With oil cheap, Arab states cannot balance their books • Hacker News Board

Re: With oil cheap, Arab states cannot balance their books

#21

Post by vkou » Tue, Jul 21, 2020, 4:54 PM UTC

gerbal wrote: post #15

djsumdog wrote: post #10

I feel like this might go the other direction once the lockdowns end and once people realize a huge chunk of their "green" energy labeled as biomass is actually just burning down trees. Even if you use the fast growing forests used for paper in places like Oregon, there is still petroleum used in planting, cutting and fertilizing biofuel forests. In many ways, it's even worse for the environment than just burning the…

> In many ways, it's even worse for the environment than just burning the oil directly. This seems like a testable claim. Is there research about this subject that could confirm or debunk this claim?

Only napkin math. The typical sources of climate change denial don't see biomass as a threat (Because it is tiny, growing slowly, and augments fossil fuels, not replaces them), so they don't fund any research to attack it.

The proponents of it probably know that its numbers don't look great, so they don't push for research that thoroughly audits it.

It's also difficult to thoroughly audit the carbon costs of a complex supply chain that has to move tens and hundreds of millions tonnes of lumber - when the costs greatly vary based on how the lumber was sourced.

Re: With oil cheap, Arab states cannot balance their books

#22

Post by supernova87a » Tue, Jul 21, 2020, 4:54 PM UTC

nickfromseattle wrote: post #18

supernova87a wrote: post #7

I mean, this happened just a few years ago back in 2015, right? And 2008, and 2001, and 1998... These petro states suffer from the curse of natural resources combined with leadership that is too busy feasting off of the intermittent boom cycle to prepare their people constructively for the bust that comes later. So you have entire countries that are basically dependent on the oil handout, and in bad times, have littl…

>Some of the leaders do know that they can't live on oil forever, so you see some sovereign wealth funds investing in things that their people can learn and use to build their society more resiliently Do the Saudi's have the experience and culture to make this work? $90B invested in Softbank Vision Fund. [0] [0] https://www.businessinsider.com/saudi-arabia-45-billion-with...

Is that investment just finding a place to park money? Or does it do something good for the every day Saudi citizen? I don't follow the issue closely enough to know.

Re: With oil cheap, Arab states cannot balance their books

#23

Post by cs02rm0 » Tue, Jul 21, 2020, 4:55 PM UTC

opportune wrote: post #4

It’s hard to feel bad for them but there are a lot of outcomes here which result in a lot of people dying. Pretty sure half the reason SA and friends promote violent, reactionary interpretations of Islam is to serve as a dead man’s switch in case of regime change.

Pretty sure half the reason SA and friends promote violent, reactionary interpretations of Islam...

Is that a common abbreviation for Saudi? We used to use KSA when I lived there, but I don't trust South Africans not to be violent either. ;)

Re: With oil cheap, Arab states cannot balance their books

#24

Post by Pokepokalypse » Tue, Jul 21, 2020, 4:55 PM UTC

then. . . why did the Arab states (Saudi Arabia) join with Russia to overproduce and sandbag prices?

Re: With oil cheap, Arab states cannot balance their books

#25

Post by _michaelll » Tue, Jul 21, 2020, 4:56 PM UTC

762236 wrote: post #19

gerbal wrote: post #15

Earlier quoted context omitted.

> In many ways, it's even worse for the environment than just burning the oil directly. This seems like a testable claim. Is there research about this subject that could confirm or debunk this claim?

It can be tested in the other direction too: is there research that can confirm or debunk the opposite claim?

to confirm one is to debunk the other of course.

Re: With oil cheap, Arab states cannot balance their books

#26

Post by pydry » Tue, Jul 21, 2020, 4:56 PM UTC

supernova87a wrote: post #7

I mean, this happened just a few years ago back in 2015, right? And 2008, and 2001, and 1998... These petro states suffer from the curse of natural resources combined with leadership that is too busy feasting off of the intermittent boom cycle to prepare their people constructively for the bust that comes later. So you have entire countries that are basically dependent on the oil handout, and in bad times, have littl…

It's not strictly a "wrong leaders" problem. It's much more systemic than that. Elect a good leader and the oil will provide the impetus to tear that leader down.

Industry also won't form because of Dutch disease. Who wants to build a factory in Saudi Arabia even if it weren't unstable? Everything just costs too much because of the oil - land, materials, labor.

