So my question is whether The Sierra Club is happy or sad about this? I’m going with happy with deep reservations.
As we’ve said before, late last year the Saudis dropped an “oil bomb” on the world. Some believe it was dropped in protest of American foreign policy, but also it appears (and maybe even more importantly) in an attempt to kill budding US domestic oil production. The Saudis do not want US energy independence.
At $80 a barrel fracking oil makes sense. At $40 a barrel it does not. (oil – WTI – is at this moment is $44.60/barrel) Lots of jobs go away at $40 oil. But hey, that’s a “market.” (Except that oil prices are dictated to a large degree by the Saudi government.)
It should be noted that at $40/barrel many “green” energy sources really don’t make sense. This is also a small part of the equation.
(From The Daily Reckoning)
The fracking industry assumed oil would remain in a range of $70-130 per barrel. Over $5 trillion was spent on exploration and development, much of it in Canada and the U.S. This led to a flood of new oil, which reduced the market share of OPEC producers. Saudi Arabia was losing ground both to OPEC competitors and the frackers.
In mid-2014, Saudi Arabia developed a plan to destroy the fracking industry and regain its lost market share. The exact details of the plan have never been acknowledged publicly but were revealed to your editor privately by a trusted source operating at the pinnacle of the global energy industry.