Petrified of Petroplex
By Keith Kohl
I have to tell you something: I love it when OPEC — and especially Saudi Arabia — is in full-blown panic mode. And that’s exactly what’s happening as you read this.
In fact, I’m surprised there hasn’t been a report that the spoiled Saudi prince Alwaleed bin Talal — the 26th richest man in the entire effing world — was scolded in public for his remarks to a Canadian rag a few weeks ago.
If you missed it, here’s what he said…
“The new shale oil discoveries are a threat to any oil-producing nation in the world,” he said in an interview with The Globe and Mail. “Definitely it is a worry and concern… It is a matter of survival.”
This follows an open letter he wrote last May to the Saudi oil minister begging him to realize the danger the U.S. oil boom poses to the Middle East and pleading with him to help diversify the Saudis’ oil export-dependent economy.
It’s unclear what options are available to them (if any). But we do know one thing: He’s right to be sweating in his keffiyeh.
After all, how would you feel about America’s current oil boom if you were part of a ruling family whose power rested on its ability to corner almost 20% of the world’s proven oil reserves?
Or maybe he’s actually fretting about his own country’s finances. He’s already admitted publicly that, thanks to the shale revolution, any country that gets 92% of its budget from oil exports is in for a grim day of reckoning.
Or he could be fixating on another number: seven million. That’s how many barrels of oil per day the U.S. is now producing, up two million since 2008.
Though if I were him, I’d be worrying about the scariest number of all…
That’s the year the United States is projected to surpass Saudi Arabia and Russia as the world’s largest oil producer, according to the IEA.
It must make their heads spin. Just five years ago, no one had ever heard of fracking. By 2010, the U.S. had already become the world’s largest producer of natural gas. And just four months ago, we began to produce more oil than we import for the first time in decades.
This comes just as OPEC itself reveals demand for its oil fell by a half million barrels per day last year. It expects a similar decline for 2014…
Make no mistake: Thanks to the shale oil revolution, OPEC is on the run.
A perfect storm of improved U.S. fuel efficiency, rising renewable energy capacity, and — most of all — fracking technology is bringing forth the day when the Middle East is just a pile of sand and we can get enough of that black goo without them — more cheaply and terror-free.
And it all begins with a 70-square-mile area in Western Texas…