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Leaked Cables Reveal US Thinks Saudi Oil Reserves May Be Overstated

timothy posted more than 3 years ago | from the let-prices-adjust-to-reflect dept.

Earth 385

Mr.Intel writes with this excerpt from a UPI report which may interest those of you with cars, electricity, items made of plastic, etc: "Estimates of oil reserves in Saudi Arabia are overstated, meaning crude output could peak within the next decade, leaked US diplomatic cables reveal. Washington fears Saudi Arabia overestimated its oil reserves by as much as 40 percent and the kingdom can't keep enough oil flowing to control prices, US diplomatic cables obtained by WikiLeaks and published by The Guardian newspaper in London reveal."

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Thank goodness for Canada (3, Funny)

thomasdz (178114) | more than 3 years ago | (#35166004)

Canada, the 51st state, has all the oil the US needs.... all you need to do is invade^H^H^H^H^H^H ask

Re:Thank goodness for Canada (4, Insightful)

jpmorgan (517966) | more than 3 years ago | (#35166078)

To quote Dogbert, your comment more or less says "Hey everyone, I don't understand what fungible means."

It's unlikely that much Saudi Arabian crude ends up in your gas tank. Your car is filled mostly from Gulf, Venezuelan and yes, Canadian crude. But it's still an international market, and a shortage of Saudi Arabian crude will drive up prices everywhere around the world, as European oil companies start looking to buy from elsewhere to make up for the shortfall.

Re:Thank goodness for Canada (1)

zAPPzAPP (1207370) | more than 3 years ago | (#35166120)

Hence the "invade" part, to get it cheaper...

Re:Thank goodness for Canada (2)

plopez (54068) | more than 3 years ago | (#35166170)

As long as you don't count the "externalized" costs. Besides, the oil revenue the US was counting on from Iraq to pay for the invasion never materialized.

Re:Thank goodness for Canada (2)

zAPPzAPP (1207370) | more than 3 years ago | (#35166266)

Well, that's the whole "blood for oil" discussion all over again.

But if you read the grossly huge number, that tells us the cost of that war, you need to remember, that a big chunk of this money went right into the US economy.
This makes a huge difference to straight out paying another country for resources. That money is gone for good (unless you make them buy your weapons and other goods with it, then you get a bit of it back).

Re:Thank goodness for Canada (1)

jdpars (1480913) | more than 3 years ago | (#35166386)

Hadn't thought about where the cost of the war was going. Does anyone have hard data on that? I'd be interested to see.

Re:Thank goodness for Canada (2)

nelsonal (549144) | more than 3 years ago | (#35166512)

Most of the cost is to US servicepeople (pay for reserve/guard units called up, extra duty pay for actives, hazard pay etc). The rest is the cost of materials, the US is still the largest arms dealer in the world, and most of our military equipment is US made, the main imported product used would be oil/gas.

Re:Thank goodness for Canada (1, Informative)

Anonymous Coward | more than 3 years ago | (#35166520)

Hadn't thought about where the cost of the war was going. Does anyone have hard data on that? I'd be interested to see.

You know the handful of defense contractors and consultancies that had close ties to top Bush administration officials? Yeah, the ones who had the most to gain from an invasion of Iraq? A large chunk of it went to them in one way or another.

Not quite (4, Informative)

twoallbeefpatties (615632) | more than 3 years ago | (#35166514)

It's not about a "blood for oil" trade. It's that the architects of the war grossly underestimated the costs of the invasion, and part of the pitch for the occupation was that the cost of war would be minimal considering that the money recouped from Iraq's domestic production would help to repay for the invasion. This link has a few good quotes: [procon.org]

"The bulk of the funds for Iraq's reconstruction will come from Iraqis -- from oil revenues, recovered assets, international trade, direct foreign investment -- as well as some contributions we've already received and hope to receive from the international community." -Donald Rumsfeld, 2003

You know what they say about assumption... (2)

SuperKendall (25149) | more than 3 years ago | (#35166416)

Besides, the oil revenue the US was counting on from Iraq to pay for the invasion never materialized.

That's kind of an odd assumption because the war was never about oil revenue from Iraq but instead of a platform of relative stability in the region once we started realizing Turkey was headed south.

Re:Thank goodness for Canada (1)

spun (1352) | more than 3 years ago | (#35166218)

You do not get cheaper oil by invading unless you are a well-connected oil company executive. Do you really think a nation invades another nation so the average guy on the street can have cheaper resources?

Re:Thank goodness for Canada (1)

a_n_d_e_r_s (136412) | more than 3 years ago | (#35166296)

Yes, we have all seen plenty of evidence for that.

Re:Thank goodness for Canada (1)

spun (1352) | more than 3 years ago | (#35166536)

Not sure if you are agreeing or disagreeing here. Do you think we have plenty of evidence that wars have resulted in cheaper resources for the average guy? I've sure never seen it happen. War profits never go to the man on Main Street, they go to the man on Wall Street.

Re:Thank goodness for Canada (1)

GooberToo (74388) | more than 3 years ago | (#35166414)

Hence the "I have no clue how expensive warfare actually is."

