I thought this item by Stuart Staniford was interesting. Staniford comments on a Guardian article about a Wikileaks cable quoting Sadad al-Husseini (former head of exploration at the Saudi oil monopoly Aramco). According to the leaked cable, Husseini told the State Department in 2007 that the Saudis were overstating their ability to increase production. Staniford explains in Wikileaks confirms Saudi reserve overstatement that Husseini’s private statements match what he (Staniford) was already arguing back in 2007 about the Saudis overstating their excess capacity, based on his own analysis of the available evidence:
At the time, Euan and I were introduced by email to Sadad al-Husseini by the ASPO-USA guys, and he did not feel comfortable confirming to us that Saudi reserves were overstated. But apparently, he did feel comfortable confirming that to US diplomats in private. Also, it appears that I got the degree of overstatement pretty much correct.
The reason this matters is that the Saudis’ excess capacity (or lack thereof) is a key factor in assessing when we are likely to begin to experience the effects of peak oil. In Staniford’s view, we’re basically there now. That is, future increases in oil demand will tend to outstrip supply, leading to scarcity and price shocks no matter what groups like OPEC try to do about it.