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[lundu]

Splurge,

The situation that you have outlined plays out in all the shale fields that I have read about...high initial production and a rapid, sharp decline rate.  Hence the need to keep drilling new wells which adds to the overall cost per well.  And I too have read about the Saudis and their refinery plans, and their possible nuclear power plants. They seem to be trying to diversify their energy assets.  I don't know whether they'll be competing directly against the US but their location would easily enable them to sell energy to many nations, India and China come to mind.  My whole argument has been that they seem to me to be going about it the wrong way.  Yes, we have expanding supply but a healthy world economy will still need a lot of oil for many years to come.  I think that prior to 2008 world demand was around 87,000,000 bls a day and today it is somewhere around 91,000,000 bls per day, an increase during some very uncertain economic times.  If the world economy were to be in better shape, stable with average growth prospects, then there would be enough of an oil market for all producers, but now we have chaos.  Don't get me wrong, low energy prices are good for economies but not drastic slides that create bankrupt companies, unemployment, and huge loan defaults,and whole countries that can't fund their social programs.  A slow steady decline is managable.  I just feel that the Saudis didn't have to do what they did and it won't deliver the desired results.


Lundu