Shale Revolution's Impact on Saudi Wealth and Power
The rise of the West was driven by the Industrial Revolution beginning in the 18th century. It has since been fueled by fossil fuels--initially coal and later with oil and gas. Coal was indigenous in Britain and America but it is highly polluting and left much of London and New York with a thick coat of soot on everything in sight. Oil burns relatively cleaner but much of it is in the Middle East, particularly in the Persian Gulf region. First Britain and then United States saw the significance of the region and sought to control its energy resource through dictatorial puppet regimes, many of which still survive with active support of the Western powers.
Recent US EIA report on vast shale oil and gas reserves (over a trillion barrels) in many countries, including Pakistan (9.1 billion barrels of oil and 105 trillion cubic feet of gas), has prompted a warning to Saudi government from Saudi Prince Alwaleed Bin Talal. While the Prince's warning is about economic impact, I see much broader long term implications of it for the US-Saudi alliance and the power and influence of the Saudi royalty in much of the region and the rest of the world.
The top ten countries together have 345 billion barrels of shale oil reserves These include Russia (75 billion barrels), United States (58 billion barrels), China (32 billion barrels), Argentina (27 billion barrels), Libya (26 billion barrels), Venezuela (13 billion barrels), Mexico (13 billion barrels), Pakistan (9.1 billion barrels), Canada (8.8 billion barrels) and Indonesia (7.9 billion barrels). Notable on this list are US and China, the top 2 consumers of oil in the world, both having vast shale oil reserves of their own.
In an open letter to Saudi Oil Minister Ali al-Naimi and other Saudi ministers, published on Sunday via his Twitter account, Prince Alwaleed said demand for oil from OPEC member states was "in continuous decline". He said Saudi Arabia's heavy dependence on oil was "a truth that has really become a source of worry for many", and that the world's biggest crude oil exporter should implement "swift measures" to diversify its economy, according to news media reports.
Shortly after the Prince issued his warning, a report from OPEC published this week showed the group's oil export revenue hit a record high of $1.26 trillion in 2012. However, forecasts from the group raise doubts over whether that level of earnings can be sustained in the face of competition from shale oil. Saudi Arabia, the world's biggest oil exporter, is now pumping at less than its production capacity because of declining consumer demand, Prince Alwaleed said in the letter.
Saudi dependence on oil stems from the fact that nearly 92% of the Saudi government budget this year comes from oil , according to Wall Street Journal. The growing shale oil production in the United States means Saudi Arabia will not be able to raise its production volume to 15 million barrels of oil per day, Prince Alwaleed said. Current capacity is about 12.5 million bpd; a few years ago the country planned to increase capacity to 15 million bpd, but then put the plan on hold after the global financial crisis in 2008.
Oil-rich Gulf nations like Saudi Arabia, Qatar, UAE and Iran have used their petrodollars to influence events in the Middle East and West Asia. They have funded their favorite sectarian groups to fight bloody proxy conflicts in Lebanon, Iraq, Pakistan and Syria. Saudis have bankrolled radical Sunni groups in Pakistan while Iran has financially backed Shia Hezbollah in Lebanon and other radical Shia groups in Iraq and Pakistan. Qatar, Saudi Arabia and UAE have supported pro-West elements to roll back democracy in Egypt.
Even if Saudis do heed Prince Alwaleed's warning and succeed in diversifying their economy, it is highly unlikely that the desert Kingdom would be able sustain its current power and influence over the long haul. This is going to be bad news for the rulers who will respond with violence to resist change. But it is potentially good news for the Saudi people and the Arab and Muslim world at large. It'll open up opportunities for reforms leading to positive changes in the Middle East and the surrounding region.
Related Links:
Haq's Musings
Pakistan's Vast Shale Oil and Gas Reserves
Saudi vs Turkish Influence in Pakistan
Shale Gas in Pakistan
Power Shift After Industrial Revolution
Pakistan Needs Shale Gas Revolution
Will Saudi Society Change Peacefully?
Pakistan Starts Tight Gas Production
The top ten countries together have 345 billion barrels of shale oil reserves These include Russia (75 billion barrels), United States (58 billion barrels), China (32 billion barrels), Argentina (27 billion barrels), Libya (26 billion barrels), Venezuela (13 billion barrels), Mexico (13 billion barrels), Pakistan (9.1 billion barrels), Canada (8.8 billion barrels) and Indonesia (7.9 billion barrels). Notable on this list are US and China, the top 2 consumers of oil in the world, both having vast shale oil reserves of their own.
