Peak Shmeak -- oil in abundance

A two-fer. First, there was a report from a Saudi official that the oil reserves of Saudi Arabia have been greatly overstated and that there is precious little oil left there. Bullshit. From the New York Times:

Drilling for an Oil Crisis
As WikiLeaks�s trove of diplomatic dispatches continues to trickle out, one recent release has caused quite a stir: a cable from an American diplomat who said he was told by a Saudi oil executive that both official estimates of Saudi oil reserves and their ability to meet global demand in the long run have been vastly exaggerated. In turn, many proponents of �peak oil� theory, the idea that the global rate of oil production has entered a terminal decline, have insisted that the cable confirms their view on resource scarcity.

Actually, it does nothing of the sort. The Saudi executive, Sadad al-Husseini, a former head of exploration for the Saudi oil monopoly Aramco, has been making such claims for years. Finding them repeated in a confidential cable is news only to those unfamiliar with the field.

More important, his claims don�t stand up to scrutiny. For one thing, according to the cable, Dr. Husseini said that estimates of Saudi �reserves� were exaggerated by some 300 billion barrels. But this is impossible, as the Saudi government�s estimate of proven reserves is actually less than that amount � roughly 267 billion barrels.

More likely, Dr. Husseini was referring to claims by some Saudi oil executives that, over the long term, they expect to find 900 billion barrels in the ground, and that 51 percent of it will be recoverable. So the dispute has nothing to do with current reserves, but with projections that are speculative by definition. Aramco�s numbers may be an educated guess, but experts in the field know they are just a guess.

And, in fact, they are hardly an unreasonable estimate. While peak-oil advocates have in the past ridiculed optimistic industry expectations, the evidence continues to confound them. Over recent decades, the consensus estimates of the amount of recoverable oil on the planet have roughly doubled. And recovery rates � the percentage of those reserves that we are technologically able to collect � have grown from 10 percent a century ago, to 25 percent a half-century ago, to an estimated 35 percent now. In some areas, like the North Sea, the figure is above 60 percent.

There are several other reasons to remain calm about Saudi reserves. Officials there have discovered approximately 70 major oil fields that they have left untapped over concerns that increased Saudi production would cause global oil prices to collapse.

Remember that Chicken Little was dead wrong. Second -- we don't even need to touch ANWR -- a few offshore platforms and our oil production would rise to become the eighth largest in the world. From CNS News:

New Study Shows That Offshore Drilling Could Make Alaska the Eighth Largest Oil Producer in the World � Ahead of Libya and Nigeria
A new study says drilling on Alaska�s Outer Continental Shelf (OCS) could make Alaska the eighth largest oil resource province in the world -- ahead of Nigeria, Libya, Russia and Norway.

The report -- by the consulting firm Northern Economics and the University of Alaska-Anchorage�s Institute of Social and Economic Research -- says that developing Alaska�s OCS could produce almost 10 billion barrels of oil and 15 trillion cubic feet of natural gas, create around 55,000 new jobs and produce $145 billion in new payroll nationally, generating a total of $193 billion in government revenue through the year 2057.

A senior policy advisor with the American Petroleum Institute, the trade group for hundreds of U.S. oil and gas producers, said in a statement about the study that offshore drilling for oil and natural gas can help with the country�s energy and economic needs.

�America will need all forms of energy to get our economy back on track, and that includes oil � we can either produce it here and create more American jobs or import it and create jobs elsewhere,� Richard Ranger said. �The administration and Congress need to adopt an �all of the above� energy approach that leverages our offshore resources in Alaska to create an energy plan for America that boosts, rather than inhibits, our economy.�

About 77 percent of world oil reserves are owned or controlled by national governments and the U.S. currently imports over 60 percent of its crude oil, according to API. The Northern Economics-University of Alaska study estimates that Arctic offshore development could cut U.S. imports by about 9 percent over 35 years.

With crude over $100/barrel and $5 gasoline on the horizon, we need to get moving. Green energy is a trivial feel-good sideline and it never has been and it will never be a legitimate contendor...