Saudi Arabia has more oil than we may ever need

Saudi Arabia has more oil than we may ever need, by Andy Critchlow.

Saudi Arabia has finally silenced its peak-oil critics and simultaneously revived interest in its stalled $US2 trillion ($2.8 trillion) plan for a stock market float of state-owned producer Aramco.

The kingdom revealed this week it has enough crude to pump at current rates for at least another 70 years. At the end of 2017, Saudi oil reserves stood at an eye-watering 268 billion barrels, up from previous estimates of 266 billion. By comparison, the UK’s remaining cache of retrievable oil under the seabed of the North Sea will be almost completely drained, probably after another couple of decades. …

It’s a perennial favorite. For example, in 1910 critics of the British Navy’s switch from coal to oil pointed out that all known oil would be depleted by 1922. The latest peak-oil scare is also apparently bogus (unless someone is exaggerating to justify a huge valuation on Aramco):

In his critically acclaimed 2005 book Twilight in the Desert, the then-prominent oil economist Matthew R Simmons predicted that Saudi Arabia’s oil wells were about to run dry. His theory was based on the ageing status of several gigantic oilfields, which still provide the bulk of the kingdom’s near-11 million-barrel-per-day output.

Simmons triggered a wave of paranoia, which Riyadh had failed to entirely dispel until now. …

Instead of running out of oil, Saudi Arabia’s bigger problem is a deficiency in transparency. Its reserves have rarely been publicly updated, or audited by an independent third party until now. Doors to the data rooms of Aramco – which is responsible for almost its entire national output – have been tightly locked. The reason for this new spirit of openness could be Aramco’s proposed public listing. …

“Every barrel we produce is the most profitable in the world, and why we believe Saudi Aramco is the world’s most valuable company and indeed the world’s most important,” said Saudi oil minister Khalid Al-Falih in a statement posted on the state news agency’s website. …

Al-Falih said Aramco’s oil costs just $US4 per barrel to produce. It’s a key figure for potential investors, which could make its $US2 trillion valuation more believable. …

The fact is oil markets are more likely to dry up before Aramco’s reserves of crude run out. Demand for oil remains robust despite the growing popularity of electric vehicles and the pressure of climate change forcing consumers to search for cleaner transportation fuels.

Oil and gas are just stop-gaps until we develop fusion power, which will power electric vehicles (via the grid).