Friday, March 04, 2016
Sudbury Steve's Fascinating Theory
huge breakthrough in cheap, effective and scalable storage battery technology, our friend Sudbury Steve asks whether this is what caused the Saudis to drive down the world price of oil.
That's a hypothesis that might have legs. Look at it this way. The Saudis' intelligence gives them to believe that a clean energy breakthrough is imminent. They know that's nothing but bad news for the fossil fuel industry. They want to protect their position, prevent the oil price floor from collapsing. And so they decide to cull the herd, get rid of the competition, especially the dabblers who are producing unconventional oil - frackers, bitumen miners, seabed drillers, that sort of thing.
Surely it's better for the Saudis to drive them out of the market now by preparing for a pre-OPEC oil regime with prices a fraction of what they've been in recent years. They know how to drown the unwelcome newcomers - flood the market with cheap oil, cheap enough that the outsiders cannot sustain production and have to fold.
Connecting the dots that seems more than plausible. A lot more than merely plausible.