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Saudi Arabia’s Plan to Extend the Age of Oil

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Re: Saudi Arabia’s Plan to Extend the Age of Oil

#61
post #25

Earlier quoted context omitted.

Haven't we been moving away from oil for at least 40 years, since the U.S. oil crisis in the 1970's? Carter put solar energy in the White House. Are we on the 100 plan to move away from oil?

No, consumption fell in the 1970s and 1980s, but rose again after that, until the 2008 crisis, when it did fall again. But it is higher than the time of the oil shock.

I think you missed the rhetorical question. The world has been trying to move away from fossil fuels since at least the 1970's. We've spent billions (trillions?) on research, tax credits, ethanol in gas, etc and it seems like we've barely moved the needle. WTF?

It's interesting to read about a new super efficient solar cell on HN every few months, but at some point shouldn't we try to figure out what'll it really take to solve our energy problem?

Re: Saudi Arabia’s Plan to Extend the Age of Oil

#62

Earlier quoted context omitted.

The concept of peak oil is fine (almost self-evident), just the timing has been off. Theories are easier than predictions.

Although Peak Oil won't really happen if demand drops before we hit the supply peak. We might transition to renewables and eventually fusion and never actually experience the specific dynamic Peak Oil envisioned.

We're almost certainly talking about a period inside the next ten years. You think solar is good to go on a massive scale so soon? I don't.

The shale and tar sands stuff is a bit of a joke. We're talking total proven reserves equivalent to something like six years of US consumption. I'm sure it has made some people rich and will make others rich, but it means approximately nothing in the grand scheme of things.

Very few people understand the financial dynamics of Peak Oil. We're seeing them play out right now. As the cost of extraction goes ever upwards, there is tremendous deflationary pressure throughout the economy, because the issuance of new credit is intimately tied to the availability of cheap energy. A plunging oil price and bankrupt drillers is exactly what you would expect at Peak Oil.

http://www.economic-undertow.com/2015/02/09/fatal-ignorance/

Re: Saudi Arabia’s Plan to Extend the Age of Oil

#63
post #60

Here is my brother's pet theory on why the price of oil fell. Saudi Arabia wanted the USA to intervene against ISIS. The USA wanted the price of oil the fall to hamper Russia and Venezuela. Russia because they are getting aggressive and doing things in the Ukraine and Syria that we don't like. Venezuela because they are the center of anti-Americanism in South and Central America. Which is exactly what happened. We bo…

US production has gone up substantially:

http://www.eia.gov/cfapps/ipdbproject/iedindex3.cfm?tid=50&p...

I tend to think that there is some connection between the lack of production cuts from Saudi Arabia and ISIS/Russia politics, but it can also be the case that they can't afford to cut roughly 1/3 of their production.

Re: Saudi Arabia’s Plan to Extend the Age of Oil

#64
post #60

Here is my brother's pet theory on why the price of oil fell. Saudi Arabia wanted the USA to intervene against ISIS. The USA wanted the price of oil the fall to hamper Russia and Venezuela. Russia because they are getting aggressive and doing things in the Ukraine and Syria that we don't like. Venezuela because they are the center of anti-Americanism in South and Central America. Which is exactly what happened. We bo…

No. The price has fallen as demand has waned, or at least did not match expectations as global GDP expectations fell.

Normally Saudi would reduce supply to keep the price up. But they've taken the opportunity to attack their biggest threat: US Shale oil. By keeping production up, the price has dropped and that is pushing shale oil extractors out of business: these guys need ~$60/barrel to be profitable. It's having a real impact - just look at the US High Yield sector. Firms are going bust, credit spreads are blowing wider and investment in the sector is dropping.

So when enough investment in Shale is killed off, the Saudis will reduce supply... jacking up the price and happy days for them.

Re: Saudi Arabia’s Plan to Extend the Age of Oil

#65
post #60

Here is my brother's pet theory on why the price of oil fell. Saudi Arabia wanted the USA to intervene against ISIS. The USA wanted the price of oil the fall to hamper Russia and Venezuela. Russia because they are getting aggressive and doing things in the Ukraine and Syria that we don't like. Venezuela because they are the center of anti-Americanism in South and Central America. Which is exactly what happened. We bo…

Why would Saudi Arabia be against ISIS, except as a rival? Wahhabism originates in Saudi Arabia.

http://www.independent.co.uk/voices/comment/iraq-crisis-how-...

