Saudi letter concerning oil and gas has panicky tone

Toronto Sun ^ | Jan. 11/14 | Ezra Levant

[Clinging Bitterly]

True, with the U.S. taxes and the regulatory environment being what it is, plus the expense of the modern production methods which bring the shale bound oil to the surface, the cost of exploration and production calls for an $80-90 crude price right now. And if you compare it to the prices 40 years ago and account for inflation, that isn't so bad.

Though what we need more than anything right now is the go-ahead to build more infrastructure - pipelines for oil and gas, and more refineries. But we as a people are going to have to rise up and demand it.

There is no good reason we shouldn't have full energy independence and lower costs, right now.

[meatloaf]

It’s a double edged sword. We have too much natural gas for the current price. We need to issue the export permits to put LNG on the world market. With natural gas comes soil. With the EPA driving the closure of coal fired power plants, the only quick alternative is natural gas fired combustion turbines. It will be years before those start to drive prices up. Until then, we need to export LNG.

[lormand]

Works for me too

[IronJack]

I had hoped I would live to see the day when the feckless Bedouins of Saudi Arabia would be left sitting atop their sand castle while the world passed by oblivious to the "treasure" under the deserts. I think that day is approaching, and not a minute too soon.

The next dream is a full economic collapse of that treacherous regime and a return of its bandit leaders to their tents and camels and the windswept barrens God intended that wasteland to be.

[nascarnation]

They can sell plenty of their oil to China

True, but China may not be as nice a business partner. As a matter of fact, they might just forget to pay now and then...

[RoosterRedux]

That’s right. He told Rudy he thought American foreign policy caused 9/11 and Rudy told him to eff off.

[bert]

The Skyline of Dubai

Well, yes and no. The Arabs have made tremendous strides in using their oil and financial assets to develop their economies beyond only oil sales. For example in Saudi Arabis, early on, the Royal Saudi Commission of Jubail and Yanbu was established. It was pretty much run by the American Company of Saudia Arabian Bechtel. While the employees were largely American, they came from Bechtel organizations all over.

The area in Jubail Industrial zone grew from essentially 0 to around 250,000 in a period of roughly 25 years. The population is largely Saudi and is involved in running and servicing the mostly petrochemical plants there A similar situation exists in the west at Yanbu. I don't believe it is a large . While there is tremendous growth at Jubail, there is also growth in the economy further south in Al Khobar and Dammam. These cities have lots and lots of businesses great and small that support the Dhahran based Saudi Aramco and the industry at Jubail. The business of industrial support is huge. This business of wanting to be managers and not actually work has some basis in reality. There is however a desire to have things and lead a good life. The means are there if the work is done. There is change in attitude of those in the generations coming up. Then there is Dubai and Abu Dhabi. Both are truly world class business and financial centers. Any world company worth a damn must have at least offices and better yet, distribution there. Both are humming with the trade passing through the ports and warehouses and free trade zones and banks. All of the above is coveted by Iran. The Mullahs resent it all and want it for their own All this is beyond the comprehension of a common street organizer and political idealogue

[Cen-Tejas]

Great article, read it all, very scary that our # 1 foreign enemy, Saudi Arabia, has this much history and potential control of the President of the Unoted States. This article explains his bowing to these guys when he was over there. He owes them a lot. Indeed, after reading this article, I think Obama has tens of millions, if not hundreds of millions, in foreign bank accounts. You can’t explain that on a 400k salary. So “Treason” is out there, we just need some people in power and positions and with balls to go after the evidence so this cancer can be removed from our country.

When it does, a carburetor must be put upon the Alphabet media!

[Jeff Chandler]

the non oil 8% of the economy does not grow.

In other words, the Saudis never developed a non-oil industrial base; they ate their seed corn.

[Partisan Gunslinger]

Wait a minute. The liberals have told us we have exploited the Arabs for their oil for decades. This article makes it appear the Arabs have enjoyed selling their oil to us.

/s

[The Great RJ]

If we built the Keystone pipeline, develops ANWAR and oil shale in the US and continue with fracking we would be exporting more oil than Saudi Arabia and our economy would be booming. However it won’t happen as long as the Kenyan is in the White House.

[Squawk 8888]

To all- please ping me to Canadian topics.

Canada Ping!

[SunkenCiv]

> it’s probably worth asking Canadian environmental lobbyists if they receive any funding from OPEC to fight Canadian oil and gas.

Doh! Where do people think the many millions spent by the so-called environmental so-called movement (it’s astroturf) has come from over the past 35 years or so? Undermining industry (particularly nuclear power, because that industry is part of the collateral payoff from national defense spending and has a symbiotic relationship with it) began as a support for commie regimes overseas, but the tactics and part of the spectrum of issues was overwhelmingly taken over by OPEC.

The biggest threat to OPEC in the short term has been the lousy economy the US has endured during this Obama Recession; in the middle term fracking and other enhanced methods threaten to eliminate the US market to foreign producers; in the long term, those same methods are likely to be adopted by the big growth markets in India and China in pursuit of their own hydrocarbon sources.

Historically, the disaster of the 1973 War led to OPEC’s (partial) embargo (some didn’t participate, most smaller producers cheated to take advantage of the huge increase, and trans-shipping provided both a pipeline to the US and an alibi for cartel members); since then, the money has been much better, but total reliance on their only export (and largely, literally their only product) has led to outbreaks of war between cartel members in the Middle East whenever there’s either soft prices due to world recession or oversupply, or instability as was seen after the overthrow of the Shah.

Thanks Dartman.

[Organic Panic]

The Saudis better break out the check book and write even bigger checks to environmental hystetia groups. Global warming is melting the polar bears dontcha know.

[ken5050]

OPEC will soon stand for:

Our Petroleum Exports Collapse

[Cyber Liberty]

The Saudis needn’t worry. Their Islamic brother in the White Hut is doing all he can to prevent development of American oil, and stop the importation from Canada.

[Hot Tabasco]

I’m convince we have the resources to use oil and especially natural gas as an economic weapon to eliminate OPEC’s influence

There's absolutely no question about that! We've got unimaginable oil and gas resources that could and should be developed with govt. insistence, enough that we could probably put the Saudi's out of business......

[kjam22]

Lower prices is where this goes. The Saudie’s can make a profit at about $35 per barrel. You can’t find and produce shale oil for that price. No way.

[ROCKLOBSTER]

The Chinese could occupy the mid-east to protect their new ‘investment.’

Hey!

I like the sound of that.

[RayChuang88]

I think what has to really scare the Saudis is that if Iran does manage to end its enmity with the West, that could put the House of Saud in a huge pickle.

Here's why: a less belligerent to the West Iran could make it very viable for Kuwait, Qatar, Bahrain, United Arab Emirates and Oman stop kowtowing to Saudi Arabia and be on way more friendly terms with Iran, especially the exploitation of Iran and Iraq's way-underutilized oil and natural gas reserves. And it could actually hurt al-Qaeda, since the Islamic militants aren't so interested in the (effectively) Saudi-backed movement if the House of Saud suddenly loses a lot of influence in the Middle East. I'll almost bet that the Somali sea pirates are de facto privateers for the Saudis, and they may question their very activities if the House of Saud loses influence in the Middle East.