Our dependency on oil may just have been given another blow. According to recently released cables from WikiLeaks, the U.S. believes that Saudi Arabia is overstating its oil reserves by more than 300 billion barrels, or nearly 40 percent. A staggering number that is sure to bring into focus our current dependency, it is also believed that this news will cause oil prices to escalate in the next few years. Oil prices have already skyrocketed to over $100 a barrel because of unrest in the middle east and increased global demand, but the new WikiLeaks could have even greater implications on prices.
As the Guardian reports based on confidential cables coming out of the U.S. embassy in Riyadh, Sadad al-Husseini, a geologist and former head of exploration at the Saudi oil monopoly Aramco, has been recorded saying that “Aramco’s 12.5million barrel-a-day capacity needed to keep a lid on prices could not be reached.” And even if Saudi Arabia could reach that demand in 10 years, global oil production would have hit its highest point possibly as early as 2012, the cables reveal.
Husseini says that Aramco overstated its recoverable reserves to spur foreign investment, underestimating “time needed to bring new oil on tap.”
One cable even reported: “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.”
While U.S. officials have never publicly acknowledged a problem before, a U.S cable reads, “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.”
Considering the economic ramifications in addition to the environmental, the leaks only prove that their is an immediate urgency in finding and implementing clean fuel solutions.