What would happen if there was no more cheap, abundant Saudi oil? What could civilization do to survive a sudden depletion of cheap oil?
Since this requires speculation, let’s move it to IMHO.
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We tap Alaska!
This is called ‘Peak Oil’ or sometimes ‘post peak oil,’ which is discussion of the world situation when oil productions enters permanent decline. There are several hypothetical scenarios that involve fun things like:
- Unprecedented famine as fuel-based agricultural tools become unusable.
- Dramatically increased fuel prices requiring a shift to public transportation and eventually pedestrian lifestyles.
- The death of commercial aviation (and a massive economic slowdown in basically every sector).
- Cyclical spikes in energy prices.
- The return of preventable diseases and generally lower-quality medical treatment.
Whether and to what extent these things come to pass largely depends on our willingness to adapt to renewable energy sources, our ability to create battery-powered vehicles, and whether we shift back towards local subsistence agriculture.
Saudi Arabia and Venezuela collectively control over 1/4 of the world’s proven oil reserves. When Saudi Arabia runs out of oil, we will be near the end of ALL oil, everywhere. All I know is you’d better hope that we’ve figured something else out by then.
Depends what you mean by ‘sudden’. Are we talking magic or reality here? If we are talking magic, then if Saudi, say, had all it’s oil removed tomorrow then it would be…very bad. Probably the end of our civilization with billions dead ‘bad’. If we are talking reality, then ‘sudden’ would translate into decades if not a century or so, with oil getting progressively more expensive as it because harder to get to, but technology also available at different price points to extract it as the price gets to the point where the technology makes extraction viable economically. At some point the price gets to a tipping point where other technologies that are waiting in the wings become economically viable to compete with oil, and you get an eventual paradigm shift to something new. Sort of like what happened to whale oil. We didn’t run out of whales, simply got to a price point where something else could compete and, eventually, take over. We aren’t ever going to run out of oil, suddenly or otherwise…what will happen, probably in the lift times of folks reading this or participating in this thread is that oil will peak in price, and then something else will take over and it will drop sharply as folks switch to the new paradigm. Then oil will drop like a stone, as only a fraction is needed.
Yes, read about Peak Oil here:
A few years ago there was a lot of press about peak oil. What happened was fracking–which fixed the short term issue of declining oil production–but not at all the longer term one.
As to alternatives a big question is if you care about global warming. If you don’t well there are still massive reserves of coal left in the ground. And you can convert coal to gasoline:
But if you do care about global warming then approaches like electrification with batteries for vehicles.
The US is the top oil producer today, followed by Russia and Saudi Arabia. All three produce between 10 and 11 million barrels/day. Together they account for about 40% of world production. Removing any one of those three would have a major impact but wouldn’t be catastrophic, IMO.
Longer term, the loss of the Saudi reserve of cheap oil with have more far reaching and complex impact. If it’s gradual then there will be time to develop alternate sources of fuel and adapt the marketplace.
If sudden - like Saudi Arabia suddenly being overtaken by ISIS or something - the world would just divert its sourcing elsewhere. Alaska, Eagle Ford, Permian, Bakken, Venezuela, North Sea, Nigeria, Iran, etc.
If gradually, half a century from now, then we’d probably have shifted onto new fuels and technologies by then anyway.
When goods get scarce, they get more expensive. When they get more expensive, people use less of the good. One of those ways is by substituting a cheaper good for the more expensive good. So if bread gets more expensive, people buy potatoes.
When oil gets more expensive people will consume less of it. There are lots of substitutes for oil. Natural gas, biofuels, synthetic fuels, electric vehicles, telepresence, and on and on. So as we consume more oil and oil becomes more expensive other substitutes will become a larger and larger part of the economy.
Note though that these substitutes won’t be as cheap as oil is today. If synthetic fuel was cheaper than oil we’d already be using it today. But it’s not like the gears of civilization will just grind to a stop when the last drop of oil is pumped out of the Saudi Arabian desert.