In an open letter to Saudi Oil Minister Ali al-Naimi and other Saudi ministers, published on Sunday via his Twitter account, Prince Alwaleed said demand for oil from OPEC member states was "in continuous decline". He said Saudi Arabia's heavy dependence on oil was "a truth that has really become a source of worry for many", and that the world's biggest crude oil exporter should implement "swift measures" to diversify its economy, according to news media reports.
Shortly after the Prince issued his warning, a report from OPEC published this week showed the group's oil export revenue hit a record high of $1.26 trillion in 2012. However, forecasts from the group raise doubts over whether that level of earnings can be sustained in the face of competition from shale oil. Saudi Arabia, the world's biggest oil exporter, is now pumping at less than its production capacity because of declining consumer demand, Prince Alwaleed said in the letter.
Saudi dependence on oil stems from the fact that nearly 92% of the Saudi government budget this year comes from oil , according to Wall Street Journal. The growing shale oil production in the United States means Saudi Arabia will not be able to raise its production volume to 15 million barrels of oil per day, Prince Alwaleed said. Current capacity is about 12.5 million bpd; a few years ago the country planned to increase capacity to 15 million bpd, but then put the plan on hold after the global financial crisis in 2008.
Oil-rich Gulf nations like Saudi Arabia, Qatar, UAE and Iran have used their petrodollars to influence events in the Middle East and West Asia. They have funded their favorite sectarian groups to fight bloody proxy conflicts in Lebanon, Iraq, Pakistan and Syria. Saudis have bankrolled radical Sunni groups in Pakistan while Iran has financially backed Shia Hezbollah in Lebanon and other radical Shia groups in Iraq and Pakistan. Qatar, Saudi Arabia and UAE have supported pro-West elements to roll back democracy in Egypt.
Even if Saudis do heed Prince Alwaleed's warning and succeed in diversifying their economy, it is highly unlikely that the desert Kingdom would be able sustain its current power and influence over the long haul. This is going to be bad news for the rulers who will respond with violence to resist change. But it is potentially good news for the Saudi people and the Arab and Muslim world at large. It'll open up opportunities for reforms leading to positive changes in the Middle East and the surrounding region.
Related Links:
Haq's Musings
Pakistan's Vast Shale Oil and Gas Reserves
Saudi vs Turkish Influence in Pakistan
Shale Gas in Pakistan
Power Shift After Industrial Revolution
Pakistan Needs Shale Gas Revolution
Will Saudi Society Change Peacefully?
Pakistan Starts Tight Gas Production
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NEW YORK — US proved oil reserves grew by a record amount in 2011, according to a government report Thursday, in the latest indicator of the North American energy boom.
The US added 3.8 billion barrels of crude in 2011, a 15 percent increase, according to the US Energy Information Administration. The amount represents a record volumetric increase in oil reserves for the second year in a row, EIA said.
Proved oil reserves stood at 29.0 billion barrels in 2011 (vs 257 billion barrels in Saudi Arabia), the highest volume since 1985.
"Horizontal drilling and hydraulic fracturing in shale and other tight rock formations continued to increase oil and natural gas reserves," said EIA Administrator Adam Sieminski.
"Higher oil prices helped drive record increases in crude oil reserves, while natural gas reserves grew strongly despite slightly lower natural gas prices in 2011."
The data came as US petroleum producers continue to push oil output to levels not seen since the early 1990s.
Energy companies have also boosted natural gas output in recent years due to the shale boom. While natural gas output varies monthly somewhat due to incremental investment decisions, US natural gas production has been at record levels in recent years.
The US added 31.2 trillion cubic feet (0.9 trillion cubic meters) of natural gas reserves in 2011, an increase of 9.8 percent, the EIA said. The 2011 natural gas volumetric increase was the second largest in US history after the 2010 rise.
http://www.saudigazette.com.sa/index.cfm?method=home.regcon&contentid=20130802175664
A recent report by the European Parliament reveals how Wahabi and Salafi groups based out of the Middle East are involved in the "support and supply of arms to rebel groups around the world." The report, released in June 2013, was commissioned by European Parliament's Directorate General for External Policies. The report warns about the Wahabi/Salafi organisations and claims that "no country in the Muslim world is safe from their operations ... as they always aim to terrorise their opponents and arouse the admiration of their supporters."
