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.
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I noted yesterday that a barrel of dilbit, Western Canadian Select, sells for about $22.00US with a production cost of $40.00US or more.
The Saudis can produce a barrel of light sweet crude for $10 to $25 and get the Brent crude price ($38.86 right now) for it.
I suspect they are pumping for cash flow to maintain the lifestyle developed when oil was $80 or more. Driving the fringe producers out of the market is just a bonus.
And maybe they've actually seen the writing on the wall and are just gettin' theirs while the gettin' is good. One can only hope...
That's certainly what Steve seems to suggest, Chris.
Cool. Do you have a link?
As others suggest.. The Saudis simply see the writing on the wall:
'Burning carbon will end'*
and they don't want to own stranded assets.
* either by law (when we wake up - lets hope) or
* by civilization collapse or
* market forces (if we get really lucky)
I did read the Guardian article, but it's too short on details. Also, no one else has run any story, other than re-reporting the Guardian's take, and there is nothing obvious on ARPA-E's website. Finally, the Guardian is, I'm sorry to say, not terribly good on energy reporting, with a long sorry history of overstatements and hype. Energy is too important to take this kind of Fox Mulder approach ("I want to believe"), because people really are hoping for solutions, and this kind of Guardian story plays on those hopeful emotions, not facts.
If there is a real breakthrough, it'll be obvious, not inscrutable.
Thanks for the mention Mound. I believe the Hydrogen Economy is a rational solution to our extesential threat. The problem is as demostrated by the oil sands is that Economics is as rational as the New Testament.
P.S. I am from Haliburton not SUdbury.
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