Well, this should really come as absolutely no surprise, Saudi Arabia’s got a lot less oil than its been saying. And what that means, of course, is that prices will keep on rising (perhaps more and more steeply) and we need to get moving towards some sort of alternative… hmm, cleantech?
The cables that have revealed this information were released to 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%,” John Vidal of the Guardian reports.
While analysts believe that Saudi Arabia and its Opec cartel partners can pump more oil to lower prices for a short time if demand starts to get cut off from the recent oil price increases, this finding points to the long-term inability to keep oil prices low.
Whether we want to wake up to the fact or not, oil is running out.
According to the cables, peak oil could be hit as early as 2012. Which is, more or less, in line with what everyone informed on the matter has been saying, give or take a couple years.
One cable on the topic lays out what gives (why the overstated supply):
According to al-Husseini, the crux of the issue is twofold. First, it is possible that Saudi reserves are not as bountiful as sometimes described, and the timeline for their production not as unrestrained as Aramco and energy optimists would like to portray. In a December 1 presentation at an Aramco Drilling Symposium, Abdallah al-Saif, current Aramco Senior Vice President for Exploration and Production, reported that Aramco has 716 billion barrels (bbls) of total reserves, of which 51 percent are recoverable. He then offered the promising forecast – based on historical trends – that in 20 years, Aramco will have over 900 billion barrels of total reserves, and future technology will allow for 70 percent recovery.
Al-Husseini disagrees with this analysis, as he believes that Aramco’s reserves are overstated by as much as 300 billion bbls of “speculative resources.” He instead focuses on original proven reserves, oil that has already been produced or which is available for exploitation based on current technology. All parties estimate this amount to be approximately 360 billion bbls. In al-Husseini’s view, once 50 percent depletion of original proven reserves has been reached and the 180 billion bbls threshold crossed, a slow but steady output decline will ensue and no amount of effort will be able to stop it.
Really, given the rate at which oil companies were able to improve and pump oil out of the ground, it is no surprise they overestimated what they’d be able to do in the future. Of course, the future is long gone, and everyone knows we’re in a pickle now. (Well, maybe everyone but most of our members of Congress and the right wing media,… which, ironically, is owned in quite large part by a certain Saudi Kingpin.)
Image Credit: madaboutasia
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