Saudi oil reserves overstated by 40%: WikiLeaks

[Guest guest]

http://ca.news.yahoo.com/saudi-oil-reserves-overstated-40-wikileaks-20110209-073\

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Saudi oil reserves overstated by 40%: WikiLeaks

PTI – Wed, 9 Feb 10:32 AM EST

London, Feb 9 (PTI) The US fears that Saudi Arabia, the world''s largest crude

oil exporter, may not have enough reserves to prevent an oil price spike,

American diplomatic cables published by WikiLeaks said.

The cables, published in the Guardian newspaper, ask 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 300 billion

barrels, nearly 40 per cent.

According to the cables, 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 American diplomat that firm''s 12.5 million

barrel-a-day capacity needed to keep a lid on prices could not be reached.

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.

" 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, " one cable said.

According to the cables, which date between 2007-09, Husseini said Saudi Arabia

might reach an output of 12 million barrels a day in 10 years but before then

& #65533; possibly as early as 2012 & #65533; global oil production would have hit

its highest point.

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.

The revelation comes as the oil price has soared in recent weeks to more than

USD 100 a barrel on global demand and tensions in the Middle East.

[Guest guest]

This is why we needed to keep the US fields in production so that as the price goes up, our own production could help keep it down. Instead, this administration has been doing all it can to gut the domestic energy industry.

What I think should be happening is bringing domestic production online over time. What we should do next is put bounties on new technology both making conventional engines more efficient and developing new things. Real new things and not ethanol and the other nonsense. I think the way to do that is not via government or corrupt big industry. What will accomplish this is some backyard tinkerer or maybe a small startup company. As part of this plan, the big auto companies, etc. would be forced to modify their engines to use the new technology. Europe has had much better engines that the US for decades but US automakers haven't used them. Had they been made to use them, the fuel economy of most cars would be probably 20% better than it is. I'm sure there is also more effective hybrid technology out there as well, but the big companies won't use it.

We're just getting in a major crisis now because the US hasn't had a serious energy policy really ever, and now we are getting a serious energy policy but it is totally wrongheaded and will be quite destructive to the economy and our way of life.

In a message dated 2/9/2011 5:26:38 P.M. Eastern Standard Time, no_reply writes:

Saudi oil reserves overstated by 40%: WikiLeaks