Peak Oil - When do we start worrying?

With news that OPEC has refused to increase production, I was reminded of this article that I read and bookmarked a while ago. Is OPEC refusing to raise production because it sees no need, as it says, or it can't because there isn't as much oil as it claims.

The problem is that projecting the capacity of Saudi oil production is a tough nut. Ever since the Saudis took control of their national oil company, Aramco, from Western oil companies in 1980, a shroud has dropped over every facet of the kingdom's oil industry. The Saudis release no official data on how their aging fields are holding up, or how well their exploration efforts are going, and their published production totals may not be credible, let alone how much they will be producing a decade from now. As with most OPEC members, Saudi claims of proven reserves have increased steadily since 1980, but most analysts agree that these numbers have been manipulated upward for political reasons related to OPEC production quotas and bear little relation to reality. For oil industry experts, Saudi Arabia is a gigantic black hole, a target of guesswork, not analysis.

And there's this...

The result of his [Matthew Simmons] analysis is Twilight in the Desert, whose title summarizes his conclusion: He thinks Saudi oil production--and therefore world oil production--is in a lot more trouble than anyone is letting on.

Once again, water is at the core of the critique. Of Saudi Arabia's 10 million bpd of oil, about 90 percent comes from a mere seven giant fields, all of them old. Ghawar, a uniquely gigantic field which all by itself accounts for more than half of Saudi Arabia's output, has been in production since 1951. A massive water injection program was begun in the early '60s, and today more than 7 million barrels of seawater are required daily to keep Ghawar going. Even at that, though, the best evidence indicates that Ghawar's production may have already begun declining.

I've no idea when peak Oil will occur, but having a large part of the information hidden from view doesn't make me feel comfortable.

Still, even the peak oil ideologues who make these arguments can't agree on how close the peak actually is. Princeton professor Kenneth Deffeyes jokingly pinpoints the peak on Thanksgiving 2005, Colin Campbell's latest prediction puts the date around 2007, and other peak oil supporters suggest dates anywhere between last year and 2015. As Simmons and others admit (or perhaps warn ominously), we won't know for sure that oil production has peaked until a year or two after it happens.