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Saudi needs to do one of two things before the oil runs out: 1) Diversify their economy 2) Build up enough sovereign wealth to maintain their citizens standar

Saudi needs to do one of two things before the oil runs out: 1) Diversify their economy 2) Build up enough sovereign wealth to maintain their citizens standard of living after the oil has run out. The first is very hard, because huge percentages of their population are completely disengaged from the economy. It's estimated that 30-40% of working age adults neither have a job, nor are looking for one. An unusually high percentage of those who have jobs work for the government, and somewhere close to 90% of non-oil jobs are held by foreigners. There is immense social and economic pressure against citizens of KSA getting private sector jobs. The biggest "employer" in the country is the yearly hajj pilgrimage, which isn't a lot. The latter is incredibly hard because of the former. That 30-40% of the population that don't have jobs need to be fed, or they'll eventually revolt. And all of those government jobs cost a huge amount of money. And the fact that the citizens of KSA neither want jobs (apparently) and aren't properly trained for a lot of those jobs makes reducing the social services bill very, very hard. If they can outrun the de-carbonization of the world, KSA will do okay. Maybe not as good as it was during the peak (if you were one of the few getting the benefits), but not terrible. If they don't outrun de-carbonization .... well, then I would recommend not being there when whatever happens, happens.

pmiller2 6y ago
Oil is not running out in Saudi Arabia anytime soon. They have reserves underneath their desert land equal to over 200 years' worth of current consumption. [0] What they need to do is stop pumping it, and soon, otherwise climate change will cook us all. --- [0]: https://www.worldometers.info/oil/saudi-arabia-oil/ https://www.worldometers.info/oil/saudi-arabia-oil/
- freewilly1040 6y ago
  At this point it seems demand for oil will run out before supply
  - ako 6y ago
    We'll still need oil, not for energy, but as a raw material for production of plastics and many other products.
    - hollerith 6y ago
      And plastic does not turn into CO2.
      - pmiller2 6y ago
        Plastic has its own issues, as does the production of plastic.
    - stale2002 6y ago
      > We'll still need oil Sure, but not nearly in as large of quantities. If the value of saudi arabian oil plummets to 1/4th its value, then they are still screwed, even though "oil is still used as raw materials" and it has non-zero value. Owning something that is almost worthless isn't really much better than owning something that is literally worthless.
    - ashtonkem 6y ago
      Perhaps, but that won’t save KSA. First, most plastics are now made from natural gas, something KSA doesn’t produce a huge amount of. They’ve got decent reserves, but their production lags. Qatar produced 70% more LNG last year than KSA. LNG is also kind of a pain to transit by sea, which advantages countries that can produce natural gas closer to the factories (e.g. The United States and Russia, among others). And second, plastic production consumes a relatively small part of the world petroleum production. Here in the US it’s estimated that about 2.7% of our yearly petroleum consumption. World wide only 4% of world petroleum went into plastics (2012 figure). So even if plastics continue to be made of oil, plastic consumption remains constant, and there is no major shift in who produces the feedstocks for plastic (all wildly optimistic assumptions), then KSA can expect to keep about 2.7-4% of their current oil export budgets. That is catastrophic for a country like KSA, who needs all the oil money they can get.
  - pmiller2 6y ago
    I hope so, but then I look around at all the less developed countries out there and all I see is a massive demand for oil. :/
    - yazaddaruvala 6y ago
      As per the article, renewables will be significantly cheaper than oil. Why would a poor country not purchase the cheaper option?
      - pmiller2 6y ago
