A number of years back, prominent energy analyst Matthew R. Simmons, in his Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy, stated that Saudi Aramco and other oil producers routinely overstated their reserves, and this claim is now being seconded by Saudi Aramco itself, which recently admitted that the famous Gwaihir field, the world's largest oil field, is showing distinct signs of exhaustion and that its production might peak as early as 2015.
Other voices are now chiming in. Scientists and researchers from Oxford University in UK state that global oil reserves are overstated by a third by producers, Saudi Aramco prominent among them, in order to bolster investment and market share. Additionally, a paper published recently by these researchers states, such authorities as the ever-optimistic International Energy Agency (IEA) and Energy Information Administration (EIA), and political leaders who rely on these agencies for policy guidance, have taken these overly optimistic estimates at face value even though they have been unofficially recognized as exaggerated among oil insiders for many years.
The Oxford researchers also point out that "unconventional" sources of oil such as the Canadian tar sands and deep-water offshore fields are also included in reserve estimates. While these sources certainly count as reserves, they are extremely expensive to exploit and oil prices must rise substantially to justify their production. These difficult-to-access sources of oil most likely will become our principle sources in a few years, as the "elephant" fields in the Middle East, Mexico, Russia, and South America pass their peak production. Production from Mexico's formerly massive Cantarell is collapsing , and Mexico, which has been a major supplier of oil to the fuel-guzzling U.S. will soon cease to export oil.
Here in the United States, the world's most energy-dependent nation, we are airily complacent and inert in the face of declining global oil supplies and rapidly increasing global competition for the remains, while other hungrier and less complacent industrial economies, notably cash-rich China, are not taking their futures for granted and are aggressively locking up future supplies of dwindling natural resources. American political leaders are coming late to recognition of the direness of the fossil fuel situation, and even as they unwillingly, and almost in passing, acknowledge that supplies might be a problem in some distant future, that we have plenty of time and in any case can switch to natural gas, another resource subject to peaking and inevitable decline as we ramp up consumption.
We will probably need $4 a gallon gasoline and deeper economic hardship as a result, to shake us awake and motivate us to do what we desperately need to do, which is develop new means of energy production and most of all change the way we live, consume, and inhabit the land. By then, it will be too late to mitigate the effects of a sudden and drastic contraction in available fuel supplies.