarded, and the Saudis dismiss skeptics as uninformed.

But they do not dismiss Edward O. Price Jr., the former head of exploration for Saudi Aramco and an adviser to the United States government on Persian Gulf oil during both Iraq wars. He questioned future reliance on Saudi capacity in an article in The New York Times last year and wanted to know from his former colleagues how they reached their estimate of more than 150 billion barrels of extra oil. Twenty years ago, a detailed study by geologists from four large American oil companies then in partnership with Aramco found little in the way of undiscovered oil resources, he said.
Received on Thu Oct 27 10:04:31 2005