PRINCE ALWALEED: Fracking Is Going To Crush The Saudi Economy If Nothing Is Done
Business Insider:
Billionaire Saudi Prince Alwaleed bin Talal has warned shale oil and gas development poses a threat to the kingdom's economy, the Wall Street Journal's Summer Said reports.
In an open letter to Saudi oil minister Ali al Naimi [in Arabic], Alwaleed also warns the kingdom must diversify its revenue streams in the face of flagging oil demand.
A source translated the key portion of the note:
With all due respect to your Highness’ viewpoint about shale gas and that it poses no danger on Saudi economy at ‘the present time’, I was hoping that your Highness would also shed light and focus on the danger of this matter in the ‘not-so-distant future’, especially that America and some Asian countries made big discoveries in shale gas extraction which will affect the oil industry around the world in general and Saudi Arabia in particular...
He also sent us the following summary of the letter's salient parts:
The third page calls on the government to decrease its dependence on oil and start investing in alternative energy sources like solar.
The fourth page is to the deputy oil minister after he told BBC that Saudi is not concerned about shale gas at the present time. Alwaleed says shale gas may not be a concern in the present, but it should be worrying for the future of Saudi energy exports.
The fifth page is similar to the fourth. His handwritten comment asks if indeed 92% of Saudi revenue is from oil and that we should pay more attention and shale gas and other energy developments around the world.
Prince Alwaleed said demand for oil from Organisation of the Petroleum Exporting Countries (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.
...
"Our country is facing a threat with the continuation of its near-complete reliance on oil, especially as 92% of the budget for this year depends on oil," he said.
"It is necessary to diversify sources of revenue, establish a clear vision for that and start implementing it immediately."
Naimi recently denied that shale posed a threat, but the prince challenges that view, Said says:
We disagree with your Excellency on what you said, and we see that raising North American shale gas production is an inevitable threat," Prince Alwaleed's letter said, in comments directed at Mr. Naimi.
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