        You tell me why poor countries wouldn’t invest in solar, wind, hydro, or geothermal. (Hint: you have to build the infrastructure first, and not all of these are even practical everywhere.) Hydrogen isn’t all that practical as a fuel, and biomass just puts CO2 back into the atmosphere. Can you think of a renewable source of energy that’s both attractive to poor and developing countries, and also practical? Oil is easy. You put it in a tank, then pump it through an atomizer, and set it on fire. You can transport it easily, it works anywhere, and you can run a car on it. I know, electric cars are a thing, but not in the places I’m talking about here. Electrical transmission across long distances, and, especially between different countries with different power grids is a nightmare. What am I missing here?
        relaxing 6y ago
        You’re massively underestimating the infrastructure needed to take oil and put it in the consumers’ hands. Biomass puts CO2 back in the atmosphere, but at least it’s not increasing the total CO2 in the biosphere.
        pmiller2 6y ago
        Most of that infrastructure is in the extraction and transport to the destination country. Once the oil is there, all you really need is a storage system, and a way for consumers to buy it. There's no need to pump it around, at all. You can transport it by truck. Growing up, my family had a fuel oil heater. We'd have the tank filled periodically, and that was all there was. Likewise, gas pumps are just storage tanks hooked up to pumps. There's practically nothing to it; it's all basically 19th century technology that's easy to build, and doesn't require any sophisticated engineering.
- spurgu 6y ago
  It's well-known that there's a lot of oil left. The problem is that it's becoming increasingly less accessible and thus more expensive to extract.
ampdepolymerase 6y ago
Why isn't anyone studying the Arabic states as UBI models? Incompatibility with western democracy? They are the closest to a large scale UBI system right now. Much bigger than those toy hundred people sort-of-UBI-but-not-really experiments.
- yourapostasy 6y ago
  > Why isn't anyone studying the Arabic states as UBI models? Perceived cultural differences, possibly leading to more interesting, uncomfortable parallels than many would like. On the ground in the kingdom, in the field, there is an enormous cultural bias towards status, and low-status jobs are shunned. This is made more complex because of a subtle, more recent cultural bias that emerged from having foreigners perform almost all the work for so long, and foreigners in Wahhabi faith as it is practically practiced (in theory it is different) are considered inferior in an unenlightened sense. A halo effect emerged around private jobs, and now any job at all that used to be performed by foreigners is considered low(er) status. This is changing rapidly and gaining steam in numbers at the margins with many younger generations. I've met some incredibly brilliant, young KSA native engineers. Many are working hard to reverse the rot the Resource Curse visited upon the kingdom. However, I wouldn't be so quick to dismiss that kingdom's experience as unique to it, saying that does not apply to America or many other developed nations. Considering the penchant for superficial solutions, get-rich-quick adulation, and de facto class stratifications in all developed nations, I'm not sanguine a UBI would elicit much better results than a Resource Curse. Norway is an exception that proves the rule, from what I've seen so far. And I wouldn't point fingers at just nations, either. Even here on HN, where startups with fast 10-1,000X liquidity events receive gallons of ink compared to the inkjet droplets miserly begrudged to to self-funding, slow organic growth companies, we engage in similar dynamics. Making someone or a nation fabulously wealthy and/or powerful doesn't change them, it only discloses their true character and moral fiber. The uncomfortable truth is a substantial portion of us, whether at the individual or nation-state level, when granted free reign with no one saying "No", are jerks. IMHO UBI is like pure communism or pure capitalism: they only sustainably and consistently work if the vast majority (I'd personally guess around 95%) are truly not jerks, and thus have the means to keep the levers of power away from those who are. BTW, I'm one of those jerks. Maybe not the biggest douche-canoe you've ever met, but I'm definitely a jerk, though I chip away at that.
jl6 6y ago
Wow, what do Saudis do all day?

pmiller2 6y ago

Oil is not running out in Saudi Arabia anytime soon. They have reserves underneath their desert land equal to over 200 years' worth of current consumption. [0] What they need to do is stop pumping it, and soon, otherwise climate change will cook us all. --- [0]: https://www.worldometers.info/oil/saudi-arabia-oil/ https://www.worldometers.info/oil/saudi-arabia-oil/

freewilly1040 6y ago
At this point it seems demand for oil will run out before supply
- ako 6y ago
  We'll still need oil, not for energy, but as a raw material for production of plastics and many other products.
  - hollerith 6y ago
    And plastic does not turn into CO2.
    - pmiller2 6y ago
      Plastic has its own issues, as does the production of plastic.
  - stale2002 6y ago
    > We'll still need oil Sure, but not nearly in as large of quantities. If the value of saudi arabian oil plummets to 1/4th its value, then they are still screwed, even though "oil is still used as raw materials" and it has non-zero value. Owning something that is almost worthless isn't really much better than owning something that is literally worthless.
  - ashtonkem 6y ago
    Perhaps, but that won’t save KSA. First, most plastics are now made from natural gas, something KSA doesn’t produce a huge amount of. They’ve got decent reserves, but their production lags. Qatar produced 70% more LNG last year than KSA. LNG is also kind of a pain to transit by sea, which advantages countries that can produce natural gas closer to the factories (e.g. The United States and Russia, among others). And second, plastic production consumes a relatively small part of the world petroleum production. Here in the US it’s estimated that about 2.7% of our yearly petroleum consumption. World wide only 4% of world petroleum went into plastics (2012 figure). So even if plastics continue to be made of oil, plastic consumption remains constant, and there is no major shift in who produces the feedstocks for plastic (all wildly optimistic assumptions), then KSA can expect to keep about 2.7-4% of their current oil export budgets. That is catastrophic for a country like KSA, who needs all the oil money they can get.
- pmiller2 6y ago
  I hope so, but then I look around at all the less developed countries out there and all I see is a massive demand for oil. :/
  - yazaddaruvala 6y ago
    As per the article, renewables will be significantly cheaper than oil. Why would a poor country not purchase the cheaper option?
    - pmiller2 6y ago
      You tell me why poor countries wouldn’t invest in solar, wind, hydro, or geothermal. (Hint: you have to build the infrastructure first, and not all of these are even practical everywhere.) Hydrogen isn’t all that practical as a fuel, and biomass just puts CO2 back into the atmosphere. Can you think of a renewable source of energy that’s both attractive to poor and developing countries, and also practical? Oil is easy. You put it in a tank, then pump it through an atomizer, and set it on fire. You can transport it easily, it works anywhere, and you can run a car on it. I know, electric cars are a thing, but not in the places I’m talking about here. Electrical transmission across long distances, and, especially between different countries with different power grids is a nightmare. What am I missing here?
      - relaxing 6y ago
        You’re massively underestimating the infrastructure needed to take oil and put it in the consumers’ hands. Biomass puts CO2 back in the atmosphere, but at least it’s not increasing the total CO2 in the biosphere.
        pmiller2 6y ago
        Most of that infrastructure is in the extraction and transport to the destination country. Once the oil is there, all you really need is a storage system, and a way for consumers to buy it. There's no need to pump it around, at all. You can transport it by truck. Growing up, my family had a fuel oil heater. We'd have the tank filled periodically, and that was all there was. Likewise, gas pumps are just storage tanks hooked up to pumps. There's practically nothing to it; it's all basically 19th century technology that's easy to build, and doesn't require any sophisticated engineering.
spurgu 6y ago
It's well-known that there's a lot of oil left. The problem is that it's becoming increasingly less accessible and thus more expensive to extract.

ampdepolymerase 6y ago

Why isn't anyone studying the Arabic states as UBI models? Incompatibility with western democracy? They are the closest to a large scale UBI system right now. Much bigger than those toy hundred people sort-of-UBI-but-not-really experiments.

yourapostasy 6y ago
> Why isn't anyone studying the Arabic states as UBI models? Perceived cultural differences, possibly leading to more interesting, uncomfortable parallels than many would like. On the ground in the kingdom, in the field, there is an enormous cultural bias towards status, and low-status jobs are shunned. This is made more complex because of a subtle, more recent cultural bias that emerged from having foreigners perform almost all the work for so long, and foreigners in Wahhabi faith as it is practically practiced (in theory it is different) are considered inferior in an unenlightened sense. A halo effect emerged around private jobs, and now any job at all that used to be performed by foreigners is considered low(er) status. This is changing rapidly and gaining steam in numbers at the margins with many younger generations. I've met some incredibly brilliant, young KSA native engineers. Many are working hard to reverse the rot the Resource Curse visited upon the kingdom. However, I wouldn't be so quick to dismiss that kingdom's experience as unique to it, saying that does not apply to America or many other developed nations. Considering the penchant for superficial solutions, get-rich-quick adulation, and de facto class stratifications in all developed nations, I'm not sanguine a UBI would elicit much better results than a Resource Curse. Norway is an exception that proves the rule, from what I've seen so far. And I wouldn't point fingers at just nations, either. Even here on HN, where startups with fast 10-1,000X liquidity events receive gallons of ink compared to the inkjet droplets miserly begrudged to to self-funding, slow organic growth companies, we engage in similar dynamics. Making someone or a nation fabulously wealthy and/or powerful doesn't change them, it only discloses their true character and moral fiber. The uncomfortable truth is a substantial portion of us, whether at the individual or nation-state level, when granted free reign with no one saying "No", are jerks. IMHO UBI is like pure communism or pure capitalism: they only sustainably and consistently work if the vast majority (I'd personally guess around 95%) are truly not jerks, and thus have the means to keep the levers of power away from those who are. BTW, I'm one of those jerks. Maybe not the biggest douche-canoe you've ever met, but I'm definitely a jerk, though I chip away at that.

jl6 6y ago

Wow, what do Saudis do all day?