Friday, March 11, 2011

Good morning,

Is peak oil a boogey man that alternative fuel advocates
and environmentalists like to trot out to scare people,
or is it a real threat that is right around the corner?

Perhaps a recent story from the Wall Street Journal online
will give us some insight. Saudi Arabia, the world's most
important oil supplier, might be misleading the world about
its oil production since late last year.

They were supposed to have increased output to make up for
the production shortfalls caused by the unrest in other oil
producing countries recently, but they haven't increased
their output by nearly as much as promised.

Why? Are they lying about their production capacity so that
the world will not know they are already producing as much
as possible. And if they are currently at peak capacity,
that means the only way for production to go in the future
is down.

Please scroll down for some informative excerpts from this
story.

Thanks for reading,

Your Living Green editor

Email the Editor


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Goldman Sachs has accused Saudi Arabia, the world's most
important oil supplier, of misleading the world about its
oil production since late last year.

If true, this allegation would mean that the Organization
of Petroleum Exporting Countries has far less spare pro-
duction capacity to make up for the disruption of Libyan
supplies than it claims.

Spare capacity is important, because the size of this supply
buffer has a close relationship to oil prices. According to
analysis by Bernstein Research last week, when spare production
capacity diminishes, prices tend to rise because markets are
more fearful of unexpected supply disruptions.