Oil Shocks

I would have been less surprised to learn that bigfoot is real than to read what I did in an op-ed by Yousuf Al-Khuwailit in yesterday's Saudi Gazette.

The article was titled An Impending Danger and was basic boilerplate that the Kingdom of Saudi Arabia needs to take steps to become more responsible in its use of energy resources. This is a basic awareness-raising article that people in the US have been used to seeing forever, and was no real surprise to see here in Saudi Arabia. The surprising part was the third sentence of the article:
There are also dangerous indexes that indicate we might become importers of oil instead of exporters within the next two decades.

Saudi Arabia importing oil? The very thought is unfathomable. According to US Energy Information Administration figures and my calculator, Saudi Arabia's daily oil consumption is less than 1/4 of its daily oil production. Those figures are through 2012, but I think the ratio is has not changed much in the last 14 months. There are warnings from Saudi Aramco, the country's oil company, that energy needs in the Kingdom are about to dramatically increase, but to quadruple in two decades?

What does that mean for the United States? The U.S. is currently experiencing an oil boom, with improved methods of gathering (fracking and horizontal drilling) that allow for the exploitation of previously unreachable oil supplies. A country that as recently as 2012 imported over 7 million barrels of oil a day (US EIA figures again-those numbers are coming in handy) is now considering relaxing its ban on exporting oil that has been in place. This is all taking place while an administration that is, if not openly hostile to oil production increases, not going out of its way to be supportive of any fossil fuel industry.

This is a great time for the United States to exploit our resources, and to be ready to expand on our production. Yes, improved technology and alternative sources of energy are nice to have, but when the opportunity to increase jobs, and cut into our normal trade deficit comes along, we should do all we can to take advantage of it.

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