"NOBODY SHOULD IMAGINE THE WORLD WILL CONTINUE TO DEMAND OIL AS LONG AS YOU HAVE IT IN YOUR FIELDS," Al Sabban said in an interview. "We need to prepare ourselves for that stage."
The U.S. shale revolution showed that forecasts of dwindling world oil supply were premature. It also gave credence to the old adage, attributed to a Saudi oil minister more than 30 years ago, that THE STONE AGE DIDN'T END BECAUSE OF THE LACK OF STONE. With costs falling for clean energy and international attention focused on slowing climate change, the Saudis are more worried that the world is inching closer to PEAK DEMAND.
Among INDUSTRIALIZED COUNTRIES, that peak was reached 10 YEARS AGO, according to the International Energy Agency, and fast-developing countries such as India and China won't become as carbon-intensive.
Oil supplied 31 PERCENT of the world's energy in 2012, compared with 46 PERCENT in 1973. Prices dropped 48 percent last year, the most since 2008, yet global production rose 2.1 percent to 93.3 MILLION BARRELS A DAY, according to the IEA.
The price plunge was caused by YEARS OF RECORD-HIGH PRICES that spurred expanding SUPPLIES while impairing DEMAND -- and not a Saudi conspiracy, Saudi Arabia and other members of the Organization of Petroleum Exporting Countries hope cheap energy will foster economic growth and, in turn, more oil consumption, he said.
While economists say that OIL DEMAND DOESN'T RISE OR FALL MUCH in response to price fluctuations in the short term, there's some evidence the bear market is already having OPEC's intended effect. Periods of LOWER PRICES HISTORICALLY LEAD TO STRONGER DEMAND, Societe Generale SA said in a Jan. 14 report.
Yet the LINK BETWEEN ECONOMIC GROWTH AND OIL IS WEAKENING as countries invest in alternatives. EFFICIENCY INVESTMENTS AND CLIMATE BASED POLICIES ARE REDUCING THE AMOUNT OF ENERGY NEEDED TO PRODUCE ONE UNIT OF GROSS DOMESTIC PRODUCT, saving a continent's worth of energy demand as developing countries add to global consumption, the IEA said in October. Consumption in the 34 countries of the Organisation for Economic Co-operation and Development will shrink in 2015.
Not everyone expects demand to taper off. World consumption will reach 104 million barrels a day in 2040, from 90 million barrels a day in 2013, the IEA estimated. The U.S. Energy Information Administration projected daily demand reaching 117.05 million barrels in 2040, Exxon Mobil Corp. predicted 114 million barrels, and OPEC forecast 111.1 million.
Helping on many fronts GLOBAL INVESTMENTS IN CLEAN ENERGY ROSE 16 PERCENT TO 310 BILLION IN 2014. Solar and wind installations will grow 10 percent this year, BNEF said in a Jan. 9 report. In addition to long term climate control this helps reduce oil DEPENDENCE whilst stimulating economies with jobs and reduced import requirements.
The SAUDIS HAVE PLEDGED TO INVEST 109 BILLION IN RENEWABLE POWER by 2040, the head of the agency in charge said Jan. The project is meant in part to free UP MORE OIL FOR EXPORT as the kingdom's rapidly growing population consumes more energy.
"USING OIL MAKES NO SENSE AT ALL, LEAVING ASIDE CLIMATE ISSUES," said Jan Kalicki, a former Commerce Department counsellor. "It shows the Saudis are focused not just as a producer but as a consumer." - MMMM SMART COOKIES !
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Reference: green-power-project.blogspot.com
