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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.

One cable said: "According to al-Husseini, the crux of the issue is twofold. First, it is possible that Saudi reserves are not as bountiful as sometimes described, and the timeline for their production not as unrestrained as Aramco and energy optimists would like to portray."

It went on: "In a presentation, Abdallah al-Saif, current Aramco senior vice-president for exploration, reported that Aramco has 716bn barrels of total reserves, of which 51% are recoverable, and that in 20 years Aramco will have 900bn barrels of reserves.

"Al-Husseini disagrees with this analysis, believing Aramco's reserves are overstated by as much as 300bn barrels. In his view once 50% of original proven reserves has been reached … a steady output in decline will ensue and no amount of effort will be able to stop it. He believes that what will result is a plateau in total output that will last approximately 15 years followed by decreasing output."

The US consul then told Washington: "While al-Husseini fundamentally contradicts the Aramco company line, he is no doomsday theorist. His pedigree, experience and outlook demand that his predictions be thoughtfully considered."

Seven months later, the US embassy in Riyadh went further in two more cables. "Our mission now questions how much the Saudis can now substantively influence the crude markets over the long term. Clearly they can drive prices up, but we question whether they any longer have the power to drive prices down for a prolonged period."

A fourth cable, in October 2009, claimed that escalating electricity demand by Saudi Arabia may further constrain Saudi oil exports. "Demand [for electricity] is expected to grow 10% a year over the next decade as a result of population and economic growth. As a result it will need to double its generation capacity to 68,000MW in 2018," it said.

It also reported major project delays and accidents as "evidence that the Saudi Aramco is having to run harder to stay in place – to replace the decline in existing production." While fears of premature "peak oil" and Saudi production problems had been expressed before, no US official has come close to saying this in public.

In the last two years, other senior energy analysts have backed Husseini. Fatih Birol, chief economist to the International Energy Agency, told the Guardian last year that conventional crude output could plateau in 2020, a development that was "not good news" for a world still heavily dependent on petroleum.

Jeremy Leggett, convenor of the UK Industry Taskforce on Peak Oil and Energy Security, said: "We are asleep at the wheel here: choosing to ignore a threat to the global economy that is quite as bad as the credit crunch, quite possibly worse."

Cluck U wrote:Still waiting for the damaging leaks that have inspired some to call for Assange's head.

I'm a big boy...let me see the light and make informed decisions.

For those of you who can't handle reality and want to remain in the dark...because those goverment folks should be left alone to manage things with their brilliant track record of making fair, people-oriented decisions...send me a PM and give me your addresses and I'll send a night light and a teddy bear for you to cuddle up with before you go to bed.

F the Saudis and oil companies.

Tax dollars should be going towards American energy resources...especially renewable ones. Let the Middle East go back to being a sand lot.

Skjellyfetti wrote:

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.

One cable said: "According to al-Husseini, the crux of the issue is twofold. First, it is possible that Saudi reserves are not as bountiful as sometimes described, and the timeline for their production not as unrestrained as Aramco and energy optimists would like to portray."

It went on: "In a presentation, Abdallah al-Saif, current Aramco senior vice-president for exploration, reported that Aramco has 716bn barrels of total reserves, of which 51% are recoverable, and that in 20 years Aramco will have 900bn barrels of reserves.

"Al-Husseini disagrees with this analysis, believing Aramco's reserves are overstated by as much as 300bn barrels. In his view once 50% of original proven reserves has been reached … a steady output in decline will ensue and no amount of effort will be able to stop it. He believes that what will result is a plateau in total output that will last approximately 15 years followed by decreasing output."

The US consul then told Washington: "While al-Husseini fundamentally contradicts the Aramco company line, he is no doomsday theorist. His pedigree, experience and outlook demand that his predictions be thoughtfully considered."

Seven months later, the US embassy in Riyadh went further in two more cables. "Our mission now questions how much the Saudis can now substantively influence the crude markets over the long term. Clearly they can drive prices up, but we question whether they any longer have the power to drive prices down for a prolonged period."

A fourth cable, in October 2009, claimed that escalating electricity demand by Saudi Arabia may further constrain Saudi oil exports. "Demand [for electricity] is expected to grow 10% a year over the next decade as a result of population and economic growth. As a result it will need to double its generation capacity to 68,000MW in 2018," it said.

It also reported major project delays and accidents as "evidence that the Saudi Aramco is having to run harder to stay in place – to replace the decline in existing production." While fears of premature "peak oil" and Saudi production problems had been expressed before, no US official has come close to saying this in public.

In the last two years, other senior energy analysts have backed Husseini. Fatih Birol, chief economist to the International Energy Agency, told the Guardian last year that conventional crude output could plateau in 2020, a development that was "not good news" for a world still heavily dependent on petroleum.

Jeremy Leggett, convenor of the UK Industry Taskforce on Peak Oil and Energy Security, said: "We are asleep at the wheel here: choosing to ignore a threat to the global economy that is quite as bad as the credit crunch, quite possibly worse."

http://www.guardian.co.uk/business/2011 ... -wikileaks" onclick="window.open(this.href);return false;

Cluck U wrote:Still waiting for the damaging leaks that have inspired some to call for Assange's head.

I'm a big boy...let me see the light and make informed decisions.

For those of you who can't handle reality and want to remain in the dark...because those goverment folks should be left alone to manage things with their brilliant track record of making fair, people-oriented decisions...send me a PM and give me your addresses and I'll send a night light and a teddy bear for you to cuddle up with before you go to bed.

F the Saudis and oil companies.

Tax dollars should be going towards American energy resources...especially renewable ones. Let the Middle East go back to being a sand lot.

CID1990 wrote:

Cluck U wrote:Still waiting for the damaging leaks that have inspired some to call for Assange's head.

I'm a big boy...let me see the light and make informed decisions.

For those of you who can't handle reality and want to remain in the dark...because those goverment folks should be left alone to manage things with their brilliant track record of making fair, people-oriented decisions...send me a PM and give me your addresses and I'll send a night light and a teddy bear for you to cuddle up with before you go to bed.

F the Saudis and oil companies.

Tax dollars should be going towards American energy resources...especially renewable ones. Let the Middle East go back to being a sand lot.

OK, I feel the need to hijack for a moment.

What renewable sources would you be referring to? You surely cannot be talking about wind and solar?

I do nto disagree with you about the Middle East, but I also think we need to be realistic about those 'renewable energy' sources you speak of. The very term is becoming the 'domino theory' of the left.

CID1990 wrote:

Cluck U wrote:Still waiting for the damaging leaks that have inspired some to call for Assange's head.

I'm a big boy...let me see the light and make informed decisions.

For those of you who can't handle reality and want to remain in the dark...because those goverment folks should be left alone to manage things with their brilliant track record of making fair, people-oriented decisions...send me a PM and give me your addresses and I'll send a night light and a teddy bear for you to cuddle up with before you go to bed.

F the Saudis and oil companies.

Tax dollars should be going towards American energy resources...especially renewable ones. Let the Middle East go back to being a sand lot.

OK, I feel the need to hijack for a moment.

What renewable sources would you be referring to? You surely cannot be talking about wind and solar?

I do nto disagree with you about the Middle East, but I also think we need to be realistic about those 'renewable energy' sources you speak of. The very term is becoming the 'domino theory' of the left.

blueballs wrote:I don't consider myself a genius by any means but even I'm smart enough to know that if there was a feasible green energy source the billions and billions (like my Carl Sagan imitation) of dollars of investment capital worldwide just sitting on the sidelines and available would be going there but they're not. Seems like only governments, who are not accountable to shareholders and directors and don't have to compete to produce a return on their investments seem to invest in the green energy sources. Anybody care to explain that?

houndawg wrote:

blueballs wrote:I don't consider myself a genius by any means but even I'm smart enough to know that if there was a feasible green energy source the billions and billions (like my Carl Sagan imitation) of dollars of investment capital worldwide just sitting on the sidelines and available would be going there but they're not. Seems like only governments, who are not accountable to shareholders and directors and don't have to compete to produce a return on their investments seem to invest in the green energy sources. Anybody care to explain that?

They haven't figured out how to run a sunbeam through an electric meter yet.

houndawg wrote:

blueballs wrote:I don't consider myself a genius by any means but even I'm smart enough to know that if there was a feasible green energy source the billions and billions (like my Carl Sagan imitation) of dollars of investment capital worldwide just sitting on the sidelines and available would be going there but they're not. Seems like only governments, who are not accountable to shareholders and directors and don't have to compete to produce a return on their investments seem to invest in the green energy sources. Anybody care to explain that?

They haven't figured out how to run a sunbeam through an electric meter yet.

travelinman67 wrote:

houndawg wrote:

They haven't figured out how to run a sunbeam through an electric meter yet.

Yet, paradoxically, industry seems to find profit in producing other durables/consumables. Those damn industry dunces are missing this golden opportunity.

houndawg wrote:

travelinman67 wrote:
Yet, paradoxically, industry seems to find profit in producing other durables/consumables. Those damn industry dunces are missing this golden opportunity.

