Saudi Arabia Bullish On Oil's Future

(CBS)  The good news is that the price of oil is falling - a lot; it's also the bad news if you're determined that the U.S. should kick its addiction to foreign oil. President-elect Barack Obama says now is the time to do that, even with the economy in recession.

But Saudi Arabia, the world's largest oil supplier - with the U.S. as its number one customer - is pulling all the levers and spending billions to keep the oil age going.

60 Minutes correspondent Lesley Stahl went to Saudi Arabia a few weeks ago to meet one of the most powerful men in the world, Ali Al-Naimi, the Saudi oil minister and de facto head of the OPEC oil cartel.

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"If most Americans had an opportunity to sit down with the oil minister of Saudi Arabia, the thing they would like to know is where you think the price of oil's gonna be, say, in about six months. Is it gonna be up or down?" Stahl asked.

"You want my classic answer?" Al-Naimi replied.

"No. I want your honest appraisal…and your judgment," Stahl asked.

"My honest judgment is if I were to know what the price of oil six months from now, I would be in Las Vegas. Okay?" Al-Naimi said, smiling.

He may be smiling, but this is a man with serious heartburn and vertigo. The price of oil has been soaring and sinking up and down uncontrollably. Asked why oil prices spiked to $147 a barrel in July, Al-Naimi told Stahl, "Basically, there was what's called a 'fear premium.'"

"And the fear was that Saudi Arabia itself had peaked out. That you'd reached your ceiling of how much available oil is left in your overall reserve. So, what's the truth?" Stahl asked.

"The truth is here is the kingdom with more than 260 billion barrels. And I firmly believe that the potential to add another 200 billion barrels of oil are there to be found," Al-Naimi said.

If the oil minister of Saudi Arabia had one message, it was that there is no need for those fears.

And to make the point, the Saudis let 60 Minutes see facilities that will increase the country's capacity from about 10 million barrels a day to more than 12 million. And they're going to the ends of the Earth to do it.

One of those desolate places is Shaybah, a desert wilderness where temperatures can reach 135 degrees. The Saudis say that 18 billion barrels of oil lie beneath the red sand dunes, more than four times the proven reserves of Alaska.

To tap into it, the kingdom's national oil company, Saudi Aramco, had to build an oasis there. Awayyid Al-Shammari oversees the mega-project at Shaybah, an area of the kingdom known as the "Empty Quarter."

"We're on soft sand. We're not talking about a hard surface here," Stahl remarked.

"Yeah," Al-Shammari acknowledged. "The logistics are impossible. The first thing we had to do is build our own road in order to access this field."

"Once that was done, we had to remove one hundred million cubic feet of sand just to make the runway that we are currently using," he explained. "We had to remove a sand dune in order to connect two flat areas to do that."

Al-Shammari said they also had to build a pipeline 400 miles in length. "And you can imagine the challenge of building that pipeline in a topography like this."

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[zeitgeist5000]

After reading some of the comments, we seem to be mired in either denial or racism. Myopia is also rampant, it is better to belive in sylph than some of the ideas and leadership we have thus far depended on to solve our problems of over consumption, waste and meaga-profits. We do and say anything to earn more and more money that we don't need, the fact that this is probably the end. I Believe that we have passed the tipping point and planet earth is now progressing toward the reduction of man's footprint effect.

We deserve nothing else no other fate but this. We have learnt nothing from the past and it is written that ignorance can be taught however, stupidity lasts forever.

Most of like to think that placing a small plaster on a bullet wound will not only allow the wound to heal but prevent future bullets from doing what bullets are designed to do.

Too many people have died, too many have tried to tell us that we needed to change, the truth is Obama is the best choice for medium to longterm change, sadly, he cannot do it alone and alone he will be. His contribution to our global problems is small, we are all to blame and must therefore claim our share. The the thing is we have become too fat to care, too used to the creature comforts and this as a result, is it. The party is nearing its end, in the distance, I can hear a Fat Lady walking up the steps to take the stage for our final performance. Well done.

Bravo.

[john052259]

Is Lesley Stahl really as uneducated about world energy as she appeared in her interviews or is she just trying to provoke the Saudis to say something scandalous?

