Forget Saudi Peak Oil—Worry About Peak Grain

To oil world watchers and worriers, the words Twilight in the Desert are instantly recognizable. That's the name of the book by energy investment banker Matthew Simmons, who used hundreds of internal documents to bolster his case that oil production has peaked or soon will be peaking in Saudi Arabia—home to what the world trusts as the largest source of petroleum reserves. But it turns out that long before we learn whether Simmons's prediction pans out, the sun is setting on another resource in the kingdom.

Grain production in Saudi Arabia is now down 42 percent from the peak of 4.9 million tons reached in 1994 and is now on track to decline rapidly in the coming years. Thanks to Lester Brown of the Earth Policy Institute for compiling these figures from the U.S. Department of Agriculture:

It's a stunning reversal for Saudi Arabia, which realized after its role in the Arab oil embargo of 1973 that it was vulnerable to retaliation. To protect itself, Saudi Arabia aimed to become self-sufficient in grain production, and to do that in its largely desert landscape, it tapped into a large fossil aquifer—a deep, ancient water source that is not replenished by rain or streams. As it turned out, the wells' days were numbered—even more surely than the days of the fossil fuel that Saudi Arabia pumps to the world. Thanks to water depletion, by 2016, Saudi Arabia will be one of the world's major importers of wheat, the U.S. Department of Agriculture projects. What price will Saudi Arabia pay for grain to feed its Texas-size population of 23 million, which is growing at a relatively rapid rate of 2 percent per year? The kingdom will be able to pay plenty, thanks to oil revenue that is growing exponentially, as these U.S. Energy Information Administration figures show:

Both The Oil Drum and Celsias have written extensively on the Saudi grain and water situation. But with the world already reeling because of skyrocketing food prices, we seem to be entering a new phase. A growing source of pressure on world food prices will be oil-rich states that are able and willing to pay top dollar to shore up their food supplies with imports. The latest reports are that Saudi Arabia is now seeking to invest in farms in Thailand, the world's largest rice exporter, to help secure its long-term food supply.