Prince Alwaleed bin Talal said that fracking in the US has lessened demand for their oil, and that they need to begin to find other income sources. In a letter to oil minister, Ali al Naimi and other top government officials, Alwaleed said that fracking was responsible for the declining demand for oil from OPEC.
Alwaleed recommends that the oil rich country, should diversify immediately before the impact gets to be out of hand. He says that the Saudi’s dependence on oil income is, “a truth that has really become a source of worry for many”.
Alwaleed is a billionaire and the owner of the international investment company of Kingdom Holding. Awaleed is speaking out publicly, but many are whispering it backrooms across Saudi Arabia.
Fracking in Canada and the US is taking a toll on global demand and Saudi Arabia has already started initiatives for Saudis to develop technology and service companies, for which they supply part of the start up money.
Chancellor George Osborne is now recommending that the UK develop fracking and drilling off it’s shores to lessen it’s dependence. US growth has exploded despite efforts within the Obama administration to curtail production.
The Baakan Oil Formation in the west, mostly North Dakota, has caused a flurry of economic activity. The demand for workers is so high, the starting wage for Burger King is between $16 and $17 dollars an hour. Companies are even building their own apartment houses to encourage workers to remain with them.
The current output of Saudi oil is 12.5 million barrels per day. At this time, they had planned to raise capacity to 15 million barrels per day, but slacking demand has put that plan on hold. OPEC has dropped their prediction of oil production by 250,000 barrels per day.
The scary part for OPEC is that although the Baakan Oil Formation has much oil within it’s confines (3.65 Billion barrels of oil) and sister Three Forks contains another 3.73 BBO, the Monterey Oil Formation in California contains 15.4 BBO. And the Green River Oil Formation has as much as 3 trillion barrels of oil, of which half is recoverable with current technology.
Governments and environmentalists have placed roadblocks to developing these sites, not to mention various other oil reserves in Alaska, the Bering Sea and off our coasts. They claim fracking, which has been in use since 1949 is unsafe, although they have not been able to find any credible evidence of such. Lisa Jackson, former head of the EPA, testified to congress, that she had been unable to find such an example, even after 3 1/2 years of investigations.
With an all out effort, the US could be exporting large quantities of natural gas and oil within fifteen years.