2010 May 02 Sunday
Saudis Say Oil Production Costs Up Sharply

Saudi Oil Minister Ali al-Naimi says oil extraction costs in Saudi Arabia have gone up sharply.

Costs of keeping that spare capacity have been rising, Naimi said. To develop a barrel of spare capacity at the Kingdom’s Khurais oilfield costs approximately $10,000, Naimi estimated, or double the cost of developing capacity in Saudi Arabia’s Empty Quarter a decade ago.

Meanwhile, costs of developing spare capacity at the offshore field of Manifa are about triple the levels of a decade ago, the oil minister said.

At the same time al-Naimi warns against countries trying to take measures to cut oil imports. Does he want all countries to go down together?

Thomas Friedman thinks Mexico's version of Peak Oil will lead to healthy political reforms that will strengthen the middle class. ParaPundit thinks Mexico's version of Peak Oil along with the world's Peak Oil will impoverish Mexico's middle class. Whether it also leads to a more accountable government and more market forces I can not say.

So here’s my prediction: When Mexico’s steadily falling oil production meets its rising meritocratic middle class, you will see real political/economic reform here. That is when the No’s will no longer have the resources to maintain the status quo, and that is when the Naftas from the Instituto Wisdom will demand the reforms that will enable them to realize their full potential.

The world oil decline might start as early as 2011. I'm hoping it doesn't start until 2015. I want more time to get ready and more time for car companies to bring out electric cars. But reading retired Princeton U geologist Kenneth Deffeyes makes me think we've already peaked.

When Peak Oil slashes government tax revenues severe austerity measures will become inescapable will Mexicans or Americans riot against their government in protest? If so, which cities will see the most severe riots? Which ethnic groups will be the rioters?

ATHENS — Hundreds rioted in Athens yesterday, throwing Molotov cocktails and stones at police, who responded with tear gas at a May Day rally against austerity measures being enacted by the cash-strapped government to secure foreign loans to stave off bankruptcy.

Which societies will respond most adaptively? America's depleted social capital will become a lot more problematic.

Share |      By Randall Parker at 2010 May 02 07:28 PM  Economics Energy


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