Saturday, January 21, 2006

Peak oil: done deal


OPEC producer Kuwait's oil reserves are only half those officially stated, according to internal Kuwaiti records seen by industry newsletter Petroleum Intelligence Weekly (PIW).

"PIW learns from sources that Kuwait's actual oil reserves, which are officially stated at around 99 billion barrels, or close to 10 percent of the global total, are a good deal lower, according to internal Kuwaiti records," the weekly PIW reported on Friday.

It said that according to data circulated in Kuwait Oil Co (KOC), the upstream arm of state Kuwait Petroleum Corp, Kuwait's remaining proven and non-proven oil reserves are about 48 billion barrels.

Officials from KOC were not immediately available for comment to Reuters.

I am just one of a large number of folks who have been talking about peak oil for some time. Until now, those apocalyptic visions have been countered in general circulation by the kind of mythology Kuwait was perpetrating, and no one wanted to pay attention.

But this process of restating reserves is now past trickle, and well on its way to torrent. Recall that Shell admitted in 2004 that its reserves were overstated by 20%. It is widely believed that Saudi Arabia has been deep fat frying its reserve numbers as well. The Saudis claim to have 25% of the world's reserves. If the fudge factor in their numbers is anything close to Kuwait's, we are in deep, deep doo-doo. We are screwed either way, of course, but the price shock will be inconceivably violent if Saudi Arabia is revealed to have half the oil we think they do.

So the good news is that when unleaded hits $6 a gallon you will be able to get a helluva deal on a Hummer. The bad news is that the economy will crash so hard you will have to put it up on blocks and live in it.


Blogger <-<--esoder<---<----<----- said...

Does Hummer make a diesel? I'll get the conversion kit and run it on used vegetable oil.

In my neighborhood, the real estate agents drive Hummers. The men drive jacked up Hummers with 22 inch wheels. It's about the most ridiculous looking thing I've seen. And at the same time, it appeals to the little boy in me - like having a big Tonka truck.

9:25 PM  

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