It seems that the biggest Saudi field is losing its punch.
Years ago we used to talk a lot about peak oil, the prediction made by M. King Hubbert that the easy oil was going to run out, that it was going to get harder and harder to find the stuff, and it was going to get more and more expensive to get out of the ground. Hubbert wrote in 1948: "How soon the decline may set in is not possible to say. Nevertheless, the higher the peak to which the production curve rises, the sooner and sharper will be the decline."
But according to Eric Reguly, writing in the Globe and Mail, there is trouble ahead, because that prediction about Saudi oil may not be that far off. He writes that the giant Ghawar field used to produce ten percent of the world's oil, five million barrels a day.
In fact, Ghawar is not as resilient as we were led to believe. We just found out that its output has fallen substantially since Aramco previously came clean on its reserves and production. If Ghawar is losing momentum fast, peak oil – remember that theory? – might be closer than we had thought. And Ghawar is just one of dozens of enormous conventional-oil reservoirs scattered around the planet that are in various stages of decline.
Those include the North Sea, Alaska's Prudhoe Bay, and Reguly reminds us that Mexico's Cantarell reservoir used to supply 2.1 million barrels a day and is now down to 135,000.
Problems with the strategy of bunching wells close together mean some of the more optimistic projections for oil production from shale regions may have to be lowered. https://t.co/LC29gXA1yj— The Wall Street Journal (@WSJ) March 4, 2019
The US Permian shale basin now supplies 4.1 million barrels a day, but fracked wells run out pretty quickly, and the fracking companies are all losing money. Better sell that pickup truck; it may well cost a lot more to fill it. As Reguly concludes, the Ghawar field is indeed in trouble,"and if it does collapse, peak oil will come a bit sooner."