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Saudi Arabia sees End of Oil Age coming and opens valves on the carbon bubble.

Discussion in 'Energy, Environment, and Policy' started by Benz, Jan 28, 2015.

  1. Benz

    Benz Active Member

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  2. Raffy.Roma

    Raffy.Roma Active Member

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    IMO an intervention at Global Level is needed. Saudi Arabia should be forbidden to sell oil at very cheap price. Whatever the political reason for such low oil prices is fossil fuels have got to stay underground if we want to save the Earth.
     
  3. MikeC

    MikeC Active Member

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    Great article. Sounds like oil is just going to settle at market value now that Saudi Arabia is no longer colluding to manipulate prices. It's too bad that this will lead to increased oil consumption, but at least my take-home message from the article was that Saudi Arabia probably agrees with Elon that all transportation except rockets will go electric, and that oil will become irrelevant before it is all out of the ground.
     
  4. mkjayakumar

    mkjayakumar Active Member

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    That author is just speculating and postulating one theory on why Saudis have not decreased production - based on a comment made by a Saudi minister 15 years ago.

    Honestly the theory proposed in that article is giving too much credit to the Saudis on their ability to see the end of oil era. There is nothing in the horizon that will displace oil as the main source of energy
     
  5. BerTX

    BerTX Member

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    The price has been reduced to make fracking/shale oil economically unfeasible. As soon as all the sites in the US are shut down, plugged and the employees scattered to the winds and the equipment rusted and unusable, the price will go back up.
     
  6. RDoc

    RDoc S85D

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    What BerTX said. Another likely side effect (not wholly unintended) will be to greatly curtail alternative energy and conservation efforts as well, SUV sales are up already.
     
  7. CHG-ON

    CHG-ON Still in love after all these miles

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    Greed, greed, greed. Plain and simple. It will kill off the entire planet eventually. At least I'll be dead by then...
     
  8. the dude

    the dude Member

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    there is a flaw in the logic to the article

    if the saudis really thought that the end was nigh for oil, then they would be doing their best to extract the maximum amount of cash not the maximum amount of oil

    a 10% cut in oil production would push up the price and the saudis would have more cash, which is what they would want if they really believed that oil was finished

    I think they want to hurt Russia/Iran and try to kill shale oil/fracking
     
  9. nwdiver

    nwdiver Active Member

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    I believe the point of the article was that they can either sell it for ~$40/barrel or it stays in the ground since there won't be a market for it once the adults are in charge and people stop destroying the future...
     
  10. the dude

    the dude Member

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    but why do they care how much stays in the ground

    they would only really car about maximum revenue
     
  11. nwdiver

    nwdiver Active Member

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    #11 nwdiver, Jan 29, 2015
    Last edited: Jan 29, 2015
    Sell 1T bbl @ $40/bbl for $40T

    OR

    Sell 100B bbl @ $100/bbl for $1T

    This is basically a game of chicken... the Saudis don't want to reduce their production regardless of how cheap oil gets; They want OTHERS to cut back... they are likely to get their wish.
     
  12. rolosrevenge

    rolosrevenge Dr. EVS

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    Not so, if I can save a lot on gas, I can buy an EV sooner.

    - - - Updated - - -

    The planet will die one day either way, the big question is if our society advances to the point where we can escape its inevitable doom.
     
  13. Robert.Boston

    Robert.Boston Model S VIN P01536

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    As my daughter, the geophysicist, reminds me, the planet will do just fine; it's just this bit of biological scum on the surface that might have some problems.
     
  14. TheTalkingMule

    TheTalkingMule Active Member

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    I think it was George Carlin who used to postulate that Mother Nature really just wanted a ton of plastic bags everywhere and creating human consciousness was just the easiest way to get it done.

    I'm as concerned about the Earth as the next fellow, but people really need to keep things in perspective. What we're really talking about here is the potential end of human civilization, not the "death" of the planet. The most likely scenario is sea level rises too quickly and there's a tipping point to something like the Dark Ages. 8 billion dwindles down to a few hundred million, and then we start over. In the interim, all that CO2 will have sufficient time to absorb into the oceans or dissipate or stabilize or whatever.

    We are just a blip. Hopefully Elon can get us off the planet before it all goes to hell and Kevin Costner grows gills.
     
  15. rolosrevenge

    rolosrevenge Dr. EVS

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    Not really, eventually when the sun goes red giant, the Earth will either be swallowed or at least have it's crust and mantle stripped away leaving only a core which will orbit a pulsar after the sun dies. That will eventually be torn apart by tidal forces as the orbit decays. So the Earth is quite literally, use it or lose it.
     
  16. nwdiver

    nwdiver Active Member

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    I've never really understood that line of thinking... 'it's going to be destroyed anyway... so why not sooner rather than later?' Wonder if that's ever been used in a murder trial... 'It's not like he was going to live forever, I just accelerated the inevitable'

    Yes, extinctions happen; Yes, Earth will be uninhabitable at some point... how about we NOT accelerate the process... how about we keep the carbon in the ground...
     
  17. Raffy.Roma

    Raffy.Roma Active Member

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    #17 Raffy.Roma, Jan 30, 2015
    Last edited: Jan 30, 2015
    Hi guys, the Sun is going to blow up in 5 millions of millions years!

    Isn't it too much soon to discuss about such an event?
     
  18. adiggs

    adiggs Active Member

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    If we accept the premise that the Saudis have made the decision that they're going to pump their oil at full speed whatever that does to the price of oil, then another way to look at cheap oil is this is EXACTLY what we need to keep a bunch of oil in the ground. Or put another way, if I want to see the end of oil, I'd rather see low prices than high prices, as the amount of recoverable and burnable oil goes up with the price of a barrel of oil. If oil were $500/barrel, there's a whole lot more of it down there that we'd be bringing up.

    Instead of forbidding Saudi Arabia from selling oil at low prices, I'm hoping they bring the price down to $20/barrel.
     
  19. Benz

    Benz Active Member

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    OK guys, let's get back on topic.

    First of all we should note that Saudi Arabia needs to have a source of income, and not only now but in the future as well. So, how will Saudi Arabia secure their future source of income? It's clear that they cannot depend on oil forever. At some day the party will be over. Everybody knows that. How will they prepare for a future shift from oil to another source of income? I am sure that they already have a plan for that shift.

    I think that they want to extend the period of oil (the party) for as long as possible. That said, they would like the price of oil to be at around $100. Currently the market conditions have changed and the price of oil is now below $50. That price reduction has done a lot to their income from oil-revenues. What price level would they want/like to maintain for the near future? What will they do (now and in the near future)? What will their strategy look like?

    Of course they would like to see the demand for oil to grow higher in the near future, but that is not very likely to happen. Other sources of energy are gaining traction all over the world. So, the demand side of this story is not in their favour. What can be done on the supply side? Hurt other suppliers of oil by maintaining a price of oil below $50?
     
  20. CHGolferJim

    CHGolferJim Member

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    While living in Cairo and looking after the Saudi and nearby markets for my company 1994-1996, I recall reading articles on Saudi from old World Book encyclopedias of '60s vintage (my childhood).........if I remember correctly, the economy was something like 60% fishing and agriculture prior to the 1973 oil shock. They have only a few generations of sophisticated, educated technocrats and a small number of them. I'm not sure they've made much progress in diversifying the economy beyond oil, so their objective must be to maximize profits over the long-term within the context of their Bedouin decision-making processes and royal skimming.
     

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