Sovereign wealth funds also don't really solve the problem because 1) they attract corruption like flies on shit and 2) they're vulnerable to confiscation from foreign governments if they decide they don't like your face (e.g. Venezuelan gold in London).

I suspect it could be that there is no simple solution to this. Potentially you are just fucked if you're a poor unstable country with oil and theres nothing you can really do about it. No leader will save you and no policy will help.

Re: With oil cheap, Arab states cannot balance their books

#27

Post by Alex3917 » Tue, Jul 21, 2020, 4:56 PM UTC

awillen wrote: post #20

supernova87a wrote: post #7

I mean, this happened just a few years ago back in 2015, right? And 2008, and 2001, and 1998... These petro states suffer from the curse of natural resources combined with leadership that is too busy feasting off of the intermittent boom cycle to prepare their people constructively for the bust that comes later. So you have entire countries that are basically dependent on the oil handout, and in bad times, have littl…

It feels like this time is different because of the ongoing lack of demand. International flights from the US are looking to basically be nonexistent until there's a vaccine. After that, it's very plausible the business travel economy won't ever recover fully. I agree that some of the more foresighted countries are making some of the right moves (though Saudi Arabia is probably kicking itself for not moving forward w…

> International flights from the US are looking to basically be nonexistent until there's a vaccine.

But there's likely going to be a vaccine in less than a year. It will take several years to know to what extent it's really safe or effective, but people who travel a lot for business can get it right away if they want.

Re: With oil cheap, Arab states cannot balance their books

#28

Post by ogre_codes » Tue, Jul 21, 2020, 4:56 PM UTC

supernova87a wrote: post #7

I mean, this happened just a few years ago back in 2015, right? And 2008, and 2001, and 1998... These petro states suffer from the curse of natural resources combined with leadership that is too busy feasting off of the intermittent boom cycle to prepare their people constructively for the bust that comes later. So you have entire countries that are basically dependent on the oil handout, and in bad times, have littl…

> I mean, this happened just a few years ago back in 2015, right? And 2008, and 2001, and 1998

The point here is that sub $40 oil is becoming the new norm. While these countries can weather a 2-3 year drop in oil prices, those short term drops are more and more frequent and the bottom keeps getting lower.

Between electrification of transportation and reduced travel which may last for another 6 months (or much longer, it's not really clear), demand is down. On top of that, any time oil stays over $50/ barrel for a prolonged period of time, shale oil and oil sands production increases putting downward pressure on prices.

Any way you look at it, there is no good news for oil-dependent states.

Re: With oil cheap, Arab states cannot balance their books

#29

Post by eloff » Tue, Jul 21, 2020, 4:57 PM UTC

awillen wrote: post #20

supernova87a wrote: post #7

I mean, this happened just a few years ago back in 2015, right? And 2008, and 2001, and 1998... These petro states suffer from the curse of natural resources combined with leadership that is too busy feasting off of the intermittent boom cycle to prepare their people constructively for the bust that comes later. So you have entire countries that are basically dependent on the oil handout, and in bad times, have littl…

It feels like this time is different because of the ongoing lack of demand. International flights from the US are looking to basically be nonexistent until there's a vaccine. After that, it's very plausible the business travel economy won't ever recover fully. I agree that some of the more foresighted countries are making some of the right moves (though Saudi Arabia is probably kicking itself for not moving forward w…

Flights account for very small single digit demand for oil. The main driver of the low demand is lower economic activity in general.

Re: With oil cheap, Arab states cannot balance their books

#30

Post by 3pt14159 » Tue, Jul 21, 2020, 4:57 PM UTC

supernova87a wrote: post #7

I mean, this happened just a few years ago back in 2015, right? And 2008, and 2001, and 1998... These petro states suffer from the curse of natural resources combined with leadership that is too busy feasting off of the intermittent boom cycle to prepare their people constructively for the bust that comes later. So you have entire countries that are basically dependent on the oil handout, and in bad times, have littl…

In the long run the cost of energy approaches 0 and ultimately heat dissipation and space (and hence, speed) will be more relevant. But short-termism and individual greed have reigned supreme in most energy rich companies. At least Canada has a diverse economy to take up all the petro-refugees, even if we didn't build a serious wealth fund out of our oil as the Norwegians did.