Diplomatic cables newly revealed by Wikileaks reinforce a widely shared suspicion that Saudi Arabia’s oil reserves are seriously limited. Oil prices — like all other commodities — have been surging again as the global economy recovers from the collapse of 2008 (which had been similarly precipitated by uncontrolled markets). In 2007, U.S. consul general John Kincannon met with Dr. Sadad al-Husseini, former Executive Vice President for Exploration and Production at Saudi Aramco, who told him that “a global output plateau will be reached in the next 5 to 10 years” and that Saudi Arabia’s oil reserves had been overstated:
The US fears that Saudi Arabia, the world’s largest crude oil exporter, may not have enough reserves to prevent oil prices escalating, confidential cables from its embassy in Riyadh show. The cables, released by WikiLeaks, urge Washington to take seriously a warning from a senior Saudi government oil executive that the kingdom’s crude oil reserves may have been overstated by as much as 300 billion barrels – nearly 40 percent. . . . According to the cables, which date between 2007-09, Husseini said Saudi Arabia might reach an output of 12 million barrels a day in 10 years but before then – possibly as early as 2012 – global oil production would have hit its highest point. This crunch point is known as “peak oil”.
Conservatives, just as they did in 2008, are continuing to promote a fantasy world of oil profligacy, in which Americans can offset their waste of energy by drilling for more. Even ignoring the terrible costs of the pollution caused by ripping up the planet for ever more hydrocarbons, the simple reality is that the United States doesn’t have sufficient reserves of petroleum to even make a dent in our current levels of consumption.
However, the Obama administration and much of the business community is moving forward with a genuine plan to win the future, by rapidly deploying an electric car infrastructure that can easily make the transition to renewable energy. Today, Chicago announced that it “has awarded a $1.9 million contract to a California firm to install 280 electric vehicle charging stations in Chicago and surrounding suburbs by the end of 2011.” The contract — “paid for with equal state and federal dollars though a grant from the American Recovery and Reinvestment Act — means the city has cleared a major hurdle on the road to widespread electric vehicle adoption.”
Obama wants to build upon the investment made in the recovery act by setting a goal of deploying one million electric vehicles across America by 2015, complemented by high-speed rail, doubled clean electricity production, and smart growth policies. Sen. Debbie Stabenow (D-MI) has introduced the Charging America Forward Act (S. 298), to fund rebates for electric cars and encourage the deployment of the smart grid and advanced batteries needed for a robust electric vehicle network.
If this Congress wants to protect us from oil shocks, it will support legislation like Stabenow’s to build a national infrastructure of electric charging stations for electric vehicles, deploy 21st-century high-speed rail, and curb oil profiteering by Wall Street. This transformation should be paid for by eliminating the billions of dollars of subsidies for the oil and gas industry. Or it can choose to “drill, baby, drill” a deeper hole of dirty fossil fuel dependence.
Hertz has been making some green moves lately by renting out electric vehicles. Now, they are taking green operations to the next level by installing solar panels at all locations. The first phase includes retrofitting 16 existing facilities with 2.3 MW+ solar systems and getting them operational by Q3 2011.