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| 2011 | |
| February | |
| Thu Feb 10 16:39:00 2011 Peak Oil Revisited |
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| Thu Feb 10 16:39:00 2011 Peak Oil Revisited Are oil reserves overstated? |
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| Today I saw another mention of a leaked cable from the
Wikileaks trove. People are apparently publishing new leaked cables all the time as they find
interesting tidbits.
This particular series of leaked cables showed that throughout 2007-2009, US diplomats believed that Saudi Arabia had overstated its crude reserves by up to 40 percent. In particular, a high-ranking executive at Saudi Aramco, the Saudi Arabian national oil company, stated that he believed their reserves were inflated, and he convinced US diplomats and other international energy experts. In general, there have long been suspicions that OPEC countries have inflated their reserves. It has been hard to tell how worried to be: how much of the bump was due to improved measurements or accounting changes, versus more arbitrary changes? The leaked cables are significant because they indicate that even insiders believe the reserves are arbitrary inflated to a large extent. Does this mean we'll suddenly run out of oil? No, there are still around a trillion barrels of proven reserves. But the Saudi/Aramco reserves are most critical because now that Russian production is declining, Saudi Arabia is the only country in the world who is capable of keeping up with the world's growing oil consumption. And the problem with limited reserves isn't that we run out of oil, instead the problem with limited reserves is that the cheap oil runs out quickly, leaving only more expensive oil to be extracted. And so, over time, oil production peaks. The leaked cables indicate that Saudi oil production could peak in the next ten years, which they say is "not good news." Worse, it means global oil production could peak earlier--if it hasn't already. The bottom line? As I've said before ( Peak Oil), expect gas prices to start going up significantly again, and they probably won't come down. Or if they do come down, it will because of further economic recessions, not improved production. So start planning now! Expect gas to hit $5 or even $10 a gallon in the next ten years. If you do a lot of driving, see if you can move nearer to public transit, because you won't want to be driving much. Comments |
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