Not at all, T-ster, the they just want to socialize risk before they privatize the profit.


More solar energy falls on the planet in an hour than the entire population uses in a year.

travelinman67 wrote:

houndawg wrote:
Not at all, T-ster, the they just want to socialize risk before they privatize the profit.


More solar energy falls on the planet in an hour than the entire population uses in a year.

With billions in taxpayer funded subsidies being thrown at this boondoggle by the Progressives, I'd say that "socialization" has ALREADY taken place.

houndawg wrote:

travelinman67 wrote:
With billions in taxpayer funded subsidies being thrown at this boondoggle by the Progressives, I'd say that "socialization" has ALREADY taken place.

Don't worry, you and me will never see a dime's worth of profit.






R&D is vital.

Grizalltheway wrote:Boondoggle? What would you suggest we do for energy once the oil runs out, T?

GannonFan wrote:

Grizalltheway wrote:Boondoggle? What would you suggest we do for energy once the oil runs out, T?

There's nuclear, natural gas, fuels cells, and so on. Plenty of alternatives out there that aren't as pie in the sky as solar is right now. Maybe solar will work one day, but we're much closer to those right now.

GannonFan wrote:

Grizalltheway wrote:Boondoggle? What would you suggest we do for energy once the oil runs out, T?

There's nuclear, natural gas, fuels cells, and so on. Plenty of alternatives out there that aren't as pie in the sky as solar is right now. Maybe solar will work one day, but we're much closer to those right now.

Appaholic wrote:

GannonFan wrote:
There's nuclear, natural gas, fuels cells, and so on. Plenty of alternatives out there that aren't as pie in the sky as solar is right now. Maybe solar will work one day, but we're much closer to those right now.

Agree. Solar & wind can be used on a small scale (we are considering for our house as well as windmill) which can certainly supplement an individual family's need for energy. But nuclear is the way to go & environmentalists need to get over the knee-jerk negative reaction to this idea.

Environmentalists are starting to invalidate themselves in the court of public opinion as they fight any alternative changes to domestic power supply while only offering conservation. Conservation should be a laudable goal, even rewarded in some manner to promote it's use, but it's not the answer. We need more power and right now, your best long-term alternatives are either dealing with some nuclear waste or continuing to blow the tops off of mountains for more coal.

Grizalltheway wrote:

GannonFan wrote:
There's nuclear, natural gas, fuels cells, and so on. Plenty of alternatives out there that aren't as pie in the sky as solar is right now. Maybe solar will work one day, but we're much closer to those right now.

Nuclear fusion or traveling wave reactors are the top two, IMO.

GannonFan wrote:

Grizalltheway wrote:Boondoggle? What would you suggest we do for energy once the oil runs out, T?

There's nuclear, natural gas, fuels cells, and so on. Plenty of alternatives out there that aren't as pie in the sky as solar is right now. Maybe solar will work one day, but we're much closer to those right now.

houndawg wrote:

Appaholic wrote:
Agree. Solar & wind can be used on a small scale (we are considering for our house as well as windmill) which can certainly supplement an individual family's need for energy. But nuclear is the way to go & environmentalists need to get over the knee-jerk negative reaction to this idea.

Environmentalists are starting to invalidate themselves in the court of public opinion as they fight any alternative changes to domestic power supply while only offering conservation. Conservation should be a laudable goal, even rewarded in some manner to promote it's use, but it's not the answer. We need more power and right now, your best long-term alternatives are either dealing with some nuclear waste or continuing to blow the tops off of mountains for more coal.

There is no one answer, other than solar in the unfortunately distant future, but today conservation is a significant factor and you need only look back to $4/gal gas to see the proof.

Appaholic wrote:

GannonFan wrote:
There's nuclear, natural gas, fuels cells, and so on. Plenty of alternatives out there that aren't as pie in the sky as solar is right now. Maybe solar will work one day, but we're much closer to those right now.

Agree. Solar & wind can be used on a small scale (we are considering for our house as well as windmill) which can certainly supplement an individual family's need for energy. But nuclear is the way to go & environmentalists need to get over the knee-jerk negative reaction to this idea.

Environmentalists are starting to invalidate themselves in the court of public opinion as they fight any alternative changes to domestic power supply while only offering conservation. Conservation should be a laudable goal, even rewarded in some manner to promote it's use, but it's not the answer. We need more power and right now, your best long-term alternatives are either dealing with some nuclear waste or continuing to blow the tops off of mountains for more coal.

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