<http://www.commondreams.org/views05/0927-30.htm>
Are global oil supplies about to peak? Are they, in other words, about to reach their maximum and then go into decline? There is a simple answer to this question: no one has the faintest idea.
Consider these two statements: 1. "Last year Saudi Aramco made credible claims that as much as 500bn-700bn barrels remain to be discovered in the kingdom." 2. "Saudi Arabia clearly seems to be nearing or at its peak output and cannot materially grow its oil production."
The first comes from a report by Energy Intelligence, a consultancy used by the major oil companies. The second comes from a book by Matthew Simmons, an energy investor who advises the Bush administration. Whom should we believe? I have now read 4,000 pages of reports on global oil supply, and I know less about it than I did before I started. The only firm conclusion I have reached is that the people sitting on the world's reserves are liars.
In 1985 Kuwait announced that it possessed 50% more oil than it had previously declared. Had it just discovered a new field? Had it developed a new technology that could extract more oil from the old fields? No. OPEC, the price-fixing cartel to which it belongs, had decided to allocate production quotas to its members based on the size of their reserves. The bigger your stated reserve, the more you were allowed to produce. The other states soon followed Kuwait, adding a total of 300bn barrels to their reserves: enough, if it existed, to supply the world for 10 years. And their magic oil never runs out. Though extraction has long outstripped discovery, Kuwait posts the same reserves today as it claimed in 1985....
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