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This does not match any of the Saudi press statements on the oil situation. The Saudi position and their motivations have been consistent for months with thousands of articles documenting this. In summary, publicly, they are not reducing oil output because in the previous oil crisis, they cut production and suffered heavily vs those who did not. The private reason they are still pumping is that they intend to bankrupt/destroy the US Shale industry. They've done an excellent job at this. These articles with inside information never mention "climate change" or "renewables" as the reason for the situation.

Unless you can show sources showing the price change is because of climate change, this just a delusional conspiracy theory.

Why would you assume a market actor is being straightforward about their strategy, especially if others being aware of this strategy would put them at a disadvantage? Deception is a competitive strategy!

I never made this assumption.

Hence the "call me crazy" :)

However, I feel like all the chatter about Saudi behavior is short term (<5 years). Where are the articles discussing the 10-30 year outlook? It just seems like the oil industry is blissfully ignoring the whole "stranded assets" problem and focusing on short term strategy.

There are few articles on the 10-30 year outlook because it's been discussed so many times (see peak oil). No one wants to read old news. Anyway, one of the biggest flaws in your theory is how humanity will ween off oil, given the growth of renewables/electric cars. Oil is a finite resource. If there is a non-zero need for it, people will consume it and dip into this finite pool. As the pool depletes, prices will increase. So currently, what is oil used for, and do we expect to use oil in the future?

There are numerous critical uses for oil. Oil derivatives are used to fertilize most of the food on the planet. Oil derivatives used to make almost all clothes sold today. Oil derivatives are used to make tires, shampoo, paint, soap, toothpaste, rubber, glasses, and 10s of thousands of other products. Many industrial solvents, essential for 20th century goods, are oil derivatives https://en.wikipedia.org/wiki/Petrochemical . Here is a partial list of products made from petroleum http://www.ranken-energy.com/products%20from%20petroleum.htm . There are just so many uses for oil. Oil is critical for modern American life. Many experts expect oil based products to be used by humanity for the next thousand years.

Unless there is a drastic change in how oil is produced, petroleum will be consumed until all cost-effective reserves are depleted. The assumption the world "will only pull up half of what it already has in reserves"(!!) is naive.

Of course, oil is used for many other things, but a whopping 85% of oil is burned[1]. What happens when that 85% decreases? Grow plastic and fertilizer production by 6x to make up for it? As far as growth rate of alternatives, it's a classic underestimation of how exponential growth and disruptive technologies work. New stuff always gets here faster than the incumbents expect.

Have any links to those 10-30 year outlooks from the past few years?

[1]: http://www.eia.gov/energyexplained/index.cfm?page=oil_home

You should already have those links, because in your grandparent post you're arguing Saudi Arabia's motivations are based on climate change(?) and how we are only going to use "half of our current oil reserves"(?). Those are 10-30 year assumptions, which you can easily source online. You never explain how these are in touch with reality. Until you can justify both you come off as a conspiracy theorist.

> You should already have those links, because in your grandparent post you're arguing...

Hmm, can't seem to find any. My opinions are mostly speculation, and I'm happy to be proven wrong as long as I learn something. Care to help me out with some links so I can read and learn?

Aren't those other uses locking up the carbon though?

In the end, these products end up thrown in a landfill or dumped in the environment. Over time, bacteria decompose them and convert some back to carbon dioxide.

It's better to keep the oil in the ground rather than temporarily store it in some petroleum derivative.

> to cap climate change at 3 degrees (2 degrees isn't even feasible)[1][2]

Your [1] just means that to get under 2C we'll leave much of the currently known reserves unburned, which is feasible.

Mostly it is KSA vs Iran/Russia. To some extent, this also kills shale and other alternative oil from North America, but Iran is their main political/military/religious rival in the region, and cheap oil ruins them -- eliminating competition from the US and Canada is just a commercial thing.

It's not really eliminating competition though. The wells are already tapped in the US. They'll just shut them down until it's profitable again, and then start them back up. They've already made the initial investment, now they just have to wait it out.

Missing the lead time aspect.

There's no point in capping tight / shale oil, the production decline half life is only a couple months. The last wells drilled before the price drop are rapidly declining to zilch now. Its a treadmill and you must keep drilling. If you want production in say two years, you start planning the new wells now. We stopped awhile ago. In a very long term sense you're correct, but in a short term sense shale is dead-ish till maybe 2018 even if the Saudis hike the price today. If you're looking for scams and propaganda, in shale they all live in cornucopian fantasy projections of decline rates vs actual historical decline rates, and never the two shall meet. Sure if the decline half life of a shale well was 40 years instead of 4 months, America would be energy independent, yeah. Generally for reports and analysis of shale, the further from geological reports the more comedic and disconnected from reality.

Oil sands aka Canada get killed off a different way. Its very expensive and the extensive financial structuring required to buy all the loot to produce is crazy. The Saudis basically make an example by saying as long as they're the swing producer, they decide when and how badly Canadian oil sands will go bankrupt. Who will run out of cash first, you as a sands producer, or the Saudi Royal Family? There's some talk oil sands have never made a profit and never will, when everythings accounted for, especially predictable Saudi price manipulation. And talk that the EROEI ratio is less than one. Most of it is just talk. But the facts based on that talk are correct that its very marginal, right on the border of being a real energy source like traditional oil or merely a jobs program / bubble scheme like ethanol was. Anyway the leadtime point is its hard to raise money to resurrect a bankrupt financial ecosystem. There are two strategies. One is wait for the Saudis to collapse and no longer be swing producers while hoping the world economy holds together till other sources come on line, the other other is some kind of nationalization of the sands / job program where you can "in your face" to the Saudis that Canada is going to produce half a million barrels a day no matter what the price is manipulated to. Both are kind of unappealing in their own way.

I can't think of why else they would drive down price? (I mean this in the non-rhetorical sense... I'm genuinely curious and haven't read a convincing explanation)

They need the money. Why would it be more complicated than that?

But they get the money by having a much higher oil price. Saudi needs oil to be $106 a barrel to balance it's budget, up from in the $50s in 2010. You can't pump your way to profit, that's why OPEC operated as a cartel, though recently that seems to have gone out the window.

Saudi pumping the amount it does drives down the price of oil. They have massive amounts of money so can last for a few years running the kind of deficits are now, though not forever. The question is why they are keeping the price artificially low.

Do they? Please provide source...

Expensive war (or military operations whatever you want to call it) in Yemen, plus falling oil price means KSA have issued bonds for the first time in a long time :

http://www.wsj.com/articles/saudi-arabia-issues-bonds-worth-...

So yes, they somehow need some cash.

What source would you want? Everybody needs money even if they have enough. Please stop this "provide source" movement for obvious things.

http://m.csmonitor.com/World/Global-News/2015/1023/Saudi-Ara...

If Saudi Arabia keeps up their "fire sale" there is little chance we will reach peak carbon in 2020.