Tapped out In 2000 a Saudi Oil Geologist named Sadad I.Al Husseini made a startling discovery.Huseini,

Then head of exploration and production for the state-owned oil company,Saudi Aramco,had long been skeptical of the oil industry's upbeat forecasts for future production.Since the mid-1990s he had been studying data from the 250 or so major oil fileds that produce most of the world's oil.He looked at how much crude remained in each one and how rapidly it was being depleted,then added all the new fields that oil companies hoped to bring on line in coming decades.When he tallied the numners,Husseini says he realized that many oil experts were either misreading the global reserves and oil-production data or obfuscating it.


Where mainstream forecasts showed output rising steadily each year in a great upward curve that kept up with global demand,Husseubu's calculations showed output leveling off,starting as early as 2004.Just as alarming,this production plateau would last 15 years at best,after which the output of conventional oil would begin a gradual but irreversible decline.That is hardly the kind of scenario we've come to expect from Saudi Aramco,which sits atop the world's largest proven oil reserves-some 260 billion barrels,or roughly a fifth of the world's known crude-and routinely claims that oil will remain plentiful for many more decades.Indeed,according to an industry source,Saudi oil minister Ali al-Naimi took a dim view of Husseini's report,and in 2004 Husseini retired from Aramco to become an industry consulatant.But if he is right,a dramatic shift lies just ahead of a world whose critical systems,from defense to transportation to food production,all run on cheap,abundant oil.Husseini isn't the first to raise the specter of a peak in global oil output.For decades oil geologists have theorized that when half the world original endowment of oil has been extracted,getting more out of the ground each year will become increasingly difficult,and eventually impossible.Global outputmwhich has risen steadily from fewer than a million barrels a day in 1900 to around 85 million barrels today,will essentially stall.Ready or not,we will face a post-oil future-a future that could be marked by recession and even war,as the United States and other big oil importers jockey for acess to secure oil resources.




Forecasts of peak oil are highly controversial- not because anyone think oil will last forever,but because no one really knows how much oil remains underground and this how close we are to reaching the halfway point.So-called oil pessimists contend that a peak is imminent or has actually arrived,as Husseini believes,hidden behind day to day fluctuations in production.That might help explain why crude oil prices have been rising steadily and topped a hundred dollars a barrel early this year.Optimists ,by contrast,insist the turning point is decades away,because the world has so much oil yet to be tapped or even discovered,as well as huge reserves of unconventional oil,such as the massive tar-sand deposits in western Canada.Optimists also not that in the past,whenever doomsayers have predicted an imminent peak,a new oil-field discovery or oil-extraction technology allowed output to keep rising.Indeed,when Husseini first published his forecasts in 2004,he say optimists dismissed his conclusions as curious footnotes.



Many industry experts continue to argue that today's high prices are temporary,the result of technical bottlenecks,sharply rising demand from Asia,and a plummeting dollar.People will run out of demand before they run out of oil,BP's chief economist declared at a meeting early this year.Other optimist,however,are wavering.Not only have oil prices soared to historic levels,but unlike past spikes,those prices haven't generated a surge in new output.Ordinarily,higher prices encourge oil companies to invest more in new exploration technologies and go after difficult to reach oil fields.The price surge that followed the Iran-Iraq war in the 1980s,for example,eventually unleashed so much new oil that markets were glutted.But for the past few years,despite a sustained rise in price,global conventional oil output has hovered around 85 million barrel a day,which happens to be just where Husseini's calculations suggested output would begin to level off.