Is the peak oil cat out of the bag?
Interesting article buried in the Guardian this morning – one of the Wikileaks cables concerned a ‘reliable source’ at Aramco, the Saudi national oil company, who reportedly said that Saudi Arabia would struggle to maintain current levels of oil production.
I was surprised that this was in the business pages as it is a potentially explosive political and economic issue – after all, oil is the lifeblood of our modern economy. The current situation is:
- Oil production outside the Middle East has ‘peaked’;
- The Middle East countries claim they can maintain production, but the transparency of their reporting leaves much to be desired.
So, if the cable’s source is correct, and Saudi Arabia has 40% less reserves than it claims it has, then we really could be at the end of the age of oil as a dominant energy source. If global production has peaked – as many believe – or will peak in 2012 – as the cables suggest – then oil prices will surge. Recent research has suggested that coal won’t remain a cheap alternative for long either.
The risk of peak oil/coal is fast becoming another compelling reason for organisations and individuals to aggressively cut their dependence on fossil fuels.