People who say the US invaded Iraq for cheaper oil are completely out of touch with the most basic facts of the cost of war. Not to mention the volume of oil consumed and corresponding economic pressures, not to mention the price at the pump as a result of the increased demand. The US military, at peace time, is one of the world's largest consumers of oil. The gap grows tremendously when they are at war.

Even if the war has been over and all troops came on GW' carrier flag day, it would have taken decades to make back a return on the "war investment." And even at that time, bringing the troops home was literally impossible. Such statements have NEVER made sense. Not one bit. But I guess its fun to say if you just want meaningless ammunition to throw at politicians. After all, most other people don't know any better either.

Re:Thank goodness for Canada (2, Insightful)

h4rr4r (612664) | more than 3 years ago | (#35166516)

Those who paid for the invasion, are not the same as those who stand to benefit. See this is a nice way to get the public to pay for something you want. This works quite well if you are selling guns, airplanes or if you own an oil company. No ROI is needed since this is far more about getting someone else to pay your bills then any investment.

Re:Thank goodness for Canada (1)

MarkvW (1037596) | more than 3 years ago | (#35166694)

You hit the nail on the head. The military gets a cash infusion, multinational oil companies get protected, and the price of oil is stabilized. And the US taxpayer foots the bill.

Re:Thank goodness for Canada (1)

MarkvW (1037596) | more than 3 years ago | (#35166670)

We invaded Iraq for stability in Earth's largest oil-producing region. I can understand and respect the point of view that we didn't invade Iraq for "CHEAPER oil," but it cannot be fairly disputed that we invaded Iraq for oil. Either that, or we engaged in war for altruistic purposes (which I am not prepared to believe).

Re:Thank goodness for Canada (1)

GooberToo (74388) | more than 3 years ago | (#35166920)

I personally believe we invaded for long term regional stability and in altruistic hope of bringing democracy. Democracy in of itself brings stability, better human rights and economic expansion. All of which are good for the economy (consumers at some point), long term oil price stability, and best of all, it can keep terrorism and extremists suppressed - or at worst, contained. Furthermore, it gives countries like Iran and Syria pause.

Completely ignoring oil, there is a literal laundry list of reasons to be there which directly and/or indirectly benefit the US (and other countries) for decades and potentially centuries to come.

Re:Thank goodness for Canada (1)

GooberToo (74388) | more than 3 years ago | (#35166822)

Ya I know - bad for to reply to yourself...but I wanted to add some more detail.

Guided artillery - $35,000 per shell
JDAM - $10,000 each, plus the actual bomb .50 cal round - roughly $1.50 each
556 round - roughly $0.50 each
762 round - roughly $0.70 each
hand grenade - roughly $30 each
Apache helicopter - roughly $16-17 million each (lost several)
M1A1 tank - roughly $4.5 million each (we've lost several)
plus lots of other vehicles and aircraft
cruise missile - $0.5 million each
hellfire missile - roughly $72,000 each
other various missile - $5,000 - $200,000 each
artillery shell - roughly $1500 each

And those numbers completely ignore per troop cost, transport, refits on equipment, general maintenance, fuel consumption, food and general supplies.

An Apache, for example, costs roughly $5000/hr to operate and then requires 3.5 hours of maintenance for every hour flown. The maintenance, excluding parts, is several thousand per hour.

You can imagine the numbers get astronomical extremely quickly. Simply put, unless you plan on an imperialistic expansion, like what England used to do, whereby you completely oppress the people and rape the land for several decades, it is all but impossible for war to ever become cost effective.

Re:Thank goodness for Canada (1)

C_amiga_fan (1960858) | more than 3 years ago | (#35166924)

No need to invade. We'll just send an open invitation to the Western Provinces - "How would you like to become out 51st through 55th States?"

I know many Canadians in the west who think they are largely ignored by Ottawa (which favors the east), and would be better off in the US. For one thing: They'd gain more power (a voice in the Senate equal to more-populous states).

Please note - I'm not saying I agree with those Western canadians; just repeating what I've heard them say.

Re:Thank goodness for Canada (1)

Monkeedude1212 (1560403) | more than 3 years ago | (#35166148)

But the idea was that the US would no longer need to purchase it's oil... (assuming the states is invading and taking control or Canadians are just that nice) Hence prices no longer matter to the US. Essentially if the Demand for oil by the US is met by the supply the US has, the prices only really go up for everyone else who loses out.

Re:Thank goodness for Canada (1)

MightyMartian (840721) | more than 3 years ago | (#35166200)

But that would only really work if the above-mentioned oil producing states basically agreed not to sell to anyone else, thus removing themselves from the global oil market. I can't imagine the oil companies in those countries wanting to do that, nor can I imagine the governments, who profit from it as well, cutting themselves off at the knees just so you can get cheap prices at the pump.

Re:Thank goodness for Canada (1)

plopez (54068) | more than 3 years ago | (#35166186)

Don't forget Mexico. Which is troublesome due to the growing unrest there.

Re:Thank goodness for Canada (0)

GooberToo (74388) | more than 3 years ago | (#35166316)

According to Pickens, the US only consumes 10% of the middle east's oil.

