ABIOTIC OIL, PEAK OIL, AND SAUDI ARABIANovember 6, 2015
Over the past few weeks I've been drawing attention to the growing crisis facing Saudi Arabia, a crisis exacerbated in part by Russia's intervention in Syria. Regular readers will recall that I even blogged about recent Saudi overtures to Russia, in some versions, even holding out a membership in OPEC to that country.
Russia is in a unique position regarding the entire global petroleum industry, for it is the one country that self-consciously, and deliberately, decided to scientifically test the idea that hydrocarbons were "fossil fuels", a hypothesis that came up wanting during the period that the Soviet Union was investigating and testing this hypothesis.
All this brings us to a very intriguing article shared by Ms. M.W., from Mr. F. William Engdahl, on the origins of the Soviet research, and its geopolitical implications:
COnsider just the discovery of new energy fields summarized by Mr. Engdahl:
In 2006 Brazil’s Petrobras made the largest offshore oil discovery of the last 30 years, holding at least 8 billion barrels of oil in the Santos Basin 250 kilometers from Rio de Janiero. Then-President Lula da Silva proclaimed it would give the “second independence” for Brazil, that from Western oil imports. In 2008 nearby Petrobras, a state company, discovered an equally large natural gas field called Jupiter near their Santos oil discovery. Under Lula’s presidency, the Parliament passed measures to insure oil development would remain in Brazilian hands under Petrobras and not in those of the American and British or other foreign oil majors. In May 2013 after Lula retired and was succeeded by Dilma Rousseff as President, US Vice President Joe Biden flew to Brazil to meet with her and the heads of Petrobras. According to Brazilian sources, Biden demanded Rousseff remove the laws that kept American oil majors from controlling the huge oil and gas finds. She politely declined and soon after she was hit with a major US Color Revolution destabilization that continues to this day, not surprising, with a scandal around Petrobras at the center.
More recently, Iceland, recovering from her banking crisis, began seriously looking offshore for oil and gas in the Jan Mayen Ridge north of the Arctic Circle in 2012. The geophysics are the same as offshore North Sea and one Icelandic former senior government official told me during a visit some five years ago that a private geological survey indicated Iceland could be a new Norway. According to the US Geological Survey, the Arctic could hold 90 billion barrels of oil, most of which is untapped. China made Iceland a key partner, and the two signed a free-trade agreement in 2013 after China’s CNOOC signed an offshore joint venture in 2012 to explore the offshore.
In April 2015 the energy exploration firm UK Oil & Gas Investments announced it had drilled near Gatwick Airport and found what they estimated could be up to 100 billion barrels of new oil. By comparison the entire North Sea has yielded some 45 billion barrels in 40 years. As well in May, UK oil company Rockhopper announced a new oil discovery in the disputed waters of the Falkland Islands offshore of Argentina believed to contain up to one billion barrels of oil.
Now in August, 2015 the Italian oil company ENI announced discovery of a supergiant gas field in the Egyptian offshore, the largest ever found in the Mediterranean Sea, larger than Israel’s Leviathan. The company announced the field could hold a potential of 30 trillion cubic feet of lean gas in place covering an area of about 100 square kilometres. Zohr is the largest gas discovery ever made in Egypt and in the Mediterranean Sea.
There are huge undeveloped oil and gas reserves in the Caribbean, the area of an impact crater that made numerous fissures and where three active tectonic plates come together and part. Haiti is one such region, as is Cuba. In May the Cuban government released a study that estimated Cuba’s offshore territorial waters held some 20 billion barrels of oil. Russia’s oil subsidiary, Gazprom Neft, has already invested in one section in Cuban waters, and during Russian President Putin’s July, 2014 visit to Havana in which Russia cancelled 90% of Cuban Soviet-era debt worth some $32 billion, Igor Sechin, the CEO of Russia’s state-owned Rosneft, the world’s largest oil company, signed an agreement with Cupet, the Cuban state oil company, to jointly explore the basin off Cuba’s northeast coast. That Russian participation in the huge Cuban oil search might explain the sudden rush of the Obama Administration to “warm up” relations with Cuba.
