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It's been fascinating to watch Saudi influence wane over the last few years as this sinks in as the new reality. We live in a completely different power structu
by aphextron 8y ago
It's been fascinating to watch Saudi influence wane over the last few years as this sinks in as the new reality. We live in a completely different power structure now from 20 years ago. They're certainly still obscenely rich, but the power they had over geopolitics via OPEC is effectively gone at this point due to tar sands, renewables, and natural gas.
- enraged_camel 8y ago>> They're certainly still obscenely rich, but the power they had over geopolitics via OPEC is effectively gone at this point No, not really. They still have the ability to flood the market and cause prices to tank, which would wreak havoc on the US fracking industry.
- deagle50 8y agoI agree with what you said, they certainly can do that and you could argue the last crude crash was motivated by the US boom. The other argument is that Saudi Arabia's main objective is capturing as much profit as possible on all of their reserves before demand falls off a cliff vs strong-arming competition. They don't want to be stuck with huge deposits nobody wants in 30 years. It's their only export and they will stimulate demand as needed to sell every last drop. In this case, undercutting others would be a side benefit.
- singularity2001 8y ago> stuck with huge deposits nobody wants in 30 years. isn't them running out of reserves a much bigger risk for them than them running out of customers?
- deagle50 8y agoWell that's the trillion dollar question. Renewable energy adoption and carbon regulation are accelerating. I'm struggling to see a scenario where we run out of reserves in this century. I wouldn't put it past a country almost completely dependent on oil to keep stimulating demand.
- aphextron 8y ago>No, not really. They still have the ability to flood the market and cause prices to tank, which would wreak havoc on the US fracking industry. ...And tank their own profits? Cheap oil is good for literally everyone but the Saudis, that's the entire reason they've cut supplies since the glut of 2014-15. US fracking is already barely at a fraction of capacity right now with how low prices are. It's not an essential industry for us, and our economy is doing fine without it. At this point the US can essentially produce unlimited oil at ~$50/barrel (break even for fracking with current tech [0]) whenever we want. [0] https://www.reuters.com/article/us-usa-shale-kemp/u-s-shale-breakeven-price-revealed-around-50-kemp-idUSKBN1AP25M https://www.reuters.com/article/us-usa-shale-kemp/u-s-shale-...
- seibelj 8y agoI always bet on entrepreneurs and free markets over kingdoms and dictatorships. The Sultan got things set up a certain away and assumed nothing would change, while the free West just responds and innovates no matter circumstances.
- icebraining 8y agoThey didn't assume that; they have been investing in alternative sources of income for a long time, including in renewables and EVs.
- brianpgordon 8y agoI don't know about all of that. We got lucky to have such rich natural resources within our borders. All of the innovation and entrepreneurship in the world wouldn't have helped much if a bunch of plants and dinosaurs didn't happen to die and get buried in a geologically fortuitous way.
- enraged_camel 8y ago>>...And tank their own profits? Cheap oil is good for literally everyone but the Saudis, that's the entire reason they've cut supplies since the glut of 2014-15. Like you yourself said, Saudis are obscenely rich. They can tolerate losses in profits. In contrast, fracking companies in the US can't, at least not without massive government subsidies.
- abawany 8y agoI think you are right. Their per barrel production costs were < $10 in 2016 and seem to be the lowest of all the producers [1]. When the price per barrel over the last couple of years was under $30, the US fracking industry lost quite a few jobs as I recall. 1. http://graphics.wsj.com/oil-barrel-breakdown/ http://graphics.wsj.com/oil-barrel-breakdown/
- tonyedgecombe 8y agoI wonder what the next 20 years will bring, especially with the shift to electric vehicles.
- derekp7 8y agoMost people I talk with in my peer group wouldn't even think of getting an all-electric car (except maybe as a secondary vehicle), due to range anxiety. However, what I think will happen over the next 20 years (with battery improvement, etc) is more and more hybrids and plugin hybrids. For example, see Ford's plans starting in 2020. But the plugin hybrids won't be sold as "fuel efficient", but sold as "more powerful". However once people start doing most of their driving in all-electric mode, that will cause many gas stations to go out of business (since they run on razor thin margins). That will then be the push to make the leap to all electric in the following generation. In other words, I fully expect plug-in hybrids to be the bridge to all electric.
- chrisco255 8y agoWhy would gas pumps not be gradually replaced with charging points?
- greglindahl 8y agoMost people are going to charge at home (garage, parking lot, street charging point) or at work (garage, parking lot, street charging point.) That's not where gas stations are.
- dragonwriter 8y agoBecause if you are driving a PHV all-electric, you are probably charging at home, gas is a long-term range extender. Sure, as all-electric displace PHVs, that rane extender role shifts to charging points, but the big drop in demand for out-of-network fueling/charging comes from basic commuting being met by in-home charging.
- gwbas1c 8y agoBecause people will charge at their destinations or at home. Think of it this way: You go on a long trip and need to stop for gas somewhere along the trip. Instead, you just plug in at your destination. That saves you a stop.
