8/19/2005

Daily Kos: Matthew Simmons-$300/barrel-in 3 months, US Oil production down 30% under Bush

US Oil production down 30% under Bush. Now why would that be happening ? -- law

Matthew Simmons-$300/barrel-in 3 months
by SteveLCo
Wed Aug 17th, 2005 at 10:52:18 CDT

Reading this website, I saw a link that directs us to an interview of Matthew Simmons author of "Twilight in the Desert".

* SteveLCo's diary :: ::
*

This interview is a fascinating, and terrifying, read touching on everything from the initial discovery of oil in PA to the history of ARAMCO in Saudi Arabia. One part of the interview is especially eye opening where we see this exchange:

MATT: Let me give you some really interesting déjà vu numbers that I pulled out earlier this morning while I was thinking about the irony of the 15th anniversary of Kuwait's invasion by Iraq. I had just produced a paper called the Coming Domestic Oil Embargo - and it got enough notoriety that Forbes magazine was in preparation for doing a major article that came out a week after Saddam's invasion, called the Coming Domestic Oil Embargo, and they had a fabulous illustration of Uncle Sam filling up his car at a gas station and accidentally stepping on the hose - and what the story was all about was my concern that unless we started a totally different energy policy of using less energy, or a policy of expanding our oil supply through removing the drilling bans in the inner Continental Shelf, and finding a way to jumpstart creating more drilling rigs, and bringing more people back in, we'd wake up some day - and I never thought it would be that day, or anytime in the 90s, but I knew it would take 10 years to make this happen - we would find we had actually embargoed ourselves.

Let me tell you what the numbers were all about, because I had not thought about this until yesterday and today. In 1990 the United States was still producing 7.3 million bpd of crude oil, today it's 5.1; the 7.3 was after a drop over the previous 5 years of 1.6 million bpd; our refineries only needed to run at 13 ½ million bpd; and we only needed to import 5.8 million bpd of crude oil imports to balance our system. Today we have to run our refineries at 100% or we have major product shocks; today, we have to import 10-11 million bpd, or we lose crude oil stocks; we have to basically create almost 3 million bpd of finished product imports; we have to run the system on a 24-7, all Summer long. And we still liquidate stocks.

So we have actually now created a pending domestic embargo, and we're going to be lucky to get through the Summer without some periodic shortages. We probably will, but the odds are probably as high we will have some shortages, and then if we get through the Summer we have a fabulous respite from Labor Day to Thanksgiving, until we hunker to try to figure out how the world gets through the Winter of 2005 and 2006 because oil demand globally could easily go to 86-88 million bpd during the Winter, and that could easily exceed supply by 2-5 million bpd.[38:53]

Daily Kos: Matthew Simmons-$300/barrel-in 3 months

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