Potential oil reserves are often treated as a state secret. This is especially true in Saudi Arabia, the world’s largest oil producer. But soon, the cheap energy bonanza could be on the downturn, according to US State Department documents released by British newspaper The Guardian.
The documents, dated between 2007 and 2009, point to a phenomenon known to many as “peak oil,” or the point of production where you cannot continue producing more, leading to a decline in availability and a spike in prices.
But far from being a mad prophet of doom, the US cables’ source is not someone whose credibility is easily questioned.
His name is Dr. Sadad al-Husseini, the former head geologist in charge of exploration for the Saudi oil firm Aramco. He retired in 2004, but stayed in touch with US officials.
According to al-Husseini, Saudi Arabian reserves may be smaller than thought, even though the Saudis are on a growth cycle aimed at pumping out over 12 million barrels a day over the next several years. But, al-Husseini warned, global output would likely peak before then, and potentially starting in 2012.
“Our Mission now questions how much the Saudis can now substantively influence the crude markets over the long term,” one of the cables noted. “Clearly they can drive prices up, but we question whether they any longer have the power to drive prices down for a prolonged period.”
A decline in production in Saudi Arabia would likely send global oil prices soaring, with demand far outpacing supply.
“A series of major project delays and accidents XXXXXXXXXXXX over the last couple of years is evidence that Saudi Aramco is having to run harder to stay in place – to replace the decline in existing production,” the document continued. “Additional production would likely come from increasingly heavy crude which the world lacks sufficient capacity to easily refine. The Saudis appear dis-inclined to discount its heavy crude sufficiently, so the market is dis-inclined to purchase it. In neighboring Iran, the regime is now purchasing floating storage for heavy crude which has no takers. While this Mission is far from embracing doomsday ‘Peak Oil’ theorists, Saudi Aramco’s challenges are significant.”
In another cable, al-Husseini argues that Aramco may have been overstating their potential for production all along — by the vast sum of over 300 billion barrels in “speculative resources.”
“According to al-Husseini, the crux of the issue is twofold,” the cable explains. “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 executives and energy optimists would like to portray.”
Another cable shows how, even in the world’s wealthiest oil producing nation, concerns about potential output and catching up to other developed nations renewable energy technology has spurred innovation.
The document noted that Saudi electricity demand was expected to grow at 10 percent a year for the next decade. The consequence, it added, is that Saudi Arabia will have to constrain exports in order to drive up oil prices, allowing them to pay for doubling their electric grid capacity by 2018.
This video is from Al Jazeera English, broadcast Wednesday, Feb. 9, 2011.
California governor signs law making gig workers employees
California Governor Gavin Newsom signed legislation Wednesday which could slam the brakes on the so-called "gig economy" by requiring rideshare firms to treat contract drivers as employees, challenging the economic models of giants such as Uber and Lyft.
The legislation, which is being closely watched in other states, responds to critics who argue that rideshare firms shortchange contract drivers by denying them employee benefits.
Health fears prompt Swiss 5G revolt
Switzerland was among the first countries to begin deploying 5G, but health fears over radiation from the antennas that carry the next-generation mobile technology have sparked a nationwide revolt.
Demonstrators against the technology are due to fill the streets of Bern later this month, but already a number of cantons have been pressured to put planned constructions of 5G-compatible antennae on ice.
The technology has been swept up in the deepening trade war between China and the United States, which has tried to rein in Chinese giant Huawei -- the world's leader in superfast 5G equipment -- over fears it will allow Beijing to spy on communications from countries that use its products and services.
Zuckerberg: new Facebook panel can overrule him
Facebook said Tuesday it has finalized its charter for its "independent oversight board," giving the panel the authority to overrule chief executive Mark Zuckerberg on questions of appropriate content.
The new entity, based on Zuckerberg's call for a "supreme court" that would make difficult calls on what is suitable content for Facebook, is moving closer to reality with the charter released by the social network.
Zuckerberg said in a statement the independent panel would have the final say on these matters of what belongs on the social platform.
"If someone disagrees with a decision we've made, they can appeal to us first, and soon they will be able to further appeal to this independent board," he said.