• Feb 9th 2011 at 3:24PM
  • 94
Peak oil, according to Wikipedia, is the point in time when the maximum rate of global petroleum extraction is reached, after which the rate of production enters terminal decline. Opinions vary on when the world will actually reach a peak oil scenario, but a new report detailed by Julian Assange's infamous Wikileaks website indicates the United States believes it's staring us right in the face – as early as 2012.

Maybe that's what the Mayan calendar is on about?

It may not exactly be the end of the world as we know it, but if the report is accurate, it could mean death to a number of popular vehicular segments; namely the gas-guzzling sport utility vehicle, heavy-duty pickup truck and possible even the mainstream performance car. Electric and hybrid Mustang and Camaro models might not look so bad in the very near future, eh?

This revalatory report centers around a meeting between Sadad al-Husseini, a geologist and former head of exploration at Aramco (the state-owned national oil company of Saudi Arabia), and U.S. officials. Husseini, an expert on the subject, suggested that Saudi Arabia doesn't have as much oil left as the country wants us to believe and that it is unlikely to continue producing its current rate of 12.5 million barrels per day.

None of this is to say that the world has run out of oil – far from it, in fact – but it does mean that Saudi Arabia, the largest country in the Middle East and the country that's thought by experts to hold about one-fifth of the world's proven total petroleum reserves, won't be able to provide enough oil to keep the world operating as it does today.

If nothing else, this report gives us reason to believe that oil prices won't stay nearly as low as they currently are, and that large-scale price increases could happen sooner rather than later. Thanks for the tip, Glenton!

[Source: Yahoo News | Image: Marwan Naamani/AFP/Getty]

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    • 1 Second Ago
      • 4 Years Ago
      Ducman69--If the incremental cost of extracting more oil is truly a fraction of the price of a barrel of oil, then why do the major oil companies sit on billions of dollars of cash and buy back their own shares instead of producing additional oil (which would benefit their earnings, the share price and the senior management of the company?
      • 4 Years Ago
      "this report gives us reason to believe that oil prices won't stay nearly as low as they currently are, and that large-scale price increases could happen sooner rather than later."

      I really truly hope that you guys don't believe that oil prices are low at the current time. They are not, and we have already seen large-scale increases in price for no apparent reason, except for the hell of it, due to oil speculators and their whims, this being one of them. Now watch as the price goes up in the next day or two.
        • 4 Years Ago
        Prices aren't low at all compared to what we are used to, but when you consider how much energy and what useful functions a barrel of oil provides, by that measure oil is ridiculously cheap and a terrific bargain, even at today's comparatively high prices.
        • 4 Years Ago
        Nick, the oil you buy is so expensive because your government taxes it so much.
        • 4 Years Ago
        Well, you just need to get out more. Yes gas in the US is more expensive than it has been in the past but what AB is saying is the days of gas being a cheap commodity are probably ending. No more would gas bounce around $2-3/gal and be something you just buy without really thinking about it. After peak oil gas would presumably begin a gentle upward climb to 3, 4, 5, 6, 7 dollars over time. And people would say "Sorry kids, I know you want to drive to the lake but gas is expensive. Let's walk to the park instead".
      • 4 Years Ago
      The world of Mad Max here we come.
        • 4 Years Ago
        I don't think it's going to be that exciting.
        • 4 Years Ago
        Oh I think it is going to very exciting. Anarchy always is.
      • 4 Years Ago
      Here we go, Just to say they are running out ot oil will raise proces, Someone over there could fart and our oil prices will go up. The Oil companys wii raise gos prices on a drop of a hat The oil companys take any reason to raise oil prices. Any reason, They are not fooling the American People.
      • 4 Years Ago
      very deep analysis, thank you for your contribution to the discussion
      • 4 Years Ago
      and China hasn't even started to drive cars yet!
      • 4 Years Ago
      Wikileaks is a propaganda front.
      • 4 Years Ago
      I'm not surprised at all, and I'm a petroleum engineer.

      Since the Saudis nationalized the oil industry in the early 1980s, they have increased their recoverable reserves by hundreds of billions of barrels. When I say they are booking reserves it is a complete mystery how they are doing it since they are not audited by third parties like other international oil companies. Granted, the Ghawar field is unlike anything else out there, but it should be showing at least some evidence of depletion after 70 years of continuous production. If you believe what Aramco says, it has actually increased in size.

      Basically we take them at their word when they tell us all they have to do is open a spigot to increase daily production by 20%.
      • 4 Years Ago

      Their "freedom" of information isn't complete. They often publish the views of one or a few individuals that DO NOT reflect the policies or opinions of the entire country or their government.

      We'll now have increased oil prices because greeding oil companies will jump on it as an excuse to raise prices. They published only part of the story and I'm sure there was very little if any validation.
      • 4 Years Ago
      Ethanol from algae looks like a good possible solution... we could keep our much loved combustion engines and our food source (compared to corn or soybean based ethanol)!

      These guys seem ready to take action: http://www.algenolbiofuels.com

        • 4 Years Ago
        You can make gasoline and diesel from algae if you genetically engineer it the right way. The result is indistinguishable from the stuff you put in your tank. That's the future.

        Or butanol, which burns at the same temperatures and has a similar energy content.

        And then, biodiesel from algae is a better choice than biodiesel from vegetable sources; because it gels at a far lower temperature (lower even than dinodiesel!), plus it makes the engine run smoother because it's all lubricant. The only downside is the 5% lower energy content. (I'm going by a paper I read from a Chinese source about 3 years ago.)
      • 4 Years Ago
      And why did we invade Iraq again ?
      If I ever give Bush and Cheney credit for anything, its that they saw a problem and thought ahead. As much as it disgusts me.

      4-5 years from now you'll be hearing about a mammoth Iraqi oil boom.
      http://www.iraqoilreport.com/ And perhaps after that we'll hear about easing of the Caspian basin resources to Asia ? ... who knows.

      Meanwhile we're in for a bit of a bumpy ride, my advice, start looking at long term alternatives to gasoline now, whatever you drive.

      Further reading on peak oil -

      Lloyds 360 Risk assesment on sustainable energy security 2010

      Joint Forces Command - Joint operating environment report 2010

      • 4 Years Ago
      When oil starts to run out, all fossil fuels will go up in price. Coal-burning electricity which will power electric vehicles will go up in price too. Electric vehicles is by no means a solution to high prices, only to energy security in countries lacking access to substantial natural gas reserves. Countries that already do have such access will probably continue to use internal combustion vehicles quite longer, and this will include Europe, Russia and Middle East.
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