Oil Producers Deny 'Peak Oil'

Abdallah S. Jum'ah, chief executive of Saudi Arabian state-owned Saudi Aramco, the world's largest oil company by production, argued during a speech in Vienna (9/13/06) that the world has more than a century's worth of crude left at current production rates. His talk followed similar remarks by a senior Exxon executive this week.

"Mr. Jum'ah said the world had produced only about one trillion barrels, or about 18%, of the earth's producible potential of 5.7 trillion barrels of oil. "That fact alone should discredit the argument that peak oil is imminent, and put our minds at ease concerning future petroleum supplies," he said. The remaining 4.7 trillion barrels should be enough to last more than 140 years at current output rates, he said."

"In an interview, Mr. Jum'ah said the Saudis "don't mind the development of alternatives to oil," because increasing energy demand means the world needs supplemental energy sources. But he objected to government subsidies and other supports that lead people to believe that alternatives like ethanol are a "panacea" that is "around the corner," he said."

"Mr. Jum'ah's speech came two days after Exxon's Australia chief, Mark Nolan, told an industry conference in Adelaide, Australia, that "the end of oil is nowhere in sight." Mr. Nolan cited a U.S. Geological Survey estimate of more than three trillion barrels of conventional recoverable oil resources, of which one trillion barrels has been produced. Conservative estimates of heavy-oil and shale-oil resources push the total to four trillion barrels, while a 10% increase in recoverability will deliver an extra 800 billion barrels, Mr. Nolan said"

"In a sign that oil-supply concerns are gaining currency, the Department of Energy has asked the National Petroleum Council, an oil-and-gas-industry research group, to investigate peak-oil claims. The council launched a study that includes different industries and environmental groups and appointed Lee Raymond, retired Exxon chief executive, as the study's chairman. It will survey existing studies and examine why they differ on how much oil and gas the world holds and what the response should be."

"The industry says that while oil is finite, the known pool of obtainable oil grows as technology improves."

"I think there's a lot of misconceptions of what peak oil is," Mr. Raymond said in an interview last week. "The resource base is continually changing, driven by economics and technology."

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