A lot of noise is being made about Wikileaks info that says the US thinks the Saudi’s are overstating their Proven Reserves by about 40%.
This isn’t news. It has been known for years. In the Mid-80’s the Arab producers decided, after the American and other foreign experts had been shown the door, they had more oil in the ground than was previously known.
Without having found any new fields, without any advancement in technology, some of the Arab oil producers announced increases in Proven Reserves of over 100%. For some time, Wall Street referred to these fictitious numbers as “Paper Barrels” and ignored them. But as time passed, they began to be accepted in the mainstream.
This is one of the major points of oilman Matt Simmons’ book - Twilight in the Desert. He was in the business back in the early 80’s (and well before). He knew the numbers were fictitious and called for independent verification of the reserves.
These charts should eliminate any comfort you might have felt thinking Saudi Arabia and the other Arab nations would be able to keep oil flowing for decades.
in Thousand Million Barrels, Source: BP’s Statistical Review Of World Energy 2010
Peak Oil - Not Just a Myth
Peak Oil is not when we run out of oil, it is when fields hit their “peak” and production declines. The US has been in decline for decades. Many other major producers have been in decline for years.
Most concerning is the OECD has been in decline for a decade and this means the Developed World is relying more and more on the Developing, and less friendly and stable, countries for its oil.
All the information below is from BP’s Statistical Review of World Energy 2010. It shows that Peak Oil is not a future event, it is happening today and has been going on for years.
By. John Riley