Re: Saudi Arabia’s Plan to Extend the Age of Oil

#66
"Demand destruction" is nonsense. There will always be demand for hydrocarbons. Oil and its distillates remain the only viable means of fueling most motor vehicles, Tesla's hype machine notwithstanding. Even if you could somehow find the trillions of dollars needed to electrify every railway in the world and the tens of trillions more to build enough lithium batteries to replace every auto on the world's roads with an electric one (assuming you didn't use that lithium for grid-tied residential storage instead), you would still have shipping, industrial processes, home heating, forklifts, barbecues, remote residential, mining, and forestry applications, trucking, job site, datacenter, and medical generators, legacy power plants, and countless other sources of demand for petroleum products. Plus some that probably don't even exist yet (many of which may well be carbon-neutral, unlike fuel applications). The notion that $150 oil's modest pinching of SUV drivers' wallets will magically make all of the above go away is lunacy.

This is great for all the shale and other high-cost producers, at least for those with patient investors. The Saudis are setting things up so that the folks with shale will be the last people with accessible oil. The sooner the shale producers shut down, the more oil they'll have available to sell later at prices vastly higher than any ever seen. Meanwhile, the Saudis will have pumped their fields dry at rock bottom prices, minimizing their total return. Economically speaking, this is the biggest gift to the US and Canada that the Saudis could possibly make. All that's left is for investors in shale to sit tight, or failing that to sell out to wiser ones at fire-sale prices. Keep careful watch on who buys up the leases from bankrupt shale producers over the next year or two; if they have the right attitude they will be worth a dozen fortunes a few decades down the road.

Thanks, Naimi!

Re: Saudi Arabia’s Plan to Extend the Age of Oil

#67
post #60

Here is my brother's pet theory on why the price of oil fell. Saudi Arabia wanted the USA to intervene against ISIS. The USA wanted the price of oil the fall to hamper Russia and Venezuela. Russia because they are getting aggressive and doing things in the Ukraine and Syria that we don't like. Venezuela because they are the center of anti-Americanism in South and Central America. Which is exactly what happened. We bo…

The weaponization of oil, finance, commerce, internet, democracy and the list goes on and on for the US.

Re: Saudi Arabia’s Plan to Extend the Age of Oil

#68
This is a basic challenge to our attempts to get off fossil fuels. The only way for alternative energy sources to be viable is if they are cheaper than fossil fuel. But since fossil fuel supply outstrips demand, and prices have been set since the 1970s by cartel rather than market forces, there's always been the potential for the cartel to simply drop prices through the floor if they felt it would advance their interests.

That time is here.

But as Ghandi said, first they ignore you, then they laugh at you, then they fight you, then you win. They've gone from laughing at alternative energy to fighting it.

Re: Saudi Arabia’s Plan to Extend the Age of Oil

#69

Earlier quoted context omitted.

Do you think Africa, China, India all think like that? Most of whom are living on or below the poverty line? They'll be driving old put-puts and crappy desel trucks, tractors and cars for tens of years to come. How long before second/third hand electric cars are being exported in tens or hundreds of thousands to these countries? 50 years? No one I know drives a NEW car, and I live in the UK. We all wait for 2nd/3rd h…

Well India has very large kerosene subsidies for the poor, which they are managing to cut because prices have fallen. Replacing these with solar subsidies would make a huge difference, and cut fossil fuel use. And e-rickshaws took off quite fast. The UK had new car sales of almost 2.5 million last year, ridiculously high, the highest in Europe, thats almost 10% of households bought a new car/

10% of households bought a new car, and that means that the average lifespan of a car with its FIRST owner must be on average 10 years. Cars might last 20-30 years in the UK as the previous poster pointed out, and longer in the rest of Europe which is already "rich" relative to India. I think you're proving his point exactly.

Re: Saudi Arabia’s Plan to Extend the Age of Oil

#70
post #65
post #60

Here is my brother's pet theory on why the price of oil fell. Saudi Arabia wanted the USA to intervene against ISIS. The USA wanted the price of oil the fall to hamper Russia and Venezuela. Russia because they are getting aggressive and doing things in the Ukraine and Syria that we don't like. Venezuela because they are the center of anti-Americanism in South and Central America. Which is exactly what happened. We bo…

Why would Saudi Arabia be against ISIS, except as a rival? Wahhabism originates in Saudi Arabia. http://www.independent.co.uk/voices/comment/iraq-crisis-how-...

Because the House of Saud (ie the royal family) are relatively secular people whose main interest is in maintaining power in a country of extremists. They are willing to fund their own radicals to keep from having a revolution. But at the same time they are scared that those same radicals will some day decide the royal family is too corrupt to lead a pure Islamic state.

ISIS represents exactly the kind of movement that they are afraid would lead to this result.

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