Re:Thank goodness for Canada (1)

hedwards (940851) | more than 3 years ago | (#35166586)

That's because we get the a majority of our oil from Canada. Top 7 suppliers of oil to the US [globalpost.com]

Re:Thank goodness for Canada (0)

Anonymous Coward | more than 3 years ago | (#35166662)

According to the world, US consumes 25+% of the world production.

http://en.wikipedia.org/wiki/Energy_in_the_United_States#Oil_consumption
http://en.wikipedia.org/wiki/Peak_oil

Sooooo, does it matter if oil comes from middle east or elsewhere? Total world consumption has to come from somewhere, and a large part of that is middle east. And US eats 25+% of world consumption - one nation. Now, I'm not certain where China will get it's 12+mbpd that it needs when more chineese will drive cars. Hell, if China consumed as much oil per capita as US, it would need at least another 40 mbpd - that's 50-60% of total world consumption, just to reach on par with US!!!! What magic place will that come from??

http://www.nationmaster.com/graph/ene_oil_con-energy-oil-consumption

Re:Thank goodness for Canada (4, Insightful)

afidel (530433) | more than 3 years ago | (#35166482)

Crude isn't completely fungible, light sweet crude is but that's not the majority of current crude production. For instance all the saber rattling Venezuela was making a couple years about cutting off the US was pure bluff, no other consumer has enough refining capacity for their particular kind of sour crude and so the only thing cutting off the US would have accomplished was a complete collapse of their economy.

Re:Thank goodness for Canada (1)

Anonymous Coward | more than 3 years ago | (#35166096)

Back off, get your own oilsands!

No worries - they already sell it to us. (2)

Penguinisto (415985) | more than 3 years ago | (#35166274)

As sibling mentioned, the whole damned market is fungible (Hell, we sell Alaskan crude to Japan and the rest of Asia, if memory serves... with very little making it to the lower 48).

I figure that, *if* renewables do start picking up, then we have options...

* rising gas prices will almost guarantee that folks will (if they can) shift to more fuel efficient vehicles. Hybrids? Probably not until the come down in price to something sane, and EV's will likely not be viable until they come with a decent range (the Nissan Leaf IIRC only gets around 140 miles per charge... then you get to wait an hour or two for it to recharge). Meanwhile, the very poor and the very rich will still be driving SUV's (the former because the things will be cast off like so much detritus), but only one group will actually be able to afford to.

* there will likely be a surge in public transit in many areas - those areas where it exists will likely get a huge boost in routes (now if only they can string a track from PDX to the coast...) Even out in the Western US, where distances between towns are obscenely long, this is already happening to an extent (e.g. Ogden to SLC light rail).

* I get the feeling that the NIMBY crowd will start getting bitch-slapped once the masses realize that either we build the solar/wind farm on that Western Cross-Eyed Spotted Dormouse habitat, or you start putting up with brownouts.

Re:No worries - they already sell it to us. (1, Interesting)

rolfwind (528248) | more than 3 years ago | (#35166752)

Solar/Wind won't do it.

Nimbys and environmentalist wackos will have to be slapped asiden and nuclear plants (and breeder plants) built for the first time in 30 years. Nuclear is the real hope. Solar and Wind is a pipe dream except for localized energy.

Come on up! (1)

jpedlow (1154099) | more than 3 years ago | (#35166362)

Better come up during the summer, the winters are cold and I'm not sure you guys can deal with the swing from desert heat to canadian winters (except those living in victoria, lucky jerks)

Also, we could finally have our terrible gun laws thrown out if you guys invade, and I can take the rivets outta the 20 round mags on my M1A (30s on my AR)! Dont touch our beer though, for serious.

Re:Thank goodness for Canada (2)

future assassin (639396) | more than 3 years ago | (#35166372)

Not if we poison the water ways up here. By the time you get here they'll have died from death.

Re:Thank goodness for Canada (1)

ColdWetDog (752185) | more than 3 years ago | (#35166756)

they'll have died from death

Keep going. How else would this happen?

Re:Thank goodness for Canada (1)

rolfwind (528248) | more than 3 years ago | (#35166700)

The question, of course, is not how much oil Canada has, but how easy it is to extract and process.

What else? (1)

EvilBudMan (588716) | more than 3 years ago | (#35166064)

What else is new? We knew they lied about this for years.

Re:What else? (1)

lul_wat (1623489) | more than 3 years ago | (#35166434)

Wish I could find the chart.. but yes, they have been. When OPEC put limits on the amount a country could pump out, based on its stated oil reserves, guess what happened? Everyones STATED oil reserves havn't changed since that limit was put in .. hence no need to decline pumping.

/. News Network (4, Insightful)

Even on Slashdot FOE (1870208) | more than 3 years ago | (#35166080)

Today's top story is that Saudi Oil reserves are actually critically lo, and we will need to transition to use more renewable energy sources to replace it.

In related news, NIMBY groups are opposing the construction of everything other than oil and coal plants on the basis that everything else is ugly and might even let the poor have enough electricity to survive the weather conditions of the coming years.

Re:/. News Network (2)

Anonymous Coward | more than 3 years ago | (#35166126)

And the Republicans are trying to unfund any research into renewable energy. Penny-wise, pound-foolish ... we'll all be paying the price in 10 years or so for that.

