The Saudi's on Saudi [60 MINUTES VIDEO]

The interviewer goes ga-ga over some of the admittedly impressive projects, however some of the claims are pretty outlandish - for example that one particular field will last 50 years, and that Saudi oil costs $2 to produce. The project they showcase involves a 150 miles pipeline to pump sea water into the field. The input costs of shifting the sand and building the roads must have been immense - and the field has not yet pumped a single barrel of oil. $2 eh?

The other aspect is that with the world's biggest fields depleting at 9.1% it is fields like these that make up some of the deficit (not all). The impression created by the Saudi's is that there is plenty of oil, plenty of surplus, and that they will decide how much to supply.

During many previous demand spikes they have promised to increase supply and not done so. The reality is that there is no excess capacity - not from Saudi Arabia or elsewhere. The reality is that there is depletion worldwide of this resource, and right now the crash in demand is temporarily a smokescreen for what will manifest probably in 2009 as a series of supply crunches and shocks.

Kunstler:
Judging by Lesley Stahl's utterly idiotic report on the Saudi Arabian oil industry in this week's "60 Minutes," the flagship of the mainstream media still doesn't get it, and almost certainly the viewing public will once again draw all the wrong conclusions.

Stahl batted her eyelashes and wrinkled her nose at a series of Saudi oil officials, who completely hosed her about their production prospects, their reserves, and the world's ability to keep industrial society running in its current form on Saudi oil for decades to come. Nobody outside the Saudi system was even interviewed to provide an alternate view. This report was unworthy of a major news-gathering organization.