I was standing on a sand dune in Saudi Arabia’s Empty Quarter, the vast, rust-red desert where one-quarter of the world’s oil is found, when I lost my faith in the modern energy economy.

It was after sundown. The sky was dark blue and the sand still warm to the touch. My Saudi hosts had just finished showing me around the colossal oil city they had built atop an oilfield called Shayba. Engineers and technicians, they were rattling off production statistics like proud parents, telling me how many hundreds of thousands of barrels the field produced every day.

Saudi oilmen are usually a taciturn bunch, guarding their data like state secrets. But this was post- September 11 and Riyadh was wooing western journalists and trying to restore the Saudis’ image as dependable, long-term suppliers of energy — not suicidal fanatics nor terrorist financiers. And it was working.

Then the illusion slipped. On a whim I asked my hosts about another, older oilfield called Ghawar. It is the largest field ever discovered, its deep sandstone reservoirs at one time had held perhaps one-seventh of the world’s known oil reserves, and its wells produced roughly one of every 12 barrels of crude consumed on earth. In the iconography of oil, Ghawar is the mythical giant that makes most other fields look puny and mortal.

My hosts smiled politely, yet looked faintly annoyed — probably for the thousandth time, Ghawar had stolen the limelight. Like engineers anywhere, these men took an intense pride in their work and could not resist a few jabs at a rival operation. Pointing to the sand at our feet, one engineer boasted that Shayba was “self-pressurised” — its subterranean reservoirs were under such great natural pressure that, once pierced by the drill, the oil simply flowed like a black fountain.

“At Ghawar,” he said, “they have to inject water into the field to force the oil out.” By contrast, he continued, Shayba’s oil contained only trace amounts of water. At Ghawar, the engineer said, the “water cut” was 30%.

The hairs on the back of my neck stood up. Ghawar’s water injections were hardly news, but a 30% water cut, if true, was startling. Most new oilfields produce almost pure oil or oil mixed with natural gas — with little water. Over time, however, as the oil is drawn out, operators must replace it with water to keep the oil flowing — until eventually what flows is almost pure water and the field is no longer worth operating.

Ghawar will not run dry overnight, but the beginning of the end of its oil is in sight. As we drove back to the airstrip for my flight home, I couldn’t shake the feeling that the gods of energy might not be as powerful as I had imagined.

To me, Ghawar is the perfect metaphor for what is happening to the larger energy landscape. Like Ghawar, our energy economy has hit a kind of peak. Each year the world demands more and more energy, with no end in sight. And each year it is more and more evident that the extraordinary machine we have built to supply that demand cannot sustain itself in its present form.

Although, like most consumers, I’ve been a casual student of this energy anxiety since it began — early in the 1970s with the Arab oil embargo — I began exploring the question in earnest during the boom years of the late 1990s. I was writing about America’s growing infatuation with the “sport utility vehicle”, or SUV.

They consume a great deal of petrol: the Ford Excursion, for example, burns something like 4.6mpg in the city; even the more sensible models rarely do better than 18mpg.

The cumulative effect of so much unnecessary internal combustion is staggering. Since the SUV craze began in 1990, the 20-year-old trend in the United States towards improving automotive fuel efficiency is now sliding backward, dramatically increasing US demand for oil. And here is the rub: the United States doesn’t have enough of its own oil to meet that surging SUV-driven demand.

Despite being the third largest oil-producing nation in the world, America now must import even more oil from the much-maligned “foreign” producers — including many, like Iran and Saudi Arabia, whose populations regard the United States as an enemy. During the months leading up to the second war with Iraq, the United States was getting more than l0% of its imported oil from Iraqi fields.