Also note that we’ve had oil price shocks before. The price of gas suddenly goes up and everyone complains and then a few years later the price goes down a bit. And that’s because higher prices for gas mean more incentive to develop new sources. When oil prices were sky high a decade ago there was a huge amount of oil development in the US and Canada. Then all those new sources caused the price to drop and North American production took a big hit because it wasn’t as cheap as other sources.
So high prices lead to attempts to increase production, which lead to lower prices, which leads to decreased production. Yes there are shocks to the market when prices suddenly and unexpectedly spike or plunge. But over a timescale measured in decades the price hovers around some equilibrium, but that equilibrium isn’t static either.
Oil prices would soar. The economy of oil exporting nations get an influx of cash. Russia, Iraq together export more oil than SA. Venezuela, Canada, the US etc. Oil importers have to tighten their belts. If it is sudden, the markets will crash there is a limit to how large perturbations they can deal with in a short timeframe.
Unprofitable oil fields and wells are suddenly profitable again. Areas that were too expensive to drill in become attractive. Oil production increases untill supply and demand are in balance.
The world produces about 80 million barrels of oil a day, Saudi Arabia produces 10 million of those.
So if global supply dropped to 70 million prices would go up and there’d be some lifestyle changes, but it wouldn’t end civilization. People would invest heavily in more fuel efficient methods of transportation like alternative energy vehicles (electric, hydrogen, compressed air, natural gas, etc), high mpg vehicles, public transit and carpools. Plus people would find ways to travel less by moving closer to work, planning errands better, going on fewer pleasure drives, etc.
Plus oil supplies that are currently not profitable become profitable again, so supply will start to creep up to meet higher demand. I’m not sure but I think North Dakota has cut supply because prices are low. With higher prices, supply goes up again.
It’d take a few years to adjust but we’d be fine in the end.
I’m not sure how the world supply dropping by 13% would affect prices though.
Having lived through the '70’s oil embargo, I’d say not much would change, at least drastically.
I remember gas shortages and rationing (remember odd and even license plate days), prices went up and some things were harder to find (especially in Hawaii since we have to ship in a lot of our goods). But as stated above, people adjusted. And governments did too by not relying so much on foreign fuel sources.
Conversion to natural gas would be the answer and they, and the world have plenty more nat gas then oil and we will be shipping cryogenic liquid natural gas across the oceans like we now do with oil. It looks like Qatar is leaving OPEC exactly for that reason, they are transitioning to natural gas.
Oil prices would rise and other sources would be brought on stream when it became profitable to do so. Note though that this would take time, so if there were a sudden stop to Saudi oil, there would be repercussions.
*What would happen if there was no more cheap, abundant Saudi oil? *
Rather than having to rely on democratically elected bodies to address climate change the market would do it for us ?
What could civilization do to survive a sudden depletion of cheap oil?
Pay attention to problems other than where all those who currently live less than three metres above MSL are going to live in future ?
We’re not going to get to Peak Oil. Instead, we’re going to get Peak Oil Demand. Sometime in the next 20 years or so. Exactly when is uncertain. I’ve seen projections of anywhere from 2023 to 2040.
And Canada gets really rich.
Seriously, our friends up north are sitting on a shit-ton of oil that is presently too costly to extract. Once the price of oil gets above $100 a barrel and stays there, these oil fields suddenly will become very profitable.
It will be an interesting world when the middle east runs out of oil and they lose their big cash cow, and the world’s wealthiest areas become Canada and Venezuela.
Venezuela is already sitting on a huge amount in oil reserves, and except for the minor problem of a corrupt, incompetent government, would be among the wealthiest countries.
I wonder whether the Middle East countries like Saudi Arabia have done enough to plan for a post-oil economy.
Well good thing for them that those Middle Eastern countries have all wisely and shrewdly invested all that oil treasure in infrastructure and education. :smack: