
Oil-rich Saudis find new help in struggle to delay action on climate change - pmcpinto
http://www.washingtonpost.com/national/health-science/oil-rich-saudis-find-a-new-ally-in-struggle-to-delay-action-on-climate-change-cheap-gas/2015/01/26/4d277170-9cc7-11e4-bcfb-059ec7a93ddc_story.html
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1971genocide
I dont understand, this is prolly the most short-sighted move ever in the
history of mankind.

Don't the saudis realize that that climate change is terrible news for them ?
The climate is already unbearable in the middle east. If temperatures rise any
further its going to be a disaster for them.

Also the saudis seem to not understand basic economics. They are essentially
wasting their massive cash reserve to give western consumers a tax break. They
could have wasted it on improvnig the state of their society and making
individual saudi more productive but nope. Cannot wait for their country to
turn into mars.

The little environment they have that allows them to grow food would be in
danger.

Its so depressing.

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peteretep

        > that climate change is terrible news for them
    

Terrible news for the House of Saud? Doubtful.

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steven777400
It's not strange that cheaper oil increases miles driven and other transient
features, but so quickly impacting the sale of larger crossovers and other
gas-heavy vehicles? It seems likely (or at least plausible) that, within 1 to
3 years or less, gas prices could easily spike back up to where they were
before. Do people really think such low prices are the "new normal" or is
there other factors at play?

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delecti
Everybody is ignorant about something. Many are ignorant about the political
issues that factor into their gas prices. I would be very surprised if people
aren't expecting this to be the new normal.

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tn13
It is very hard to separate the noise from the information related to climate
change. Even the popular media houses are reporting everything in a very
biased fashion.

True that the Saudis have a personal interest in being climate change skeptic
but that does not make their arguments any less relevant.

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mikeash
It's only difficult to separate the noise from the information if you only get
your information from the news. If you go straight to the experts then the
picture becomes quite clear.

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datashovel
One factor that I don't quite understand is how the lower prices could
possibly sway investors to continue to invest heavily in oil industries. I can
imagine how it may slow the investment in alternative energy, but to convince
savvy investors that the future of energy is in oil seems impossible to me.

I read this whole situation as big oil finally realizing what they're up
against, and deciding that they just need do everything they can to squeeze
every last ounce of cash out of their oil. After the tides finally turn, the
oil producing countries will likely have a lot of issues to deal with.
Possibly for decades to come.

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rhino369
I've wondered if this is Saudi Arabia acknowledging that oil will be a dying
market and trying to cash out now.

Saudi's cornered the oil market, but their percentage of the market slips
every time someone starts pumping more oil.

If the Saudi's think that falling demand and increasing supply in the US will
occur, they may just resort to taking a large portion of the market instead of
trying to keep the price high.

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saryant
All of OPEC has been falling for the marketshare scramble for much of the last
30 years, this is a key reason why their ability to maintain pricing power has
diminished.

Whenever the price of oil falls below OPEC's established floor, Saudi Arabia
(in theory) will be the OPEC member to cut their output. Historically Saudi
Arabia has served as the world's swing producer. Each OPEC member had a
specific quota they were allowed to produce with Saudi Arabia increasing and
decreasing supply to maintain their target price.

The problem is, as OPEC as a whole has lost marketshare to new reserves
elsewhere in the world, individual OPEC members began to ignore their quota
and go for marketshare, producing as much as they could. This was largely
driven by local politics in the individual nations, since increased
marketshare would deliver a short-term cash infusion.

The Saudis are now tired of this. With US supplies now on the market, they've
abandoned their role as the world's swing producer, leaving that task to
America. America's producers are more market-sensitive, since they don't have
sovereign reserves to fall back on, and more readily cut supply as projects
become uneconomical in the face of falling prices. The great American oil boom
of the past ten years has dramatically reshaped the power dynamics of the oil
industry.

So the Saudis have joined the rest of OPEC in the quest for marketshare,
allowing the price of crude to enter a free-fall. They can outlast most of the
rest of OPEC with their currency reserves so they're using this moment to slap
the rest of them in the face for decades of defying OPEC policy.

Oil isn't a dying market, _conventional_ oil is a dying market.

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guscost
I'll put up $100 that oil and gas prices will continue to fall and then stay
low (let's say at most around $50 a barrel) for years and years, no matter
what the Saudis do. It's very simple, there is a very large supply and so the
resource will be cheap as long as that is the case.

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transfire
It will only buy them a little time, at best. Renewable technology continues
to improve. Some estimates put it at an 8% average improvement rate per year.
If this is correct, then in 10 years the cost effectiveness will have doubled.
And that's about all it will take to push out oil and gas. Renewables are
already close to cost parity with oil and gas today. So even $20 per barrel
oil will not be able to compete by 2030. But, there are other uses for oil, so
don't expect it to ever go away completely.

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rhino369
That is a bit rosey. Wind is close, but solar is far away. Neither have cheap
enough to be used as baseline power.

But we don't use oil for electricity anyway. It's mostly transportation. The
question is not renewable v. fossil, but why type of automobile power plant we
will be using.

Electric cars will take a while but electric trucks are way far off.

We can stave off global warming by fracking the everloving fuck out out of
America and using natural gas for electricity and for automobiles.

~~~
delecti
> We can stave off global warming by fracking the everloving fuck out out of
> America and using natural gas for electricity and for automobiles.

I'd rather live in a warming world than one poisoned by all of the crap that
goes into fracking.

