Oh, geez, Lousie: Here we go. WikiLeaks just pulled the rug out from under the Saudis by publishing the contents of some cables about their oil production — and the fragility thereof. The potential lack thereof. Where have I heard this before? Let me think . . . Oh, yeah, just about everywhere. For years. The only difference is, this comes from the Kingdom itself. This is not good. This is bad, even. Very, very bad.
Look, it’s one thing for a guy like me to sit on the other side of the world and speculate on what might be happening, oil-wise, in the Empty Quarter of the Arabian Peninsula. I’m speculating. That’s a nice word for guessing. I’m making it all up. But as it turns out, I was guessing right. So were a lot of other people, as it turns out. Everyone but the Saudis, it seems. For years (for decades), the Saudis have stood there and smiled and said there were no problems. Everything is fine. Don’t worry. Be happy. And for all of those years, we bought the act. We wanted to buy the act. We had to buy the act.
Back in 2001, I wrote Ghawar is Dying, a short essay for The New Colonist web site, outlining how the beginning of the end might, well, begin. I caught some flak from oil types for it. They wanted to know how I gained access to the restricted oil fields in the middle of the Saudi desert. They were not happy, and I don’t think they believed me when I said I’d never been there. I made the whole thing up, but as it turns out, I think I might have been right. And that was ten years ago.
In 2004 I wrote Sixty Days Next Year, also for my good friends over at The New Colonist. The fictitious events in “60 Days” have yet to come true, but the headlines of the past few weeks out of Egypt show that all things are possible in a great big hurry, and those 60 days could start tomorrow. Please, just remember: I was never there and it’s not my fault. Seriously. It was supposed to be fiction.
If the cables exposed by WikiLeaks portend events yet to come, as in coming soon, we are all in for a wild, wild ride. If the Saudis can’t smooth this one over, we are staring the great peak oil monster right in the face; and buddy, whatever you do, don’t blink. If the Saudis admit they are facing peak oil production, we may see the price of oil rise like a bottle rocket. I remember the Arab Oil Embargo of 1973. The loss of just 5% of the world’s oil supply caused the price of oil to quadruple. Quadruple. With oil bouncing around $90 when I checked it the other day, are you ready for $360 oil? No. No you aren’t. No one is.
Best case scenario: The Saudis do what the Saudis do better than anyone else on earth: They smooth it over. They schmooze. They smile and talk their way out of it. And in all honest, I do sincerely hope they can. Worst case scenario: Gasoline in the United States goes to over $10 a gallon in very short order, and is rationed like you wouldn’t believe. I remember the gas lines in ’73. I drove a VW back then, so it was no big deal. This time around, it will be different. It won’t be a four-month political event. It will be permanent.
My advice to you: If you don’t have a good, practical bicycle, go buy one, and soon. If you do have a bicycle, go buy baskets for it, fenders, a good lock and some lights. And buy a bicycle helmet, rain cape and cycling gloves while you’re at it. You are going to want all of that, and very soon. I hope I’m wrong. I hope the Saudis can schmooze their way out of this one, as they have in the past. But if they can’t?
Welcome to our brave new world. Just don’t say I didn’t warn you.
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