Hitting the reset button on Global Oil Supply

by anderson

Ten years ago, Project Censored listed as one of their top under reported stories in 1999:

Global Oil Reserves Alarmingly Over-Estimated

This being a Project Censored awarded story, of course, meant that the grim reality of the global oil supply continued on its path of destabilizing depletion with little, i.e. no, political attention.  Despite high profile cases that major oil companies were inflating their reserve inventories, as when in 2004, the SEC fined Royal Dutch Shell $120 million for fraudulent reserve inflation.  Constant questions have been raised about Saudi Arabia's own reserve claims and its projected rates of depletion, especially of the supergiant Ghawar oil field.

Much of this reasonable skepticism developed after the 1980's, when the curious case of observed oil inventory hikes were carried out by various OPEC nations.  In 1988, Saudi Arabia announced that it suddenly had 255 billion bbls of proven reserves, when, and without a single discovery of any note, the previous year's claimed proven reserves were 170 billion bbls, inventory inflation of 50% in one year.  Others were even bolder: 1985, UAE reserves jumped from 33B bbls to 97B bbls, a whopping 194% increase.  Overall, some 300 billion bbls of oil magically appeared in the global oil inventory.  No one knew why.

In lieu of the obvious, the conventional "wisdom" on world oil reserves remained unchanged until our current epoch.

But now yet another source has come forth to cast doubt upon our perceived comfort levels, and by extension, western industrialized society's ability to continue to provide those comfort levels.  A IEA whistleblower has stepped forward to expose these fanciful tales as just that:

The world is much closer to running out of oil than official estimates admit, according to a whistleblower at the International Energy Agency who claims it has been deliberately underplaying a looming shortage for fear of triggering panic buying.

The senior official claims the US has played an influential role in encouraging the watchdog to underplay the rate of decline from existing oil fields while overplaying the chances of finding new reserves.

The allegations raise serious questions about the accuracy of the organisation's latest World Energy Outlook on oil demand and supply to be published tomorrow � which is used by the British and many other governments to help guide their wider energy and climate change policies.

A second senior IEA source, who has now left but was also unwilling to give his name, said a key rule at the organisation was that it was "imperative not to anger the Americans" but the fact was that there was not as much oil in the world as had been admitted.

Much of western, especially American, resistance to admitting the reality of the oil supply come from at least two macro states: societal inertia and industrial inertia, or what might be described as both a psychology and a physiology of previous investment.  Admitting that those decades of big roads, big cars, and driven-in fry pits might be not be maintainable is simply not something Americans are prepared to hear.

In fact, US government and corporate agency have engaged in a now decades-long cover-up of the true state of global oil reserves.  The motives are numerous, none are justifiable.  The deceptions will only serve making any disposition of oil reserves, and access to them, a matter of panic and war, while thinking outside the oil drum is further marginalized by attention to shortages, insurgencies, and war will only grow to dominate to the oil problem parameter space.

Indeed, the US State Department had as much as admitted this state of oil affairs with Hillary Clinton's recent trip to Central Asia, where she lauded the Boiler-in-Chief Islam Karimov of Uzbekistan as a partner of the west as it scrabbles with Russia and China over the largely untapped oil and gas of Turkmenistan and Kazakstan.  Bear all of this in mind with the collateral US-Uzbek military agreement, and an EU in-concert suspension of a four year arms embargo.

All of which indicates that, while officialdom is certainly privately aware of the precarious state of the world's dwindling oil supplies, publicly they show no such concerns and either downplay or ignore reports that dispel the fiction of the world's inventory of oil stocks.  Meanwhile, in a dusty and far away land, vast supplies of weapons are being shipped into Central Asia states of Uzbekistan, Kazakstan, Turkemenistan and beyond, in preparation for an escalation in the bloody conflict for the world's increasingly scarce supplies of petroleum.