Kaza­khs call oil “The Devil’s Tears”

COMMENT: A recent Wik­iLeaks State Depart­ment cable dis­clo­sure gives a boost to the “Peak Oil” hypoth­e­sis as well as lay­ing the foun­da­tion for a fur­ther run-up in the price of oil. Quot­ing a for­mer Saudi offi­cial (who may have been speak­ing from bit­ter­ness), the cable says the Saudis’ oil reserves are very much lower than pub­licly advertised.

In past dis­cus­sion of “Peak Oil,” we have noted its gen­e­sis with the major car­tel firms than con­trol the global econ­omy, as well as the use of the­ory to jus­tify a Nazi-style elim­i­na­tion of human beings.

NB: It was Wik­iLeaks, recall, that dis­sem­i­nated the East Anglia doc­u­ments that lent fuel to the argu­ment that global warm­ing was a myth. It turned out that the doc­u­ments, as edited, were mis­lead­ing and that leak served the inter­ests of the petro­leum indus­try and its adher­ents on the far right.

“Have Saudis Over­stated How Much Oil Is Left?” by Vivi­enne Walt [Time]; Yahoo News; 2/10/2011.

EXCERPT: While the world remains trans­fixed by the Egypt­ian revolt, a cri­sis with equally pro­found global con­se­quences is qui­etly brew­ing else­where in the Mid­dle East:  Wik­iLeaks this week released U.S. diplo­matic cables sug­gest­ing that Saudi Ara­bia may have vastly over­stated its oil reserves — if true, that could dra­mat­i­cally accel­er­ate the arrival of the long-feared “peak oil” moment, when oil pro­duc­tion  hits its final high before slowly declin­ing, keep­ing prices ris­ing for the fore­see­able future and slow­ing global eco­nomic growth. But not all indus­try ana­lysts are con­vinced by the claims in the cables.

The diplo­matic cables from the U.S. embassy in Riyadh between 2007 and 2009 cite a for­mer senior exec­u­tive of Saudi Arabia’s state-run Aramco oil com­pany as reveal­ing to Amer­i­can offi­cials that the country’s offi­cial esti­mate of 716 bil­lion bar­rels of oil reserves is, well, hog­wash; the real fig­ure is about 40% lower than that, accord­ing to the oil exec­u­tive, Sadad al-Husseini, a geol­o­gist who until 2004 headed Aramco’s explo­ration depart­ment — a seem­ingly impec­ca­ble source. Wik­iLeaks released the four cables on Tuesday.

As a pri­vate cit­i­zen no longer rep­re­sent­ing the com­pany, Hus­seini was appar­ently free to speak can­didly. And in a Novem­ber 2007 meet­ing with the U.S. eco­nomic offi­cer in Riyadh, he broke the sober­ing news that the country’s reserves were nowhere near as big as offi­cials were claim­ing. “First, it is pos­si­ble that Saudi reserves are not as boun­ti­ful as some­times described,” the U.S. Con­sul Gen­eral John Kin­can­non in Riyadh wrote to State Depart­ment offi­cials in Wash­ing­ton, report­ing on Husseini’s analy­sis, “and the time­line for their pro­duc­tion not as unre­strained as Aramco and energy opti­mists would like to por­tray.” (Read “Is Peak Oil Com­ing Soon?”) . . .