OK, so maybe former Saudi Aramco executive vice president and board member Sadad Al-Husseini didn't use the phrase "we're screwed," exactly. But he might as well have, when you hear what he had to say this past Wednesday at a JP Morgan energy conference. While Al-Husseini doesn't believe Saudi Arabia is about to run out of oil, as Matt Simmons (
"Twilight in the Desert") has implied, "his other conclusions are no less chilling for consumers," according to a Dow Jones article I read today (sorry, no public link, apparently). Read on...and be "chilled."
First and foremost, Al-Husseini simply does not believe that
official long-term forecasts, such as those released today by the U.S. government's Energy Information Administration (EIA), "add up." According to Dow Jones:
[Al-Husseini] noted that forecasts by groups such as the U.S. Energy Information Agency that output will reach 119 million barrels a day within two decades are ill-informed. "I think that if we were to say that the future of the global economy depends on these numbers, we are taking some serious risks," he said.
Specifically, Al-Husseini believes that forecasts of huge oil output increases from Iraq and elsewhere are simply not correct. For instance, on Iraq, Al-Husseini comments:
...even ignoring the ruinous prospect of a civil war following the scaling down of the U.S. military presence there, decades of neglect have made this a long shot. "Anyone who's even looked at the Iraqi oil fields knows that staying at two million barrels is a problem."
As far as Iran is concerned, Al-Husseini believes that "decades of underinvestment dating back to the beginning of western sanctions" make any prospect of increasing Iranian output by 1 or 2 million barrels per day, as EIA and other forecasters have assumed, "suspect." And that's not even taking into account possible military confrontation over Iran's nuclear program, which could be coming as soon as next spring.
Al-Husseini is also pessimistic on the former Soviet Union, and certainly doesn't believe that forecasts of increased production to "17 million barrels a day from about 10.5 currently" are likely to occur.
The bottom line, according to Al-Husseini? "When you put these increments in the context of the EIA's massive increase, they don't add up." Considering the decline in production from mature fields around the world, and the continued voracious appetite for oil by the West, China, etc., Al-Husseini "sees an outcome far more dire for the energy-guzzling West, and in particular the United States...than for producers like Saudi Arabia."
And Al-Husseini doesn't even mention the environmental implications of increased oil output (up 35 million barrels per day between 2004 and 2030). So much for the Arctic ice caps and the polar bears!
Meanwhile, what are George W. Bush and the Republican Congress doing to wean us off of our oil addiction before it's too late? Here's a hint: does the word "nothing" mean anything to ya? Ha ha. Unfortunately, the joke's on us.