I spend a lot of time playing "What if?" It is an important aspect of my line of work, but we all do this to some extent. I do it when I am driving - "What if that car at the next intersection pulls out in front of me?" - when I am working "What if that high pressure line ruptures?" - and at home - "What if I wake up and find the house is on fire?" I also spend a lot of time pondering the question "What if there are energy shortages in the near future?"

When we do this, we are generally trying to understand the potential consequences of various responses to a given situation. This sort of exercise is a form of risk assessment, and it is a very important tool for making decisions about events that could impact the future. Sometimes the consequences are minor. If I choose not to take an umbrella to work and it rains, there is probably a small consequence. If I choose to pass a car on a blind hill, the consequence may be severe, and may extend to other people.

In this essay I will explore the implications of the question: "What if I am wrong on peak oil or global warming?"

The June 2009 edition of Oilwatch Monthly can be downloaded at this weblink (PDF, 2.0 MB, 28 pp).

Figure 1 - Iraq crude oil & Liquids fuel production from January 2005 to May 2009.

The Oilwatch Monthly is a newsletter that is available free of charge with the latest data on oil supply, demand, oil stocks, spare capacity and exports. Readers who want to receive the Oilwatch Monthly in their e-mail box each month can subscribe at this weblink, by filling in their first name, last name, email adress and selecting Oilwatch Monthly in the mailing list box. To finalize your subscription push the 'inschrijven' button below the form.

A summary and latest graphics below the fold.

A few months back, Saudi Aramco commissioned a story about the first wells in the Ghawar oil field in Saudi Arabia, the world's largest. With the title "Ghawar's Magnificent Five", it was published first on the Saudi Aramco website but has subsequently appeared elsewhere. Saudi Aramco later published the same article along with the companion piece "Still Going Strong" (subtitled "57-year-old super-giant Ghawar oil field productive as ever") in the Fall 2008 issue of SA Dimensions magazine, also available on their website¹. "Magnificent Five" is the newly minted moniker² for the group of discovery wells, one for each of the five major production areas of Ghawar: 'Ain Dar, Shedgum, Uthmaniyah, Hawiyah, and Haradh. These articles are remarkable in that Saudi Aramco rarely reveals production details for specific wells in Ghawar, but something in this myth-building exercise is amiss -- both in the consistency of the numbers provided and their use as indicators for the state of the wells and the overall field. In this article, I will examine the data provided for these wells and cross check with other available information including satellite imagery available within Google Earth. There is definitely more to the story, and this uncut version is actually more interesting than what Saudi Aramco has released to theaters.

¹http://www.saudiaramco.com. Click Newsroom/Publications/Dimensions.

²The wells' new nickname invokes the grandeur of another movie: The Magnificent Seven. It is noteworthy, though, that most of the seven died prematurely.

Jeff Rubin - the former chief economist at CIBC World Markets - has always struck me as someone who "gets it." I have seen him do a number of interviews, both on television and in print - and he consistently sounds the alarm on peak oil. He understands very well that cheap oil is the lifeblood of the global economy, yet this is an era that will soon come to an end. His new book - Why Your World Is About to Get a Whole Lot Smaller: Oil and the End of Globalization - goes through the peak oil story in a way that I initially thought of as "Kunstleresque", but I changed my mind as I got deeper into the book.