The International Energy Agency needn't bother exhorting OPEC to pump more oil to fuel a global economy that now burns a record 87 million barrels a day. Confidential cables from the U.S. embassy in Saudi Arabia released recently by WikiLeaks confirm what others have long suspected: OPEC's kingpin producer, Saudi Arabia, has little more to give.
The cables from the U.S. embassy in Riyadh cites a number of conversations between embassy personnel and Dr. Sadad Al Husseini, a geologist and former executive vice president of Exploration and Production with Aramco, the Saudi oil monopoly. The former Aramco exploration head contends neither the kingdom's reserve estimates nor future production targets can be believed. According to Husseini, Aramco's estimates of its world-leading reserves are inflated by 40%.
More important, Dr. Husseini acknowledged Saudi production is never likely to get to Aramco's 12.5 million barrel per day level target. Instead the country is struggling to produce even 10 million barrels a day and it may soon encounter a production peak after which flow rates will inevitably decline. Yet the International Energy Agency is counting on Saudi Arabia to produce no less than 14.6 million barrels a day by 2035.
Dr. Husseini's revealing assessment of the Saudi oil industry goes a long way in explaining why President Bush's personal pilgrimage there in 2008 during the height of the last oil crisis was only able to elicit a token 300,000 barrel a day production increase. Other than a limited amount of heavy oil that many of the world' s refineries can't process, the Kingdom has little more to offer today.
Chronic delays in new development and over reporting of reserves by Aramco, paints an illuminating picture of an oil industry that has struggled merely to keep up with depletion. Production is still below the levels reached in the 1970s. And thanks to the Saudi economy's voracious appetite for its own massively subsidized oil, less of its near-peak production is available for export every year.
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?
Still, one way or another the global oil industry will have to produce six million barrels per day more oil than last year to offset the four million barrels per day that is lost to depletion each year, and the nearly two million barrels per day of new crude demand that another year of global economic growth will generate. (Last year, Chinese oil demand alone increased by almost one million barrels a day).
If that supply can't be found, there is only one solution: Higher oil prices will be needed to ration the ever-growing global fuel demand.
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This will probably be the last comment this article ever has and there will continue to be ZERO discussion in the US about the future of the US economy when (not if) Global Peak Oil hits, whether it is this week (blow back from the US veto in the UN) or 2020 or a few years after that.
Apparently massive potential pain causes most people to become deaf, dumb and blind.
Notice how few people have commented on this article.
Notice that it has almost scrolled into oblivion. It is now 0600 GMT and it will be gone by 1200 GMT.
Why isn't this on the front page?
Why can't people understand that almost 100% of everything they eat is transported to them by diesel powered truck and trains and when diesel fuel costs enough, the transportation networks will grind to a halt? Then where will the 75% of the people in the US that live in cities get their food?
In all seriousness, I'm glad this is occurring now. Maybe if prices go up due to lack of supply and increased demand (as opposed to investor-fueled speculation and/or Big Oil price manipulation), we'll finally get serious about other energy alternatives that become much more competitive if gas is floating in the $4 a gallon price range. Oh, and then we can stop spending so much darn military money over in the Middle East, and invest in our country's education, infrastructure, and production economy.
www.offthegridmpls.blogspot.com
[" Our nearly 100 year love affair with the automobile has had enormous consequences"]
Perhaps it is not as much our love affair with the automobile as Big Oil's love of profit
to the point that gas-efficient engine/automobile development has been avoided.
The engineering required for clean and vastly more efficient gasoline engines
is not extremely difficult (compare for example, to sending a manned rocket to the moon)
however that would greatly reduce oil demand and Big Oil profits.
.
What they discovered is that the locals get real unhappy about that resulting in two things:
- killing lots of the invaders.
- destroying the oil production infrastructure so the oil stays in the ground (like money in the bank). It turns out that oil production infrastructure is insanely easy to destroy.
Now the US still doe not have any oil and is trillions of dollars poorer.
If the US had listened to Carter in the 1979s, we would be off oil by now.
The US is now so screwed ...
- No money to develop and deploy alternatives to oil.
- No time left to develop and deploy alternatives to oil.
BTW - the reason Iran wants nuclear power is so most of its internal energy needs are met with non-oil energy leaving most of the oil for export (and high profits).
The recovering economy, growth in China, India and Indonesia, greater allocation of oil for domestic purposes in OPEC countries and declining oil production 38 of the 54 largest oil producing fields are merging together for a perfect oil related energy shortfall in the year 2012 according to many reliable sources.
The Lloyds of London/Chatham House 2010 Energy Report makes the conclusion that all Mideast Oil will be allocated to Opec doemestic use, China, India and Indonesia by 2012. The Chatham House report conclusions were further substantiated by the United States Joint Forces Command Report. A worldwide shortfall of 10 MMBOPD is projected by JOE.
http://www.chathamhouse.org.uk/files/16720_0610_froggatt_lahn.pdf
http://www.jfcom.mil/newslink/storyarchive/2010/JOE_2010_o.pdf
Continued
Fear is outweighing pragmatism at every level of governement and the oil reporting agencies. The International Energy Agency (IEA) has quashed every attempt internally to publically discuss the economic ramifications of Peak Oil. Most oil experts doubt that production will ever reach 89 MMBOPD. Yet, the IEA, since the late 90's, has been lowering its oil production peak nearly every year from 122 MMBOPD to its most recent level of 93 MMBOPD in 2030. The majority of the OPEC members doubled their reserve estimates in order to address OPEC quotas in the late 1980's. See the IEA Failures link below.
The IEA is in agreement that the declining oil fields are declining at the rate of 6 percent per year. The oil industry and geology experts peg the range at 6-9 percent.
http://www.countercurrents.org/badal250510.htm IEA Failures
http://www.theecologist.org/blogs_and_comments/commentators/other_comments/553186/policymakers_recognise_peak_oil_threat_now_they_need_to_deal_with_it.html
- The sales data for oil pretty much documents the oil production.
- Every square meter of the earth has been searched, repeatedly, with every increasing sophisticated tools, so pretty much all the oil has been found. There are no reserves that have not been tapped. If oil can be tapped for a reasonable amount of money it has been tapped.
- The ONLY oil left is the stuff that is extremely difficult and expensive to tap.
The information is out there, but no one wants to believe it, except crazy people like me.
Chavez is one of the USA's "leftest despots", and it has been involved in at lest one coup to remove him, as well as covert funding of his opposition