Cables recently released by Wikileaks confirm that Aramco, the Saudi oil monopoly, has likely been grossly over-estimating their oil reserves. And so, while the U.S. is hoping Saudi Arabia can boost production to 14.6 million barrels of oil a day by 2035, they are currently struggling to pump out 10 million barrels a day and it looks highly unlikely that they will ever again be able to go any higher than that.
It’s something that peak oil alarmists have been hollering about for years now. And have been written off as conspiracy nuts and doomists for their troubles.
Meanwhile, the G&M wonders….
While the U.S. embassy cables acknowledge Saudi Arabia still has the capacity to raise prices should it withhold supply, it no longer has the capacity to prevent prices from rising because it can’t boost production sufficiently to meet world demand.
If Saudi Arabia no longer has an ability to raise production, who does?
Who? No one. Duh.
Saudia Arabia had the largest reserves of oil on the planet. Discoveries of new oil reserves have been dropping off precipitously since 1964. There is no massive, Saudi-style oil pocket waiting to be discovered.
If Saudi Arabia reaches peak oil, the world reaches peak oil. End of story.
And that is very, very bad news. The only solution left to us will be reducing our dependence on oil And that means more urban density, more efficient vehicles, more development of alternative energy sources. All things that environmentalists have been hollering about for
years decades now. And have been written off as humanity-haters and tree-hugging loons for their troubles.
Thing is, once oil prices start to shoot upwards as the reality of peak oil starts to sink in, we’re going to discover that all the solutions to the oil-scarcity problem will be getting more and more expensive. We’re going to need a lot of oil to build all that post-oil infrastructure. But less and less of it is going to be available for things like, you know, rescuing society from a massive catastrophe.
It’s sad, really. We know what we need to do to solve the problem and we have the technology on hand to pull it off. Maybe, if we’d heeded the doomists and tree-huggers a while back — like, say, in the 70s — we could have had a nice, smooth transition away from oil. Instead we burned it up like there’s no tomorrow so that now, if the cables are right and Saudi is actually at or near its production peak, we have precious few oil-rich tomorrows left.