The Coming fall of the House of Saud

Back in 2002, I wrote a piece for the web entitled, "What Happens When,
not if, The House of Saud Falls".
http://home.entouch.net/dmd/saud.htm

Events this month are beginning to fulfill what I noted in 2002.
"...unless things change dramatically in Saudi Arabia, it is hard to see
how a change of government isn't in the cards. Thus, sometime over the
next few years, expect a major change in the desert kingdom and expect
to pay for it at the gasoline pump. "

Things are rather bleak from what I can see. Take a look at what happens
when 11% of the world's oil is shut off during the revolution.

There have been three terrorist attacks aimed at western oil men. Last
year terrorists entered a compound in Ryadh and killed foreigners
(mostly Arabs, but none the less it chilled the expats). Then there was
the terrorist attack in Yanbu early this month which killed several
western workers and which was accomplished by workers allowed onto the
site. Last week's attack in Khobar which killed 22 in which the
attackers got away bodes poorly for both the oil markets, our
relationship with the Islamic world and the future of the economy.
While I have been more concerned about the natural decline of the Saudi
fields, one should also be concerned about a revolution in Saudi Arabia
which could cut off 11% of the world's oil supply overnight. Such a
disastrous event would make it very difficult to find oil in gasoline
stations and would probably bring on rationing.

The effect of these two attacks is to make the western expats who are
lynchpins of the Saudi production think seriously about leaving the
country. No wife wants her husband in this kind of danger and while life
in Saudi Arabia has always been bad for expats, it has gotten worse with
everyone having to stay inside the compounds. No longer are there trips
to the restaurants and stores. An oil expat gets paid really good money
but no amount of that is worth your life.

The impact for the Saudi government will be severe. The Singapore
Strait Times, wrote:

"
EDITORIAL
Live and let die
IT IS difficult to understand whether Saudi Arabia's leaders discern the
severity of the terrorist threat to their system. While commandos
managed to drive Al-Qaeda militants from an expatriate housing complex
in Khobar, ending a shooting and hostage-taking spree that left mostly
foreigners dead, the meaning of this latest outrage might not have sunk
into all the kingdom's officials. In Washington, a spokesman for the
Saudi Embassy recognised correctly enough that the attackers intended to
cripple the Saudi and world economy. But he reportedly said as well that
it did not take much to enter a building with a rifle and shoot people,
apparently comparing the attack to a drive-by shooting. Not quite so.
Unlike a drive-by shooting, whose target is local and whose unintended
victims may be bystanders, the Khobar attack is part of a meticulously
planned and executed terrorist operation whose ultimate target is the
Saudi system itself. "
http://straitstimes.asia1.com.sg/commentary/story/0,4386,253919,00.html

This is too true. Without the western expertise the Saudi economy will
collapse. Without the oil money, food, which must be imported, will not
arrive. Much energy must be expended to produce water for the 24
million people who live in Saudi Arabia. The desert won't naturally
yield that much fresh water. Should a revolution occur and the water
get cut off, look for massive deaths within a couple of weeks simply
from lack of water. No longer do the Saudi's know where to find water in
the desert. That is what their grandfathers did. 100% of Saudi
electricity comes from oil and it is used to irrigate the very small
amount of land (1.72%) which is actually involved in agriculture. No
oil, no electricity, no water, no food. We may live to see a revolution
in which in a very short time, millions of people die because the
electricity is off. The Islamic terrorists won't mind--they go to
heaven.

And consider the plight of the Asian foreigners, most of whom live in
semi-slavery with their master's having their passports making them
unable to leave the country. The terrorists in this latest attack seem
to have struck at them also. They actually may outnumber Saudi's and so
if push comes to shove, they may be forced to fight back for their
lives.

But consider our position in the west. With a sudden shortage of oil, I
am reminded of a report today about what the Chinese were doing. They
have studied our military victory in Iraq because they believe that we
may meet them on the battle field either over Taiwan or over oil. Fun,
huh?

With a sudden shut off of 11% of world oil, we would have absolutely no
time to react to events. There would be no time to build solar, nuclear
or wind farms. Suddenly it would cost a gazillion times more to build
those things because energy would be so expensive. Just to let people
know, a 1% increase in oil supply will send oil to $10 per barrel and a
1% decrease sends it above $40.

In the West, without oil, we won't get those grapes from Chile in the
winter. And those farmers will go belly up. Without oil, our just in
time economy, an economy based upon globalization and the concept that
transportation is essentially free, will no longer have the goods just
in time. Back in 2000, when the strike cut off the oil refineries in
the UK caused chicken farms to be on the brink of killing all the
chickens within only 2 weeks. Why? Because in that just in time
economy, they couldn't get petrol to the trucks to bring the chicken
feed to the chickens. The same thing goes on today in the US with many
of our factor farm operations. I was speaking with a grocery store
manager who is in choir with me at my church. He told me that if you
measure the value of a grocery store inventory by dollars, there are
about 3 months worth of sales in the warehouses. But if you measure it
by actual food, you find that there is only about a week's worth of food
stored away unless you think you can live on things like marichino[sic?]
cherries and tabasco. Without transportation we could find our selves
short of bread and other staples. Without 11% of the oil, there will
be 2% less electricity. It is possible that this will be enough to
cause electrical blackouts. We are really tight in the electricity
market--California is worried again about brown outs this
summer.Computers won't work so we won't be able to discuss the nuances
of the fall of the House of Saud. Water won't flow either. We will be
filling our bathtubs with water when it rains or when the electricity is
on.

Oh yeah, if 11% of the world's oil is cut off, we will have a really
hard time going to work. I have a 5 mile bike ride but others here in
Houston have a 30-40 mile ride ahead of them. And those of us who work
to find oil will not be able to do it because we run off of electricity,
interpreting our seismic data via computer not paper as it used to be
and our seismic crews use, yes, oil. I don't think the serious threat
has sunk into the conciousness of the political leaders.

After the revolution, if the world wants to get the oil back online, it
will mean doing things which are currently considered war crimes to
ensure the supply. One simply can't let a population of islamic
terrorists disrupt the world's oil supply and we won't know who is and
isn't a terrorist. Bad ethical choices awaits the world. Someone on the
ASA list once asked me, I think it was Bob DeHaan, who will decide how
the oil is rationed to an oil hungry world. I recall responding that it
would be the guy with the biggest army. Today that is China.

Maybe we christians should study how our grandfathers reacted to the
great depression.

The one sure thing in all this is that the price of oil is going up.
Even if it isn't due to a shortage of supply the fall of the House of
Saud will seriously cut the world's oil supply. One can see that fall
just around the corner, metaphorically speaking.
Received on Tue Jun 1 01:14:09 2004