2018 July 23

Answers to: Renewable Energy Transition

No unique link — we are saying that Arctic development is inevitable and that it is a question of US access to the oil resources. Renewables will never make it because if the price of oil gets to high the Saudis will flood the market with oil, preventing the transition Jad Mouawad, 6/15/2008, International Herald Tribune, “Saudis plan to increase oil output”, http://www.iht.com/bin/printfriendly.php?id=1372378 Saudi Arabia, the world’s biggest oil exporter, is planning to increase its output next month by about a half-million barrels a day, an increase of nearly 6 percent, according to analysts and oil traders briefed by Saudi officials. The increase could raise Saudi output to a production level of 10 million barrels a day, which, if sustained, would be the highest ever by the kingdom. The move was seen as a sign that the Saudis are becoming increasingly nervous about both the political and economic effects of high oil prices. In recent weeks, soaring fuel costs have incited demonstrations and protests from Italy to Indonesia. Saudi Arabia is now pumping 9.45 million barrels a day, which is an increase of about 300,000 barrels from last month. While they are reaping record profits, the Saudis are concerned that the record prices reached this month might eventually dampen global economic growth and lead to lower oil demand, as is already happening in the United States and other developed countries. The current prices are also making alternative fuels more viable, threatening the long-term prospects of the oil-based economy. Saudi Arabia will just flood the market with oil, blocking the transition Rahemtulla ’13 (Karim Rahemtulla, Chief Resource Analyst at Oil and Energy Daily, Author of the bestselling book, “Where In the World Should I Invest?”. “Will Saudi Arabia Go Nuclear With An Oil Supply Shock?” 30 July 2013. http://www.oilandenergydaily.com/2013/07/30/saudi-arabia-oil-supply/ LP) Saudi Arabia is home to the world’s most prolific, consistent daily production of crude oil and the second-largest reserves in the world. The kingdom currently produces 12.5 million barrels per day. It has the capacity to produce another 2.5 million barrels per day. There just isn’t enough demand at current prices. Through its influence over OPEC, it can pretty much set the price for more than one third of the world’s daily oil usage of around 100 million barrels. So even if it doesn’t sell as much oil to the United States – most of our imports come from Canada, Venezuela and Mexico – Saudi Arabia is still a major factor in the price of the oil that we consume. More importantly, the Saudi royal family will do anything to maintain their grip on their kingdom, as well as their own personal power, prestige and wealth. If that means selling oil at a loss, so be it. The kingdom has NO other source of income and NO other choice. If Saudi Arabia were to feel a genuine threat, it could open the spigot and flood the market… literally. The other OPEC members would follow suit, as most are in the same boat as