Re:/. News Network (1)

mbkennel (97636) | more than 3 years ago | (#35166184)

Are you kidding?

For them, it's Penny-Wise, Billion-Dollar-Wise assuming they own oil wells and Wealthy Friends who own oil companies.

Re:/. News Network (1)

MightyMartian (840721) | more than 3 years ago | (#35166210)

Well of course we will, but the politicians will enjoy great success in the meantime, and when the shit hits the fan, they'll be ready to retire on the huge amounts of money they were paid under the table by oil companies.

Business as usual.

Re:/. News Network (0)

Anonymous Coward | more than 3 years ago | (#35166278)

This is SO TRUE.

Well, unless there are other ways to pay for renewable energy research that aren't federally funded.

Because wow, if private industry could raise money in some way other than federal grants, you'd sound like an idiot!

Re:/. News Network (1)

Darkness404 (1287218) | more than 3 years ago | (#35166462)

...And the democrats want to pump money into unworkable schemes to fund their "green energy" friends. Neither side is about sustainability and real progress, both sides just want to funnel as much of your tax money as possible into whatever pet projects they have that make them/their friends money.

Wrong (1)

SuperKendall (25149) | more than 3 years ago | (#35166496)

And the Republicans are trying to unfund any research into renewable energy.

They are trying to cut budgets across the board, because the government has no money.

Plenty of Republicans and other conservatives back things like construction of new nuclear power plants, a form of renewable energy that actually makes sense.

Wind energy makes little sense at the moment (all we will end up with is more dead windmill fields such as the ones in California and Hawaii). Solar panels are starting to make sense but why do they need government help to make it happen? People are already starting to buy things like solar shingles of their own accord.

Re:Wrong (0)

Anonymous Coward | more than 3 years ago | (#35166604)

The tax credits had nothing to do with that, right?

Re:Wrong (1)

aaarrrgggh (9205) | more than 3 years ago | (#35166792)

Um... have you been to California or Hawaii? Both have significant, operating, and expanding wind farms that were commercially viable with a minimum of subsidy/regulation. Hell, at $0.50/kWh in Maui or the Big Island wind and solar have 3 year paybacks!!

Re:Wrong (1)

h4rr4r (612664) | more than 3 years ago | (#35166810)

Really? Across the board?
Please do provide some more information on all these defense budget cuts. We do spend more than the rest of the world combined on that so it seems a pretty safe place to start cutting. Nuclear is not renewable, you are burning the matter of dead stars, there is a limited supply of such stuff. It is still an excellent choice for baseload power though, if reprocessing of spent fuel was legal.

I live in Western NY, wind power is huge here. We keep putting them up and selling power to the eastern seaboard.

Re:/. News Network (0)

Anonymous Coward | more than 3 years ago | (#35166230)

Ah, sweet, so you've found a magical new renewable energy source that we can put in our cars, or use to make plastics and fertilizers, not to mention other use in barbecues, heating applications, and so forth?

Or, wait, no... maybe you just like to harp on the "NIMBY" folks without knowing what the fuck you're talking about.

Re:/. News Network (1)

h4rr4r (612664) | more than 3 years ago | (#35166474)

They call that electricity. With enough of it and some water and a source of CO2, like that dissolved in water you can make all the hydrocarbons you want. For evidence there was a recent article about an aircraft carrier making jetfuel from seawater. If you have a better source of carbon, like turkey carcasses, you can make oil or other hydrocarbons via thermal depolymerization. I mention turkey carcasses since there is already a plant owned by Cargil doing just that.

Also you can make electricity from tons of renewable and non-renewable sources.

Re:/. News Network (2, Insightful)

Darkness404 (1287218) | more than 3 years ago | (#35166412)

Exactly. The safest, most efficient form of energy we have right now is nuclear energy but of course we can't have that because its nuclear! We need to focus on the here and now and the here and now is nuclear.

Re:/. News Network (1)

h4rr4r (612664) | more than 3 years ago | (#35166606)

Only if we can reprocess the waste. Until we can legally do that, we should not be building new reactors. Also once you factor in all the subsidies used for nuclear power it is no cheaper than wind or solar thermal. This does not mean we should ignore its use for baseload, merely that putting all our eggs in that basket is not the right approach.

Re:/. News Network (1, Insightful)

Darkness404 (1287218) | more than 3 years ago | (#35166686)

Except for the fact that it is more practical in most places. If you are in a windy part of the country, of course wind farms make some sense. If you are in death valley, of course solar thermal makes sense. If you are on the east coast where there is a lot of coal, coal makes sense. But in areas that these conditions aren't true, or where there is limited area to build a wind farm or solar farm, nuclear makes a lot more sense and a lot of the opposition to nuclear power being used is based on media hype and misinformation.

Re:/. News Network (1, Interesting)

Waffle Iron (339739) | more than 3 years ago | (#35166890)

Exactly. The safest, most efficient form of energy we have right now is nuclear energy but of course we can't have that because its nuclear! We need to focus on the here and now and the here and now is nuclear.

If nuclear power were the answer to the world's energy problems, we'd be helping Iran and North Korea with their programs right now.

