As far back as 2004, there was worry that the Saudis were fudging on how much oil they still had in the ground. Thanks to Wikileaks, we now have a little better idea. The Guardian:
The US fears that Saudi Arabia, the world's largest crude oil exporter, may not have enough reserves to prevent oil prices escalating, confidential cables from its embassy in Riyadh show.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%.
The revelation comes as the oil price has soared in recent weeks to more than $100 a barrel on global demand and tensions in the Middle East. Many analysts expect that the Saudis and their Opec cartel partners would pump more oil if rising prices threatened to choke off demand.
However, 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. This crunch point is known as "peak oil".
Husseini said that at that point Aramco would not be able to stop the rise of global oil prices because the Saudi energy industry had overstated its recoverable reserves to spur foreign investment. He argued that Aramco had badly underestimated the time needed to bring new oil on tap.
In other words, if there's a war between Israel and Iran, our goose is cooked. Saudi Arabia will be unable to pump enough oil to materially affect the price of a barrel of oil which could lead to nightmare prices exceeding $300 bbl.
Meanwhile, caribou graze peacefully in ANWR and Gulf oil rigs are being sent elsewhere because we have an administration that is allergic to crude oil. They break out in hives anytime someone mentions drilling.
In other news, solar plants are closing and no new nuclear plants are planned for the foreseeable future.
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