Oil 1 Peak Oil 21
HIGH PRICES K2 DEVELOPMENT
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HIGH PRICES K2 DEVELOPMENTHIGH OIL PRICES FORCE THE MID EAST TO BECOME STABLE Matthew Simmons, oil industry analyst and CEO of Simmons &Company International, 8/4/05 http://www.washingtonpost.com/wp-dyn/content/discussion/2005/07/26/DI2005072601004.html Matthew Simmons: First of all Saudi Arabia's oil won't run out. The risk is that it will go into production decline. It's really important for people to realize that production decline is not the same as running out. Once they start the production decline the price of oil will and should go way up, and in a strange sense this opens a window for Saudi Arabia and the other Middle East oil producers to rapidly address an issue they have ignored for the past 50 years. None of the Middle East countries have an economy that is stable outside of oil. They all have exploding birth rates, 40-50% populations under 20 with no jobs, and if they understand this is happening and the oil has peaked, they have a marvelous opportunity of using this era of extremely high oil prices to create sustainable economies over a 5-10 year period of time and create an economic average GDP per capita equal to at least Greece or Portugal or Eastern European countries and that would start to narrow the incredible gap between the handful of incredibly rich and the rest who are poor. In time they could actually create a long period of economic stability and widespread economic stability if high oil prices are wisely used to create a sustainable and diversified economy and more equal distribution of wealth per capita. AT: SHOCKS KILL ECONEMPIRICALLY DENIED- TRADE SURPLUS WAS RESILIENT AFTER 1973 OIL SHOCK Library of Congress – Federal Research Division Country Profile: Saudi Arabia, September 2006 http://www.stat-usa.gov/miscfiles.nsf/vwNoteIDLookup/NT000F8F26/$File/SAUDI_ARABIA.PDF?OpenElement Exports: Nearly 90 percent of Saudi exports are related to oil. Petrochemicals, plastics, construction materials (cement especially), and agricultural products make up the remainder of Saudi exports. Export earnings (mainly from oil and petroleum products) totaled an estimated US$175 billion in 2005. The value of exports is expected to increase in 2006, as increased production likely will offset any reduction in the price of oil. The United States and Japan receive the largest share of Saudi exported commodities about 17 and 14 percent, respectively, of the 2005 total. Other primary destinations include South Korea, China, Singapore, and Taiwan. Trade Balance: Saudi Arabia annually produces a significant trade surplus. Even in the wake of the 1973 oil shock, revenues from exports exceeded the cost of imports. Saudi Arabia posted a trade surplus of nearly US$124 billion in 2005, almost solely the result of a banner year for oil production and prices. . OIL PRICES K2 ECONOMIC REFORMLONG-TERM ECONOMIC REFORM LIKELY—OIL PRICES KEY TO STABILITY Howard Handy. Chief Economist & General Manager of Samba The Saudi Economy: Recent Performance and Prospects for 2008-09 April 2008 http://www.saudi-us-relations.org/articles/2008/ioi/080410-samba-economy.html Editor's Note: Today for your consideration, we present a Samba report on the Saudi economy, "The Saudi Economy: Recent Performance and Prospects for 2008-09." The report is the latest in a series of insightful documents prepared by the office of Samba's Chief Economist Howard Handy. This SUSRIS IOI provides the summary from the Samba report and links to the complete document. We thank Samba and Mr. Handy for producing these informative reports and sharing them with you. The Saudi Economy: Recent Performance and Prospects for 2008-09 Office of the Chief Economist of Samba Summary Economic expansion and diversification continue apace in Saudi Arabia and this momentum should be maintained in the period ahead. Global oil prices are expected to remain high, investment in domestic oil and gas production capacity is being ramped up, and the enormous potential of the private sector is being unleashed by fundamental improvements to the business environment. As a result, robust public and private sector investment should underpin real economic growth of 6 percent or more annually over the coming years. - Hydrocarbons will remain the cornerstone of the economy. The sector's contribution to real GDP is expected to rebound this year in line with a pickup in crude oil output and investment in productive capacity. In nominal terms the sector is expected to grow by as much as one third, as global oil prices are buoyed by market demand, supply concerns, and speculative activity. * The surge in Saudi oil revenue will support further brisk growth in government spending (around 15 percent both this year and next). Much of this will be directed towards basic infrastructure, but spending on salaries and other benefits, as well as subsidies, will also be raised in a bid to offset the social costs of rising inflation. *