The nexus between Arab charities promoting Wahabi and Salafi traditions and the extremist Islamic movements has emerged as one of the major threats to people and governments across the globe. From Syria, Mali, Afghanistan and Pakistan to Indonesia in the East, a network of charities is funding militancy and mayhem to coerce Muslims of diverse traditions to conform to the Salafi and Wahabi traditions. The same networks have been equally destructive as they branch out of Muslim countries and attack targets in Europe and North America.
http://dawn.com/news/1029713/european-parliament-identifies-wahabi-and-salafi-roots-of-global-terrorism
https://docs.google.com/viewer?a=v&pid=sites&srcid=ZGVmYXVsdGRvbWFpbnxoYWlkZXJub3Rlc3xneDo3NDEwMDI3NjViZTNjODZm
http://aje.me/19sZmzj via @AJEnglish #SaudiArabia #America
The numbers certainly demand our attention. Of an estimated 5,000 to 10,000 foreign fighters in Syria, as many as 2,000 are said to be European nationals, as well as some 100 Australian citizens and several dozen American passport holders, according to published sources. While some are fighting alongside “moderate” rebel groups such as the Free Syrian Army, most have reportedly joined the ranks of the militant Jabhet al-Nusra and the formerly Qaeda-linked Islamic State of Iraq and Syria, or ISIS.
I know the mentality of these nationless combatants. I fought beside them.
As a teenage Afghan refugee living in Pakistan in the 1980s, I joined the anti-Soviet resistance. I took up arms in a cause we called jihad, or holy war — but one focused on liberating our homeland, not exporting an ideology. War came to us through Soviet invasion: We hated it, and we wanted to live through it to see a free Afghanistan at peace.
Pitting a small, impoverished Muslim nation against an infidel invader, Afghanistan’s conflict attracted up to 20,000 foreign fighters in the 1980s, the largest contingent drawn to any Muslim country in modern history. Made up mostly of Saudis and Pakistanis, the army of volunteers also included Egyptians, Tunisians and Indonesians, among others.
Make no mistake: The Afghan mujahedeen, equipped with Western arms, won that war. International volunteers played a marginal role in sealing our victory, their numbers notwithstanding.
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With an estimated 1,500 groups fighting in Syria, the conflict is clearly far more complex than the Afghan war. Europeans and Americans of Syrian heritage are fighting to liberate their homeland from the murderous Assad regime. Sunnis from Saudi Arabia and Libya have been drawn by their solidarity with coreligionists.
The build up to intervening in Syria is all too similar to the run up to Iraq in 2003. Farivar underestimates foreign fighters by some 6,000...
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In an attempt to understand the foreign fighters, some Western experts have crafted caricatures — the revenge-seeker, the status-seeker, the identity-seeker and so on — but the legion of fighters with varied and often overlapping motives defy easy stereotypes. As the scholar Thomas Hegghammer observed: “In reality, most foreign fighters never engaged in out-of-area operations, but fought in one combat zone at the time.”
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In Afghanistan, hundreds of veterans stayed behind and followed in Osama bin Laden’s footsteps to later infamy. Others, gripped by religious fervor and martial wanderlust, went on to cause mayhem in places like Algeria and Egypt during the 1990s.
But not all did, of course. For some, their adventure concluded, quiet civilian lives beckoned. I befriended a young Arab-American from New York who was happy to be heading home at the end of the war. A Harvard-educated British convert I knew went on to become a distinguished war correspondent. I, too, became a writer and journalist. You might say that in the end, we were more closely allied in peace than we had been in war.
http://www.nytimes.com/2014/04/02/opinion/the-foreign-fighters-and-me.html
Sulaimaniya, Iraq — As one could see from President Obama’s recentinterview in The Atlantic, he pretty much hates all the Middle East’s leaders including those of Turkey, Iraq, Syria, Israel, Saudi Arabia, Qatar, Jordan, Iran and the Palestinians.
Obama’s primary goal seems to be to get out of office being able to say that he had shrunk America’s involvement in Iraq and Afghanistan, prevented our involvement on the ground in Syria and Libya, and taught Americans the limits of our ability to fix things we don’t understand, in countries whose leaders we don’t trust, whose fates do not impact us as much as they once did.