Many compliments to the Saudi speakers who logically presented their story and calmly answered the ridiculous questions Stahl kept asking.

Does Stahl think the Saudis should just give us their oil for the good of the world? Do we in the US give away everything we produce? Does China or anyone else?

Come on 60 minutes, use someone with some knowledge of the realities of the global energy situation next time you do a story on oil. Even Obama stated during his campaign offshore drilling in the US would not begin to cover our needs.

You should republish this story and edit out all the footage of Lesley Stahl. Then you have a pretty interesting story.

I''m certainly more optimistic now about our ability to have enough time to foster alternative fuels before fossil fuels become too expensive.

[grandma_king]

I haven''t watched 60 minutes for many, many years but wanted to watch this Saudi interview. Now I remember why I haven''t watched it for years. Leslie was arrogant and insulting to the hosts and deserves to be blocked from visiting that country and all others because that''s just who she is. You reporters are so one-sided and closed minded, and can''t see anything but your own agenda.

[sflaks]

That was a terrible interview Leslie Stahl did. She seemed to be gaga over saudi technology never once mentioning their civil rights abuses, Madras that teach hate and the fact that almost all the 911 bombers were Saudis. In an interview that talked a lot about Saudi oil and the US she never talked about the fact that a lot of Americans would like to get away from Saudi oil because we dont like the way they treat women and seem to be breeding terrorists. Its times like this that we could use a Mike Wallace style interview and not a Larry king style interview.

[rstcbsnews]

Hmmm...we are releasing "vast amounts of carbon"?. I heard recently that only 4% is because of man, and most released right out of the ground (and we can''t reliably model that yet).

I think they are right about one thing. The politicians are making this oil thing, the next "War on drugs (or crime or whatever grabs the headlinesl like global warming). Where are the alternatives really?

Economics will change our behavior, let them get the price to $75. That is still low enough to keep Iran and Russia from rebuilding their military. But high enough to make us want to use the alternatives.,

[closethippy1]

I have to say that I''m amazed at how no matter Arab professionals try to reason with Americans there''s always people trying to point out all the negatives of Arab society in the same way Bin Laden and his ilk will tell you how sick American society is because of the high rate of sexually transmitted disease, or whatever.
There''s good and bad everywhere, isn''t there? OK, then, let''s for once get serious, learn to listen to each other so we can help each other out without getting defensive about it and give the hillbillies on both sides more reason to screw things up.

[mesned-2009]

Aramco will be better off if we kicks all the infidels out of the Kingdom and jack the oil price to $500!

[jsherman2000]

Did you guys forget who is behind the 911 attacks and whose financially supported those terrorists?

[jsherman2000]

Who the hek are these guys that trying to suck our $$$ from our land & polluted our air?
Saudi loves to brag but in reality all they have is the oil (which will run out in 30 yrs). Stupid terrorist supporters!!! Their next generation will eat sand for breakfast. Let use our alternative fuels & stop depend on their oil!

[zlevay]

I was amazed how sympathetic 60 Minutes was to the Saudi development of their oil resources. Ms Stahl seemed duly awed by Aramco''s vast, high-tech development and the larger-than-life Oil Minister. But she made only a brief, offhand reference to any opposition to their seemingly divine right to their extracting and our burning of every drop of petroleum, no matter the cost of extraction. There are in fact many serious, varied, global consequences to this activity to which the Saudis seem to be burying their heads in their plentiful sand. Perhaps they are considering these things, but we wouldn''t know that from the way the interview was conducted and edited. Aramco surely will reap great profit from their venture, no matter the expense, because nobody has come up with a cheaper alternative to oil. But we are ignoring, as always, the hidden, unquantifiable costs of unleashing vast stores of carbon. The only reference to that was a dismissive, practically sneering mention of Al Gore.

I applaud the Saudis for starting to develop renewable resources such as wind and solar power generation. I eagerly look forward to a future 60 Minutes piece on their development of awe-inspiring factories costing many billions of dollars turning out square miles of solar cells to provide clean, renewable power. I hope such a piece will include investigation of all the costs and benefits in such an endeavor, political, economic, social, etc.