by Brian Merchant, Brooklyn, New York on 02. 9.11
The most recent Wikileaks cable released by the Guardian has revealed that US diplomats are convinced that Saudi Arabia has overestimated its vaunted oil reserves by a stunning 40%. Saudi Arabia is the world’s largest oil supplier, and is widely believed to be sitting atop the largest supply of the stuff in the world. But this revelation shows that the country may not have enough oil to keep prices from rising drastically over the next couple years.
Here’s the Guardian:
The cables, released by WikiLeaks, urge Washington to take seriously a warning from a senior Saudi government oil executive that the kingdom’s crude oil reserves may have been overstated by as much as 300bn barrels – nearly 40% … Sadad al-Husseini, a geologist and former head of exploration at the Saudi oil monopoly Aramco, met the US consul general in Riyadh in November 2007 and told the US diplomat that Aramco’s 12.5m barrel-a-day capacity– needed to keep a lid on prices– could not be reached.
According to the cables, which date between 2007-09, Husseini said Saudi Arabia might reach an output of 12m barrels a day in 10 years but before then – possibly as early as 2012 – global oil production would have hit its highest point.
By the Saudi geologist’s estimation, that means that the world may hit peak oil next year. This won’t surprise many peak oilers who’ve long suggested we surpassed peak oil already, or those who’ve been predicting the event to occur this decade. Even the US military has openly predicted that the world may see severe oil shortages as soon as 2015.
But hitting peak oil as soon as next year would have a momentous impact on the global economy, which is still extremely dependent on oil. As we speak, oil prices are creeping above the $100 a barrel mark. As usual, analysts have counted on the Middle Eastern nation to pump additional oil if the prices rise high enough, and threaten to choke off demand, as the Guardian notes. But this cable suggests the era when Saudi Arabia can stabilize oil demand is well past its twilight.
There has never been a better and more urgent reason to begin a serious push for renewable energy and alternative fuels — it’s time to take serious action to eliminate our dependence on oil once and for all.