Dispatches released by WikiLeaks last Tuesday revealed troubling secrets behind the government’s pleads to stay calm over rising oil prices. It turns out that Saudi Arabia may not be able to produce enough oil to cap prices after all. This is dire news for an oil-dependent world.
Confidential cables recorded in 2007 from the U.S. embassy in Riyadh reveal serious warnings from a Saudi government oil executive that their oil reserves may have been overstated by as much as 40 percent. This news comes after soaring oil prices amid the recent spike in Middle East conflict.
The Guardian reports that the U.S. and Saudi national oil company, Saudi Aramco, were in a $50billion investment deal aiming to increase Saudi’s daily production capacity from 9.5 million barrels a day to 12.5m by 2009. Sadad Al-Husseini, former board member of Saudi Aramco, told U.S. officials he believed this would be an impossible target to achieve before 10 years.
At today’s rate of use, there is still enough oil to last the next 42 years. However, given the rate of economic growth in fast developing countries such as China and India, consumption is sure to rise. In the cable, Al-Husseini goes on to estimate that before 10 years, even as early as 2012, global production would have hit the highest level it ever will, and the prices of oil will soar with peaking levels of demand.
Perhaps the most troubling part of the cable is when Al-Husseini admits that the Saudi oil industry was overestimating its recoverable reserves to encourage foreign investment while simultaneously underestimating the time needed for more oil on tap.
Scientific suspicions of overstated oil reserves are now confirmed, we have less oil than we thought, and to make it worse, we need more and more.
(For data on the world’s oil reserves, click here.)
The highly controversial debate over the reality of peak oil should be long over. Peak oil, the point at which the maximum amount of oil can be produced, is not theory, but fact. Oil is a finite resource, and with Saudi Arabia, the world’s number one producer admitting that they actually have less than we were told, we have likely seen the final days of cheap oil.
While no government official has come close to publically admitting these facts in public, this comes to no surprise to green activists and international news followers. When the government and powerful multinational corporations have a stake in suppressing public concern, we expect lies hidden behind their calm facades and confident rhetoric surrounding diplomatic relations, climate change, and oil concerns in the Middle East.
Unless we expand global efforts to invest in renewable energy and end our dependency on limited resources now, our children will face unimaginable crises once our main oil reserves are depleted and the scramble for whatever is left comes into play.
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