Nuclear power isn't going anywhere, and it's not just because of hippies. Neocons realize that the vast expansion of nuclear activities that would be required to make even a small dent in the world's energy budget would create huge new opportunities for countries around the world to secretly tinker with weapons programs. Neocons are totally frightened by this scenario. (And it's one of the few things that they're actually correct.)

Neocons cleverly use a passive-aggressive approach to the issue, blandly stating that they "support" more nuclear power without ever seriously pushing for it. They know that almost nobody but some nerds on /. are genuinely in favor of massive increases in nuclear energy, so even the feeble pushback from NIMBYs and hippies will result in more status quo. Which suits them fine.

Fission power is a dead end. Move on to the next idea.

Re:/. News Network (1)

ColdWetDog (752185) | more than 3 years ago | (#35166898)

Exactly. The safest, most efficient form of energy we have right now is nuclear energy but of course we can't have that because its nuclear! We need to focus on the here and now and the here and now is nuclear.

It's a tad ironic - your statement juxtaposed with your sig. Do you realize that nuclear power has enormous, truly enormous government subsidies (from tax revenue)? Without those subsidies the industry would be completely dead in the water, as opposed to severely moribund. There are several reasons [nrdc.org] (and discoverable by a trivial search) for this, among them the very long lead time involved in plant siting, design and construction. But as a 'free market' short term proposition, nucs aren't glowing very brightly.

Re:NIMBY (1)

TaoPhoenix (980487) | more than 3 years ago | (#35166546)

Take a look at the housing depression figures out west. There's room to build a couple of power plants out there.

Re:NIMBY (1)

tnk1 (899206) | more than 3 years ago | (#35166820)

Take a look at the housing depression figures out west. There's room to build a couple of power plants out there.

Now that you mention it, I've just thought of something we can do with Detroit. And it would be the one place where nuclear plants would be a beautification project to boot.

I wonder how this cable got leaked. (2)

Dripdry (1062282) | more than 3 years ago | (#35166092)

Or by whom, really. Of course there are people who will profit mightily from this information, like Shell and BP. Sure glad we found those huge oil reserves in the Western U.S. recently. Funny, that....

Re:I wonder how this cable got leaked. (0)

Anonymous Coward | more than 3 years ago | (#35166766)

There's no need for crazy oil company conspiracy theories.

As TFA says, this is part of the big WikiLeaks diplomatic cable leak [wikipedia.org] . So we know exactly who leaked it (Bradley Manning) and why (he was disgruntled and grabbed everything he could).

This is just one cable among 251,287. You should expect reports about these leaked cables to continue to come out for a long while as the documents are slowly released and picked over by news agencies.

Oil output has already peaked (1)

Anonymous Coward | more than 3 years ago | (#35166104)

We're on the down-slope now.

Re:Oil output has already peaked (1)

ScentCone (795499) | more than 3 years ago | (#35166608)

We're on the down-slope now.

We're on the downslope of the fraction of the available hydrocarbons we've even begun to bother retrieving and using, if that's what you mean. Or did you mean to just troll?

US Thinks Saudi Oil Reserves May Be Overstated (3)

zrbyte (1666979) | more than 3 years ago | (#35166124)

Question is who doesn't think so? I mean really.

A leak originating from the Saudis themselves could be the real news.

Re:US Thinks Saudi Oil Reserves May Be Overstated (5, Informative)

zAPPzAPP (1207370) | more than 3 years ago | (#35166164)

The origin of this information is a former saudi oil company exec. The leak just quotes it and tells us, that US diplomats think he's believable.

Re:US Thinks Saudi Oil Reserves May Be Overstated (2)

pak9rabid (1011935) | more than 3 years ago | (#35166622)

Wouldn't it be in the best interest of the Saudi's to give the opposite impression (IE, tell everyone there's lower supply than there really is to hike up prices)?

Re:US Thinks Saudi Oil Reserves May Be Overstated (4, Informative)

Jah-Wren Ryel (80510) | more than 3 years ago | (#35166852)

Wouldn't it be in the best interest of the Saudi's to give the opposite impression (IE, tell everyone there's lower supply than there really is to hike up prices)?

No. It's because of the way OPEC is structured. OPEC's goal is to restrict supply to increase prices. They set the limit for each country as a percentage of that country's oil reserves. So the larger a country's reserves, the more oil it is allowed to sell under OPEC rules. The problem is that OPEC doesn't use independent evaluations of oil reserves, they use each country's official numbers. So there is plenty of incentive for each country to overstate the size of their reserves so as to sell more oil.

Re:US Thinks Saudi Oil Reserves May Be Overstated (0)

Anonymous Coward | more than 3 years ago | (#35166896)

I've heard experts, yes real experts that have worked in Saudi Arabia, say that Saudi oil has already peaked. A couple of years ago when oil prices were out of control the US and other countries asked Saudi Arabia to increase their output and they admitted they couldn't which also suggests they have peaked. It's been known for nearly two decades that countries in the middle east have consistently upped their domestic reserve estimates so Opec would allow them to pump more oil. The problem with this is there have been no major reserves found in the area since the early 70s. Where's all this new oil they claim to have coming from? The point is no one is sure just how much is left but we do know the reserves are finite and the US peaked in the early 70s. Whether it's already happened or happens in ten years we know The middle east oil won't last forever. One ugly fact is Saudi Arabia has always based their oil estimates on what is in the ground not what they can extract. Their claims of having a 100 years of oil reserves reflect total volume. The best technology to date can extract a third of the ground oil so cut their estimate by two thirds. Basically by the middle of the century they'll run out not counting increased demand so they have likely peaked. They won't run out for fifty years but the output will continue to drop and prices will just keep going up. Cheap oil is a thing of the past.