In addition to this, however, there's the Cold War era Soviet research into the whole notion of "fossil fuels":
In the 1950s a group of Soviet scientists was tasked with making the USSR self-sufficient in oil and gas as the Cold War heated up. The first step in their research was to critically investigate all known scientific literature on origins of hydrocarbons. As they looked closely at the so-called fossil fuel theory of oil, they were amazed how unscientific it was. One physicist estimated that for the huge oil that has come out of one giant well, Ghawar, in Saudi Arabia, it would require a block of dead dinosaurs, assuming 100% conversion of meat and bone to oil, that would reach 19 miles wide, deep and high. They soon looked for other explanations for the birth of oil.
They made exhaustive tests in the deep-earth research labs in Moscow of the Soviet military. They developed the brilliant hypothesis that oil was constantly being created deep in the bowels of the Earth below the mantle. It pushes upward towards the surface passing through beds of various elements such as ferrite. They did repeated laboratory experiments producing hydrocarbons under tempetrature and pressure imitating that in the mantle. These migration channels, as the Soviet scientists termed them, were fissures in the mantle caused over millions of years under the expanding of the earth and forced by the enormous temperatures and pressures inside the mantle. The path the initial methane gas takes upwards towards the surface determines whether it emerges and collects as oil or as gas, as coal, as bitumen as in Canada’s Athabasca Tar Sands, or even as diamonds which are also hydrocarbons. The Russian and Ukrainian scientists also discovered, not surprisingly, that every giant oilfield was “self-replentishing,” that is new oil or gas is being constantly pushed up from inside the mantle via the faults or migration channels to replace oil withdrawn. Old oilwells across Russia that were pumped far beyond their natural full rate during the end of the Soviet era when maximum production was considered highest priority, were then shut, considered exhausted. Twenty years later, according to Russian geophysicists I have spoken with, those “depleted” wells are being reopened and, lo and behold, completely refilled with new oil.
So what prevents these resources from being developed? Recall that just a few years ago, as oil prices were high, the USA had expanded its oil production in North Dakota, producing jobs, and actually for a period becoming an equal producer of oil with one of the world's most loathsome regimes, whose wealthy princes hypocitically smoke cigars and imbibe alcohol, while simultaneously supporting a medieval regime of head-chopping, limb-amputating, and even crucifixion to maintain its grip on power at tome. The result has been geopolitically and financially predictable, according to Mr. Engdahl::
Today a geopolitical decision by Saudi Arabia to wipe out the market-disturbing recent emergence of the United States as world’s largest oil producer owing to the major increase in shale oil production, has temporarily collapsed world oil prices from over $100 a barrel in July 2014 to around $43 today in the US market. That is leading to a dramatic cut-back in oil exploration around the world. In a fair world, oil or gas should be available at affordable prices to every nation to serve its own energy requirements and not the monopoly of a tiny cartel of British or American companies. Good to know is the fact that the oil and gas are there in super-abundance that we need not freeze in the dark or turn to windmills until the time mankind develops completely different forms of energy that are clean and earth-friendly. Wars to control oil or gas would become silly nonsense.
As I have blogged previously, the regime in Riyadh is under severe internal and external pressures, oil being its one and only viable export to the world; it has absolutely nothing else - absolutely nothing - else to offer. Russia does not need the Middle East's oil or gas, niether from Riyadh or Tehran. China might, but one can only assume that China has been long aware of the Soviet era research, and is similarly exploring for its own energy supplies.
Additionally, recent energy advances - think only of our recent articles here on the awarding of a USA patent to Dr. Andrea Rossi and his cold fusion technique - ultimately spell the end of the oil-based hydrocarbon energy systems that the world has lived with(or under) for the last century and more. Even the mullahs in Tehran understand this long term implication. So another alternative for combatting Islamicist terrorism presents itself: cut off its source of funding, by developing those energy resources. There's no need to be dependent upon Saudi oil, and additionally, this might afford the West a means to deal with China, by becoming suppliers to its growing energy needs. Imagine, for a high-octane-speculation moment, what a kind of BRICSA equivalent to OPEC - with the UK, Brazil, Iceland, the USA, Saudi membership prohibitted - might accomplish.
See you on the flip side...