That would be me. I’ve been watching with increasing enthusiasm and excitement the development of shale oil and natural gas in North Dakota and Pennsylvania and elsewhere that I’d almost decided that our energy prospects looked awfully good.
I haven’t read the report. It’s 150 pages long. But Evans-Pritchard has, and he calls it sobering:
I don’t wish to knock shale. It is a Godsend and should be encouraged with utmost vigour and dispatch in Britain. But it is for now plugging holes in global supply rather than covering the future shortfall as the industrial revolutions of Asia mature.
What he is saying is that Saudi Arabia’s internal thirst for water and air conditioning is increasingly using more and more of their own oil resources, leaving less and less to export.
And by 2030, they might have to start importing oil. That’s mind-boggling:
The basic point – common to other Gulf oil producers – is that Saudi local consumption is rocketing. Residential use makes up 50pc of demand, and over two thirds of that is air-conditioning.
The Saudis also consume 250 litres per head per day of water – the world’s third highest (which blows the mind), growing at 9pc a year – and most of this is provided from energy-guzzling desalination plants.
And they are already using all of the natural gas they produce:
The Saudis already consume a quarter of their 11.1m barrels a day of crude output. They are using more per capita than the US…!
The country already consumes all its gas…
As I said, this report, referred to by Evans-Pritchard, is altering my perception of the global energy landscape. If the Saudis have to start importing oil, where will they get it? No report I’ve seen suggests that the US will be in any position to export any significant amount of energy by the time the Saudi’s need it.
Here’s the equation: increased demand, limited supply = higher prices. Maybe much higher.
Like I said, this alters my thinking.