Who is drinking their milkshake? (0)

snookerhog (1835110) | more than 3 years ago | (#35166134)

Who is drinking their milkshake?

Re:Who is drinking their milkshake? (0)

MagikSlinger (259969) | more than 3 years ago | (#35166332)

DRAAAAAAIIINAGE,YOU BOY!

oh no (1)

acehole (174372) | more than 3 years ago | (#35166146)

What will the 10,000 odd saudi princes do?

Actually a proportion of the population has no need to work at all, i'm sure the country is going to be a swell place to live once the oil stops.

And now, over to the speculators. (1)

Duradin (1261418) | more than 3 years ago | (#35166152)

Day Trader Speculators: PANIC!

Average person on the street: Well great, guess we'll be seeing $5/gal gas shortly. Thank you Wikileaks, you could have at least waited until winter was over so I could actually afford to heat my house.

Re:And now, over to the speculators. (0)

Anonymous Coward | more than 3 years ago | (#35166220)

southern hemisphere

Re:And now, over to the speculators. (0)

Anonymous Coward | more than 3 years ago | (#35166236)

You heat your house with gasoline?

Re:And now, over to the speculators. (0)

Anonymous Coward | more than 3 years ago | (#35166432)

Lots of rural folks use #2 fuel oil. Not everyone is in range of the city natural gas pipes.

Re:And now, over to the speculators. (1)

h4rr4r (612664) | more than 3 years ago | (#35166724)

Those folks can burn any number of vegetable oils, oils generated from coal to fuel conversion, or a product of thermal depolymerization of waste. They can also convert to LPG or other liquefied flammable gases that are available in tanks.

Re:And now, over to the speculators. (1)

plopez (54068) | more than 3 years ago | (#35166250)

Maybe now you'll be "incentivized" to super insulate your house. BTW, insulating works for the summer bills too if you use air conditioning.

Re:And now, over to the speculators. (1)

schnikies79 (788746) | more than 3 years ago | (#35166580)

Super insulating can cause a lot of moisture problems too. My aunt/uncle "super insulated" their house and started running into bad mold problems. After a few thousand more dollars upgrading ventilation and heating/cooling, it was okay again.

Good (0)

Anonymous Coward | more than 3 years ago | (#35166270)

More accurate observations will help drive up the price. This will make new exploration and coal and natural gas more cost effective.

And will also get prices to the point that all the so-called alternatives might be able to stand on their own.

Re:Good (1)

mace9984 (1406805) | more than 3 years ago | (#35166440)

+1

Re:Good (0)

Anonymous Coward | more than 3 years ago | (#35166656)

Bullshit observations can help drive up the price as well. This could be a well-crafted money-making scheme.

Who knows.

!Good (2)

Darkness404 (1287218) | more than 3 years ago | (#35166788)

Your post makes no sense. How is it good if our standard of living declines? Sure, perhaps you have a lot of extra cash that you really want to spend on more expensive food, clothes, electronics and other goods, but for everyone else, this isn't a good thing.

A decline in the standard of living for a country is never, ever a good thing.

Glad we are taking the necessary steps... (3, Insightful)

MoldySpore (1280634) | more than 3 years ago | (#35166272)

...to ensure we are ready for the day when the oil runs out by embracing clean energy and slowly phasing out our dependence on foreign oil...

Oh wait, that was a dream I had. Shit.

Re:Glad we are taking the necessary steps... (2)

diskofish (1037768) | more than 3 years ago | (#35166320)

We'll reduce our dependency on oil. Right after shit starts to hit the fan.

Your pessimism is misplaced (0)

SuperKendall (25149) | more than 3 years ago | (#35166290)

For balance:

New drilling method opens vast oil fields in US [yahoo.com] .

Eventually we'll have a president with a realistic understanding of the proper mix and growth ratio of renewable power and traditional power, and we'll start to make use of natural assets again.

Re:Your pessimism is misplaced (5, Insightful)

MoldySpore (1280634) | more than 3 years ago | (#35166324)

Since oil is not a renewable resource, I think my pessimism is very well placed. Perhaps we won't see the oil run out in our lifetime, but it will eventually. It doesn't matter how much new, dangerous to drill, domestically based oil fields we find. It will eventually all be gone. Especially at the rate we consume it. But then again it's always easier to put off until tomorrow what can be done today, right?

Re:Your pessimism is misplaced (1)

Idbar (1034346) | more than 3 years ago | (#35166892)

I'm pretty sure there's already OILv6 out there already. We just need to make the move from OILv4 smoothly but soon.

Re:Your pessimism is misplaced (3, Insightful)

circletimessquare (444983) | more than 3 years ago | (#35166442)

i'm certain we can eke out some extra bits of oil here and there with some shiny new tech. meanwhile, china, brazil, india, are growing economically. it's simple economics: increased demand, and harder to get supply = price levels that make petroleum as a fuel source unpalatable

it just begs the question: what does it take to convince some people that the era of digging petroleum out of the ground is over, and you need to look at alternatives?

because when i read posts like yours, i just see denial

Your pessimism is REALLY misplaced (1)

SuperKendall (25149) | more than 3 years ago | (#35166614)

it just begs the question: what does it take to convince some people that the era of digging petroleum out of the ground is over, and you need to look at alternatives?

Who said alternatives are not desirable?

The only denial I see is in the people who think technology will not produce reasonable alternatives to oil for large-scale production of energy when oil gets expensive enough. People will naturally stop digging for oil at some point when it makes sense, which it simply does not today.

We have already seen that with this story, oil starts to get expensive so techniques to get at oil you couldn't previously use are found.

But in addition to that, nuclear energy research advances as does solar and hydrogen, and even biologic production of hydrocarbons! All of those are also partly in response to oil being harder to extract and recognizing the need for other forms of energy.

That's why "peak oil" has to be the stupidest scare term to come out in a long time, because what humans are really really good at is thinking of alternatives when problems arrive. That includes alternative energy.

When my roof next needs to be replaced for example I intend to spend a little extra and get solar shingles. How is that denial?

Re:Your pessimism is misplaced (3, Interesting)

Darkness404 (1287218) | more than 3 years ago | (#35166642)

The alternatives will start coming when A) we stop federal subsidies for "alternative energy" and B) when the price actually hits where it makes sense for people to transition.

All federal subsides do is delay real, marketable solutions for stuff that doesn't work in the real world. Just look at ethanol, it is completely impractical for use in the US, especially from corn, but because of all of the subsides going to it, we continued on even though it is a dead end. Perhaps if we stopped interfering with the automotive industries we might actually see a practical electric car on the market, rather than attempts to gain tax credits and subsides.

Re:Your pessimism is misplaced (1)

Americano (920576) | more than 3 years ago | (#35166736)

I'm all for it. Can we start building some very efficient and very safe nuclear power plants instead?

I ask because a lot of people who want alternative energy sources seem strangely unwilling to accept any alternatives involving anything except sunlight, wind, and perhaps tide power on the coasts.

Re:Your pessimism is misplaced (5, Insightful)

cptdondo (59460) | more than 3 years ago | (#35166620)

At what cost? That method involves breaking rock under high pressure, by using gas, water, sometimes mixed with chemicals.

I'm sorry, but I don't think that we should be cracking rock and injecting crap into the ground, especially in a region that's already critically short of groundwater.

The fractured rock creates new pathways for water to migrate, and for pollutants to get around, and in general to fuck up acquifers in a region that may well be uninhabitable due to a lack of water in the near future.

Re:Your pessimism is misplaced (2)

FriendlyPrimate (461389) | more than 3 years ago | (#35166818)

For balance:

New drilling method opens vast oil fields in US [yahoo.com] .

Eventually we'll have a president with a realistic understanding of the proper mix and growth ratio of renewable power and traditional power, and we'll start to make use of natural assets again.

Sheesh....been watching the anti-Obama propaganda on Fox a little bit too much?

In your opinion, in what way does Obama not have a realistic understanding of a proper mix of traditional and renewable power? He did recently just open up significant new sections on the continental shelf for drilling. Is it that you think he's promoting renewable power more than traditional power? Isn't that what he SHOULD be doing? After all, traditional power doesn't NEED any help. It's already mature and highly profitable. Obama's not stopping anyone from using these new drilling techniques if they indeed are for real. However, renewable power is new and not profitable yet. It needs help in terms of money for research if it has any hope of BECOMING mature and profitable and self-sufficient. Therefore, all emphasis SHOULD be placed on renewable energy, since traditional energy is doing just fine on it's own.

I'm not a big fan of Obama for lots of reasons, but not having a "realistic understanding of the proper mix of renewable and traditional power" is not one of those reasons.

Leaked huh? (0)

Anonymous Coward | more than 3 years ago | (#35166314)

There is no way possible this was leaked by an oil company.

Those poor oil companies who have an ever dwindling supply of oil, and now have to state that they have so much less oil than they thought.
They might have to charge more for oil because there is now so little left.

Re:Leaked huh? (0)

Anonymous Coward | more than 3 years ago | (#35166904)

There is no way possible this was leaked by an oil company.

You are correct. It was leaked to WikiLeaks, along with 250k other documents, by Bradley Manning, not by an oil company.

Perhaps you saw something about that in the news....

Electricity? No. (1)

loshwomp (468955) | more than 3 years ago | (#35166400)

Electricity is a red herring. So little oil is used for electricity production that you can round it down to the nearest zero.

Inaccurate Headline (1)

Wyatt Earp (1029) | more than 3 years ago | (#35166404)

The leaked cables are that someone from Saudi Aramco thinks the estimates are overstated by up to 40% and they told the US Embassy.

It's in the damned summary of the story

"Nevertheless, cables from 2007-09 reveal some U.S. diplomats were convinced by Sadad al-Husseini, a former executive at Saudi Aramco, who said crude reserves from Saudi Arabia were overstated by as much as 40 percent.

"While al-Husseini fundamentally contradicts the Aramco company line, he is no doomsday theorist," the cables state."

Obvious Solution (1)

FrankDrebin (238464) | more than 3 years ago | (#35166424)

The obvious solution to losing all that oil would be plugging the leak.

Why to leak this info? (0)

Anonymous Coward | more than 3 years ago | (#35166428)

I'm really unsure if this kind of leaks are useful for us. In really I think it might really damage our government strategy. I don't really care that the US government is not transparent about those evaluation. Where is the value of this info here? Why does wikileaks publish this document?

this is commonly debated (1)

mschaffer (97223) | more than 3 years ago | (#35166534)

This isn't really news. Geologists have been debating this for years. It would be news if a Saudi geologist would officially state this.

Old News (0)

Anonymous Coward | more than 3 years ago | (#35166618)

At least a decade ago I saw a publicly available, heavily redacted CIA report that indicated Saudi Oil was depleting faster than they stated, and that their reserves were also overstated.

Why is this news now?

So is this proven reserves, or projected reserves (5, Insightful)

Sir_Sri (199544) | more than 3 years ago | (#35166652)

The problem with proven oil reserves is that they (by definition) include only economically recoverable oil at any given point in time, which is a stupid way to define things but that's beside the point. Saudi Light crude (which is the 15-20/barrel stuff, or less... a lot less), is not exactly going to last long, it's dead easy to get out of the ground and makes it hard to justify the effort in anything else for the saudis (as opposed to say canada, where we have relatively little of the cheap easy to get stuff). But the Saudi's have a lot of heavy oil that at 60 or 70 bucks a barrel wouldn't be economically viable, but at 100 bucks a barrel, with bangladeshi slave.. I'm sorry, foreign worker, labour becomes reasonably profitable. (In 20 years feel free to replace bangladesh with some random impoverished muslim nation in africa, I doubt the Saudi's care where the cheap labour comes from all that much).

So then we can ask a question. As the light, cheap, easy to get stuff dries up, and then there's inflation, economic growth etc. what will the price of oil be in 10 years, 15 years, 20 etc. The Saudi's and americans almost certainly disagree on what will be economically viable to extract, in the same way two experts on the price of oil aren't going to come to exactly the same number for 15 years from now. It's hard to see the future. There are different ways to count oil recoverability too, and that will depend a lot on well... price ( and technology).

Using some measures the US should run almost completely out of domestically produced oil in less than 8 years. Does anyone seriously think that's going to happen? That's supposedly been the case for at least a decade, and yet US oil production doesn't appear to exactly be in a massive imploding crisis of supply. In 2007 the US produced 8.5 million barrels/day (http://www.nationmaster.com/graph/ene_oil_pro-energy-oil-production)... there's a long way from that to 0 in 11 years.

The geology question, of how much actual oil a country has, is mostly useless, since it only matters what you figure you can extract. But very reasonable people can have very reasonable disagreements on those numbers, with no one lying. Are the saudi's lying about their oil reserves? Probably not, at least, not significantly, at the current rate of production saudi arabia will run out of officially declared reserves... in 130 years (10 million barrels/day, 430 billion barrels of declared reserves). If they're lying by 40%, then they're lying about a problem that will manifest in the late 2070's or 2080's. That's a long time to hold onto a lie for relatively little gain, since shit will hit the fan either way. Can they disagree with the americans on what exactly the source of that will be? Certainly.

Essentially you could say the same thing about the US. If the figure the price of oil will be > 100 bucks a barrel (in todays dollars) then shale deposits suddenly become economically viable, given the US the largest reserves in the world, by a lot, if the price of oil is less than 70.. well then shale isn't viable to extract. Caveat: I'm not 100% sure on those numbers (100 and 70) but they're good enough to illustrate my point. Now anything in between and we have a fairly difficult calculation.

The Saudis could easily be lying about how long they can keep cheap production of 10 million barrels a day up. But I'm not sure how much of a problem that is, or how much difference it would make, since the price of oil is something like 4 or 5x the cost of most saudi oil, I'm sure for that much money they'll find something. It might be convenient to pay lip service to the americans and say 'oh yes Mr president we'll keep supplying cheap oil and keep the price down just give us more F15's' when they're still marking it up 300% (and that would still bring the cost down), but it's in their interest to convince the americans they're trying to keep oil cheap, when they probably can't do much about the price of oil anymore (by themselves), while at the same time letting the price go sky high. They roll in money while sounding like a good guy. And if they have been lying.. oh no the price of oil goes up? They only need to keep the lie going long enough for China or India to look like a better ally than the americans. And frankly, the chinese are much more natural allies to a ruthless authoritarian state than the americans.

Oh the horror (2)

PPH (736903) | more than 3 years ago | (#35166658)

This means we will be at the mercy of the Canadians.

Great, just when gas dropped below $3 again... (1)

Culture20 (968837) | more than 3 years ago | (#35166866)

Now the gas stations have an excuse to raise prices another $0.50 like with these winter storms.
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