“Saudi Arabia Intelligent infrastructure” (Subtitle- DESPITE A PERIOD OF UNPRECEDENTED WEALTH FOR SAUDI ARABIA , KING ABDULLAH IS COMMITTED TO AN AMBITIOUS REFORM AGENDA . AND DELIVERING A WORLD - CLASS INFRASTRUCTURE IS CENTRAL TO HIS GOVERNMENT’S PLAN FOR ECONOMIC DEVELOPMENT”) www.businessweek.com/adsections/2007/pdf/09172007_Saudi.pdf+thrive+oil-prices+%22saudi+economy+%22&hl=en&ct=clnk&cd=6&gl=us&client=firefox-a With $350 billion in new projects, Saudi Arabia has embarked on a significant economic development program with the goal of establishing the kingdom as a global industrial force. To support this aim, and to position the country as a regional transport and logistics platform, much of the investment is directed at the cre- ation of a sophisticated infrastructure. From water desalination plants to improved health-care facili- ties, the government is upgrading capacity to meet the challenge of a growing and increasingly affluent population. But nowhere is this more evident than in the country’s transport system. The country’s rail network is preparing for change, on a massive scale. New lines will link the east and west coasts of the country and population centers from north to south. The coun- try’s ports and port-storage facilities will also be expanded as the kingdom seeks to establish itself as a regional transshipment cen- ter, in competition with established Gulf hubs. The Millennium Port, to be built as part of the ambitious King Abdullah Economic City, north of Jeddah, will be the among the world’s 10 largest on completion. Air services are expanding too, as two private low- cost airlines have recently launched services alongside flag-carrier Saudi Arabian Airlines. Competition is also growing in the telecoms sector as the government has opened the market to a host of new operators. Competition for new mobile subscribers is expected to be fierce, but it is broadband that offers the greatest potential for growth, analysts say. Some 38% of Saudis have PCs, yet only 1% can cur- rently access high-speed broadband. From residential complexes to industrial clusters, large-scale construction continues apace, both as a result of the oil boom and as a catalyst for the development of the non-oil sector. The economic cities planned nationwide are central to this latter aim. However, despite the furious pace of development, environmental awareness is increasingly visible and some progressive steps have been taken to ensure sustainability is built into every new project. Despite one of the longest periods of high oil prices in history, with crude currently around $70 to $75 a barrel – a level sustainable for the foreseeable future, given strong demand from Asia – Saudi Ara- bia has pressed ahead with the comprehensive political and eco- nomic reform agenda it first outlined at the start of the decade. “Reforms look set to continue, while spending has been quite sensible, generally aimed at long-term projects such as infrastruc- ture, boosting the non-oil sector (notably pharmaceuticals and ser- vices) and facilitating the development of new industrial and knowledge cities,” says Gerd Nonneman, senior professor in Arab- Gulf Studies at the U.K.’s Exeter University. Others agree. “The Saudi Arabia of today is transforming on many fronts, with changes introduced at all levels of society,” says Christian Koch of the Gulf Research Center in Dubai. Nobody doubts that the changes can be ascribed to King Abdullah, who recently celebrated the second anniversary of his ascension to the throne. As Crown Prince under his predecessor, the late King Fahd, King Abdullah was one of the driving forces for reform. Today, he finds himself the nation’s economic steward at a time of unprece- dented wealth for this country of 25 million. GDP has almost doubled to $350 billion since 2002, with growth last year alone some 10%. Oil revenues last year were just shy of $200 billion while the current account surplus reached an unprecedented $100 billion, a level most observers believe will be exceeded in 2007. King Abdullah is using every opportunity to secure long-term prosperity for a population that is not only one of the fastest-growing in the region (ris- ing at almost 3% a year) but which has high levels of expectation, thanks to oil, world-class education and, still today, the widespread belief that the state will always provide. “King Abdullah is looking at every infrastruc- ture project, every type of diversification. If there is benefit for the people he will never say no,” says Marwan Nusair, President and COO of the Alujain Corp., a joint-stock company specializing in invest- ment in Saudi hydrocarbon and mineral projects. “The means to support this development is avail- able now and he is using it wisely.” Directory: file -> view view -> Western Europe after wwii view -> Author study: paul fleischman view -> Qpa1 7ela study Guide view -> Arctic Oil/Gas Neg view -> November 1970 Approximately 150,000-500,000 deaths Bhola Cyclone Bangladesh view -> Grade Level: 6 Unit of Study: Caribbean glce view -> Citation: Duffield, Katy view -> Table of Contents Lesson # view -> Chinese Wind Energy Disad Download 9.54 Mb. Share with your friends:
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