- colechristensen 8y agoEnabled entirely by tar sands and fracking tech. OPEC made oil really expensive incentivizing technology development and now US*Canada have put a cap on oil prices and could bankrupt any nation relying on oil for the majority of their GDP. History books might cite oil technology, electric cars, Trumpism, the failure of European unity, and the coming recession to be the collection of triggers for the most "interesting" times we've seen since WWII. The legitimacy and power of the American government is at a low point, if we bankrupt our adversaries and fall into a recession ourselves, who knows what could happen.
- pjc50 8y agoThis doesn't seem to have stopped them having a war in Yemen with Western assistance.
- kevin_thibedeau 8y agoMICs are only money makers if there is demand for their services.
- 2trill2spill 8y ago> They're certainly still obscenely rich, but the power they had over geopolitics via OPEC is effectively gone at this point due to tar sands, renewables, and natural gas. You missed the other significant factor in reducing OPEC political power, horizontal drilling, IE fracking. Almost all the new oil and natural gas in the US is coming from horizontally drilled wells.
- reaperducer 8y agoAlmost all the new oil and natural gas in the US is coming from horizontally drilled wells. Utah tar sands are coming online soon. Then... who knows what comes after that.
- cgdcraig 8y agoFun fact, Canada had the 3rd largest proven reserves of oil in the world, mostly in the oil/tar sands.
- kd5bjo 8y agoHorizontal drilling and fracking are two distinct but related techniques: * "Horizontal drilling" refers to drilling a non-vertical (and often curved) borehole, to reach deposits that aren't directly beneath the wellhead. * Hydraulic Fracturing, "fracking," is the practice of injecting water into a well to crack the rock around the borehole, increasing its permeability. Each can be used independently, but it's the combination of the two that has increased US production.
- 2trill2spill 8y agoYea you are correct, but are there any US Oil and gas producers horizontally drilling wells but not hydraulic fracturing the well?
- kd5bjo 8y agoSure. It all depends on the geology of the particular oilfield the well is tapping, and how much money the well owner is willing to invest in increasing production. Similarly, there are vertical wells that have been fractured. I don’t have the knowledge to get any more detailed, unfortunately — This is all secondhand from some oil industry software engineers.
- GuiA 8y agoRashid bin Saeed Al Maktoum: "My grandfather rode a camel, my father rode a camel, I drive a Mercedes, my son drives a Land Rover, his son will drive a Land Rover, but his son will ride a camel" https://en.wikipedia.org/wiki/Rashid_bin_Saeed_Al_Maktoum#Development_of_Dubai https://en.wikipedia.org/wiki/Rashid_bin_Saeed_Al_Maktoum#De...
- awakeasleep 8y agoKeep in mind a decent camel starts at $55k and a thoroughbred goes for $10m to $30m
- saagarjha 8y agoIt’s much easier to get access to the materials for camel production, though.
- deleted 8y ago[deleted]
- GuiA 8y agoA cursory google search seems to indicate those are prices for racing camels. In that case, not too surprising - one observes similar gaps between race horses and “every day” horses.
- beaner 8y agoFor the clueless like me, is there a joke here?
- tomcam 8y agoOnly if you pay more than $7,500 for a 2 year-old dromedary bull.
- oh_sigh 8y agoI lived with some bedouins in Morocco near merzouga for a few months who had about a hundred camels. I really doubt they were sitting on millions of dollars of camels.
- BrandonMarc 8y agoIt hurts Russia, too.
- valarauca1 8y agoWe live in a completely different power structure now from 20 years ago. The US has always imported <10% of its oil/gas (if you don't count Canadian sources). There has never been a large scale dependence on foreign oil. Most of this was conservative propaganda from the Bush Administration to help justify the war in Iraq. That being said OPEC had some control over the price that oil was traded at, but never the volumes.
- wang_li 8y agoAccording to NPR in 2010 the US was importing 60% of the oil used. https://www.npr.org/2012/04/11/150444802/where-does-america-get-oil-you-may-be-surprised https://www.npr.org/2012/04/11/150444802/where-does-america-...
- jackfoxy 8y agoIt's not tar sands, it's fracing.
- 0x8BADF00D 8y agoIt turns out that having a theocratic ethnostate is a bad idea. Gee, who would’ve thought.
- man2525 8y agoThey don't need to influence all of us to affect all of us. U.S. taxes are funding Al-Nusra in Syria at Israel's (who hospitalizes them) and the Saudis' request in a larger war on Shiite rebels.
- nickbauman 8y agoThe US has _always_ been the first or second largest crude oil producer since the beginning. Not much has changed. We just have millions of oil wells, whereas Saudi has only a few hundred, many of which had naturally pressureized well heads (no pumping required). In fact the largest single oil well on the planet is in Saudi (it's called Ghawar https://en.wikipedia.org/wiki/Ghawar_Field https://en.wikipedia.org/wiki/Ghawar_Field, which is such a lovely name) and it's over 150 miles long!