Saudi Arabia Shale Investing

Jeff Siegel

Written By Jeff Siegel

Posted April 10, 2013

My father used to tell me I could be anything I want to be, as long as I worked hard. But he was wrong.

I’m not saying I didn’t appreciate his enthusiastic effort to motivate me. In fact, the illusion that I could accomplish great things in life always provided me with the extra push I needed.

After all, as a scrawny kid who was often picked last in gym class and rarely pulled a grade point average higher than 2.5 throughout my high school career, I needed all the encouragement I could get.

And I definitely wasted valuable time in my teens, skipping school, sneaking out at night to drink stolen wine coolers and Jack Daniels miniatures with the other delinquents in the neighborhood. But no matter how much I screwed up, my folks never let me forget that in this country, if you’re willing to put in the work and stay disciplined, you can do anything.

Well, I took their advice…

You Can’t Always Get What You Want

Following high school, I cleaned up my act, went to a community college, and then transferred to a four-year institution after proving that I was, in fact, capable of earning a 4.0 when I wasn’t causing trouble and decomposing in front of the idiot box.

Yet, even with all the hard work I put in, I was never able to be the one thing I had always wanted to be: a time traveler. I know, it sounds ridiculous. And certainly I never really thought I could travel through time. But if you were to ask me today what the one thing I’d like to do in life is, it would be to go back in time.

Of course, this is not possible. And even if it were, it’s highly unlikely a guy like me would ever be able to figure it out.

The point is sometimes, no matter how much you want something, you’re not always going to be able to get it — even if, in theory, it is possible.

Saudi Arabia is about to get a taste of this harsh reality.

It’s Over!

Saudi Arabia wants to continue its reign as the largest oil producer in OPEC. And make no mistake about it; the arid desert kingdom will do everything it can to retain this position.

But no matter how hard they try, it’s just not going to happen.

You see, the harsh truth is Saudi Arabia is running out of oil. In less than 20 years, Saudi Arabia could actually become a net importer of black gold. And this is why Saudi officials have been tripping over themselves in an effort to secure new energy sources.

You already know the Saudis have 40 gigawatts of solar planned, along with 60 new nuclear reactors. But it’s not going to be enough to keep the lights on and the exports flowing…

So now the Saudis are going to attempt to follow in the footsteps of the North American shale revolution.

Someone told them that they could continue to be a significant player in the oil game well into this century by tapping their vast shale reserves. And certainly that has provided a lot of motivation and encouragement.

But no matter how hard they try, their dominance in the oil game is still quickly coming to an end.

Hope Doesn’t Cut It

Last week a writer for the Gulf Business news wrote that Saudi Arabia has the reserves, the desire, and the potential to become a shale giant.

Unfortunately, that’s not going to be enough.

Here’s the bottom line: Oil and gas demand is expected to double in Saudi Arabia by 2030. So now Saudi Aramco is working overtime to unearth new resources. And they’re hoping to find these resources in shale.

The state-owned oil giant is expected to drill seven shale gas test wells this year. That’s barely an accounting error compared to what’s going on in the United States. But to be honest, I can’t imagine the Saudis even have the ability to do much more than that, anyway. After all, we’re talking about a desert.

In the United States, where water is still much more abundant than in Saudi Arabia, the annual water requirement for frackers is between 70 billion and 140 billion gallons.

The Saudis don’t have that much water to spare for energy production. And apparently, even if they can use new nuclear and solar power plants to power a new fleet of desalination plants, it still wouldn’t be able to produce the required volumes of water for serious fracking operations…

No, my friends. Saudi Arabia has about as much of a chance hitting pay dirt on its fracking dreams as I do going back in time to buy shares of Apple (NASDAQ: AAPL) at $3.00 a pop. It’s just not going to happen.

Fortunately, the eventual demise of the Saudi oil machine is actually going to serve as an enormous opportunity for a handful of American oil and gas producers that are in line to take over where the Saudis leave off…

And tomorrow morning, I’m going to send you an email that’ll include all the juicy details on these companies — so you can stake your claim now.

Because that, my friends, is how we’re going to get rich off the end of Saudi oil.

To a new way of life and a new generation of wealth…

Jeff Siegel Signature

Jeff Siegel

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Jeff is the founder and managing editor of Green Chip Stocks. For more on Jeff, go to his editor’s page.

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