Aleqtisadia, Saudi Arabia
Shale Oil Won’t Do
By Dr. Amin Sa'ati
Shale oil production is seeing notable progress in the U.S., which is a good thing. But we do not agree that it will replace oil from the Middle East.
Translated By Umar Seekdaur
6 January 2013
Edited by Rachel Smith
Saudi Arabia - Aleqtisadia - Original Article (Arabic)
Those who follow reports about the international oil market will notice that the West is running a media campaign claiming that it can dispense with Middle Eastern oil and replace it with shale oil and renewable energy. The Middle Eastern oil market is in a state of alarm these days, due to these reports warning that the demand for oil will decrease in 2013 and the world will dispense with oil from the Middle East in the near future.
This is the rumor that the Western media is spreading these days. It emphasizes that the oil of the Middle East will become unprofitable and that world demand will decrease considerably.
It is doubtful that shale oil or any kind of renewable energy could take the place of fossil oil. These furious media campaigns are similar to campaigns against the oil of the Middle East in the '80s that brought the price of oil down to $12 a barrel.
At that time, the Western media was temporarily successful in applying pressure to the oil market, which led to prices falling to their lowest levels. When the prices went down, the U.S. rushed to enter into long-term oil contracts at very low prices. It did not take long before the demand for oil went back to its usual high levels. The oil-producing countries realized then that the Western media was conspiring against the Middle East.
Rereading past experiences, we find that the U.S. starts its political or military projects with a threat to dispense with the oil of the Middle East. For example, when the U.S. decided to invade Afghanistan and Iraq in 2001, President George W. Bush hinted that the U.S. would eliminate its dependency on the oil of the Middle East and replace it with shale oil. Note that the main objective behind the American invasion of Iraq was the oil wells, not weapons of mass destruction!
That is why 10 years later the U.S. still needs the oil of the Middle East. In fact, it remains its biggest importer.
Shale oil production is seeing notable progress in the U.S., which is a good thing. But we do not agree that it will replace oil from the Middle East, and neither do facts on the ground.
Human civilization cannot dispense with Middle Eastern oil for numerous objective and logistical reasons, such as its abundance, high quality, variety, accessibility and huge industrial potential. While some oil wells have reached old age, others are still in their prime youth.
So we must not be scared by the mention of shale oil, because what really scares us is depletion. World consumption of oil is very high and heralds the possibility that it will dry up in the mid-21st century.
I repeat, shale oil does not frighten us. What does is extraction in huge quantities. As for shale oil, it will serve to compensate for the shortage in the supply of fossil oil.
Those who follow Saudi Arabia's policy regarding renewable energy will find that it is moving toward diversification and the search for new sources of energy because it fears that the current levels of consumption will lead to the premature depletion of some oil wells. For this reason, King Abdullah issued a decree to construct the King Abdullah City for Atomic and Renewable Energy, which he entrusted with searching for alternative energy sources. Moreover, Saudi Arabia has taken steps toward striking deals to construct nuclear reactors to supply energy to water and electricity projects. This means that the increase in shale oil production in the U.S. or elsewhere does not worry Saudi Arabia. On the contrary, it reassures it that human civilization will not collapse if oil production decreases or is stopped.
Our advice to the West is to increase their investments in alternative sources of energy and not in shale oil only. In fact, we advise them to invest heavily in all alternative sources of energy as consumption of oil has gone beyond reasonable levels. Many oil wells are nearing depletion and the world is in urgent need of various alternatives, not just one alternative.
There are many projects aimed at finding alternative energy and Saudi Arabia welcomes them. But at the same time, it is confident that for the time being fossil oil will remain the best bet, and will remain so until it dries up.
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