After all, the president indicated, more Americans are killed each year slipping in bathtubs or running into deer with their cars than by any terrorists, so we need to stop wanting to invade the Middle East in response to every threat.
That all sounds great on paper, until a terrorist attack like the one Tuesday in Brussels comes to our shores. Does the president have this right?
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The Kurdish government, which was allowing a strong opposition party to emerge and a free press, is now backtracking, with its president, Massoud Barzani, refusing to cede power at the end of his term, and the stench of corruption is everywhere. The Kurdish democratic experiment is hanging by a thread. More U.S. aid conditioned on Kurdistan’s getting back on the democracy track would go a long way.
“It is one big game of survivor out here,” said Dlawer Ala’Aldeen, president of the Middle East Research Institute in Kurdistan. “America needs to constructively engage the Kurds, offer them conditional help and make them the partner that America deserves. Here, everyone listens to and likes America. [The Kurdish] people want America to protect them from Iran and Turkey.”
Kurdistan and Tunisia are just what we dreamed of: self-generated democracies that could be a model for others in the region to follow. But they need help. Unfortunately, Obama seems so obsessed with not being George W. Bush in the Middle East that he has stopped thinking about how to be Barack Obama here — how to leave a unique legacy and secure a foothold for democracy … without invading.
Author links open overlay panel Ghulam Mohyuddin Sohail a, Ahmed E. Radwan b, Mohamed Mahmoud c
https://www.sciencedirect.com/science/article/pii/S235248472200840X
Recent advancements in technologies to produce natural gas from shales at economic rates has revealed new horizons for hydrocarbon exploration and development worldwide. The importance of shale oil and gas has aroused worldwide interest after the great success of production in North America. In this study, different marine source rocks of Pakistan are evaluated for their shale gas potential using analogs selected from various North American shales for which data have been published. Pakistani formations reviewed are the Datta (shaly sandstone), Hangu (sandy shale), Patala (sandy shale), Ranikot (shaly sandstone), Sembar (sandy shale) and Lower Goru (shaly sandstone) formations, all of which are known source rocks in the Indus Basin. Available geological data of twenty-six wells (e.g., geological age, depositional environment, lithology and thickness), geochemical data (e.g., total organic carbon (TOC), vitrinite reflectance (Ro), rock pyrolysis analysis and maturity), petrophysical data (e.g., porosity and permeability) and dynamic elastic parameters estimated from logs (Young’s modulus and Poisson’s ratio) have been investigated. According to this study, the Pakistani shales are explicitly correlated with the most active shale gas plays of North America. The burial depths or geological position of the Pakistani shales are generally comparable to or slightly higher than the North American shales based on the available data. The thicknesses of the Pakistani (except for the Sembar shale) and North American shales fall in similar ranges. In terms of mineralogical composition, all of the Pakistani shales except the Ranikot and Hangu shales have quartz contents in the 40% to 50% range (approximately), which is similar to most of the North American shales. The high maximum TOC of the Hangu and Sembar shales (10%) is comparable to the New Albany, Antrim and Duvernay shales. The maximum TOC values for the Ranikot (3%), Lower Goru (1.5%) and Datta (2%) shales are lower than all North American shales. The TOC of Patal Shale (
5%–10%) is comparable to Fayetteville and Eagle Ford shales. The geological and geochemical parameters of all the Pakistani shales reviewed in this work are promising regarding their shale gas prospects. However, geomechanical data are required before conclusions on these shales’ economic production can be made with confidence.
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The exploitation of shale gas reservoirs may enhance gas production and reduce the severity of the ongoing energy crisis. The main challenge in Pakistan is to evaluate the shales using limited data and samples. That is why only a few companies are working on shale gas reservoirs in Pakistan now. The researchers need to assess and rank prospective Pakistani shales to entice companies to consider shale gas development. The geological characterization of Pakistani shales has been investigated by several authors (e.g., Warwick et al., 1995, Kazmi and Abbasi, 2008, Ahmad et al., 2012, Hakro and Baig, 2013, Jalees, 2014), but detailed work is required on geochemical, petrophysical and geomechanical characterization for assessing the actual potential of shales in Pakistan (Abbasi et al., 2014).