Tuesday, January 23, 2007

Book Report: Twilight in the Desert

Twilight in the Desert is Matthew Simmons' extended argument that the days of cheap and easy oil in Saudi Arabia are rapidly coming to an end.

He seems to put forth a devastating case. He argues that contrary to popular opinion, the Saudis don't have the ability to increase their supply if and when world demand increases. He notes that so much of the nation's oil comes from a handful of aging fields that, if history and other oil fields are any guide, will soon go into rapid decline. He also argues that there are very few fields waiting in reserve that will be able to replace these "super giants" when they run out of oil.

I thought it was fairly ironic that I was reading this book as the worldwide price of oil plummeted to a two-year low.

My biggest qualm with the book is that it is too ambitious. Simmons wanted to write a book that convinced energy insiders and engineers that his research was correct. He also wanted to write a book that accomplished the same thing for educated, but uninitiated, readers. Consequently, it makes it difficult for those of us with no background in oil or engineering to truly engage in a conversation with the book. Simmons may be right, or it may be that I'm too ignorant to see his faults. I've read a few reviews of the book; generally it seems that financial publications really liked it, while scientific reviews were more skeptical.

Simmons also didn't address the one great question I had while reading the book. If he is correct, and Saudi oil is going to decline in the near future, why are the Saudis dismissing his report and claiming they have enough oil to satisfy the world for the next 30 years? If they were truly running low, wouldn't it be in their best interests for the world to accept that? It would certainly drive up the price of oil and allow the Saudis to maximize the value of the oil they have left. Maybe I'm mising something, but that was the one question that i felt was left hanging.

Ultimately, I can only recommend the book if you're already interested in the topic. Otherwise, it's too frustarting.

Up Next: America Alone, Mark Steyn's doom-mongering on the rise of Islamism in Europe and his recognition that only America will have the spine to combat it.

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