“Saudi royal and billionaire Prince Alwaleed bin Talal thinks the US shale boom is endangering his country’s economy. The WSJ reports that the prince published a letter yesterday that he wrote in May to the Saudi Oil Minister and several others, warning of the dangers to Saudi Arabia of American gas production. Still, the importance of Saudi oil to the US and to the world market is not diminishing. The Kingdom’s spare capacity and ability to increase exports in times of need (during periods of decreased supply from Iran and Libya, for example) helps keep the global oil market stable. Saudi oil has been consumers’ best shield against price shocks for a while now, and as long as we consume oil, no amount of cheap American gas can make that otherwise. But if you’re in the House of Saud, that’s not much comfort. There’s no denying that the Kingdom’s economy will suffer under decreased demand for petrochemical exports from its biggest customer—the US. American domestic production means a steep drop-off in demand for the $100 billion Gulf petrochemical industry, and if China masters the exploitation of its own shale reserves, the cracks in the Saudi economic model will grow wider still.”Frack, baby, frack!
Couldn’t happen to a nicer bunch of terrorism-exporting religious fanatics.