Saudi Arabia Approves New Sovereign Wealth Fund: Another Nail in the Coffin of the Fossil Fuel Age (Ian Walker)

The following post was submitted by Ian Walker

Hi all,

As many of you may have noted for some years I have placed market reactions of major players as the key method of establishing LENR’s authenticity.

The thesis is that if LENR is real then those with the deepest pockets will know first and react first. So one looks at what they DO, not what they SAY.

Accordingly I started with idea that major companies with their vast corporate intelligence capabilities would react first, so big oil would be likely to sell off their oil fields as they would inevitably become stranded assets.

Major companies with known LENR interest like Shell, BP, Siemens, Toyota, Mitsubishi, ST Micro Electronics, the banks, the Old Money Trust Funds, would all move out of businesses that would be affected and shift money in to liquid sources to be ready to take advantage. Energy companies would sell off their assets and move to leasing. Green assets would be sold off. Car companies would gear up for Hybrid and Electric car production. Banks would short fossil fuels. Old money sell up their fossil fuel assets. Companies would be very reluctant to invest in Nuclear or even coal and Gas.

That is what happened.

Today another nail in the coffin of Fossil Fuel Age was hammered Home
http://www.bbc.co.uk/news/world-middle-east-36131391

Look at what they are doing not what they are saying!

Kind Regards walker

  • Bernie Koppenhofer

    This is like Goldman Sachs recommending mortgage backed bonds in 2007.

  • Omega Z

    Human labor is actually a commodity.

  • builditnow

    HAVE THE SUPER HEAVYWEIGHTS ENTERED THE LENR FIELD?
    How about 1 trillion investment in LENR, disguised as solar. Anyone suspect that India, who is fully aware of LENR with at least meetings at the highest level, and France who now desperately wants to get out of fission reactors, would really be putting 1 trillion into solar ???
    Why, what on earth for?
    I think it a front covering up an investment in LENR.
    Similarly with Gate’s 1 Billion “renewable energy” initiative.

    “India, France launch $1 trillion potential solar programme for developing countries”
    http://timesofindia.indiatimes.com/india/India-France-launch-1-trillion-potential-solar-programme-for-developing-countries/articleshow/51959457.cms

    • Omega Z

      $1 trillion.
      That’s a lot of carbon taxes.

  • psi2u2

    Very good question. First, I think the internet has disproven the classical economics theory that money and work are inevitably connected. Healthy and happy people do not lack incentive and ambition even if they are not being paid to express them. Look at Wikipedia as a key example. Second, its not that work and money would cease to exist, but that money above and beyond that needed to survive at a reasonable minimum level would still be the benefit of work.

    This is of course only a very general and preliminary answer to a very good question.

  • http://sifferkoll.se Sifferkoll®

    Another interesting piece in the puzzle. Guess who is buying expensive and possibly worthless oil assets right now…. You are (ie. the big pension funds) …!

    http://www.zerohedge.com/news/2016-04-26/who-ravenous-buyer-all-those-energy-stocks-here-surprising-answer

    • http://www.chatwing.com/eestorchat EEStorFanFibb

      oh crap. that ain’t good.

    • Omega Z

      Oil assets are on the cheap do to the oil glut. This will pay off long before LENR has an impact. I guarantee that if there is any oil left that’s economically viable, they will still be pumping oil 100 years from now.

      • http://sifferkoll.se Sifferkoll®

        Cheap or not depends on which oilprice you expect in the future. If you expect $80, then yes. If you expect $30 (or lower), then certainly not.

        • Omega Z

          Clarifying assets as stock values that are pretty much at rock bottom already.

    • builditnow

      Correct, the same for oil drilling companies. I reviewed the stock ownership records of Schlumberger Limited (SLB) http://finance.yahoo.com/q?s=slb&ql=1

      During late 2013 and early 2014, all the upper management sold off their shares, while the prices were high and by the middle of 2014 they owned very little.

      The major investors in SLB are now …. pension funds and mutual funds.
      All public record.
      There is little question that the average Joe is going to pay the price yet again when the average Joe is informed of LENR.

  • psi2u2

    Or we stop treating “work” as the precondition for life or access to life’s essentials.

  • psi2u2

    Great post, Walker! Thank you (and Sifferkol) for all your hard work keeping us informed about these developments.

  • http://sifferkoll.se Sifferkoll®

    In a LENR future there will be no commodity assets, because most commodities are a derivative of energy (excl. some status symbols like jewelry or prime real estate, etc). So, gov’s dependent on other assets than taxpayer loyalty/control will have a problem. I do not see loyalty rising anywhere, but the control machine is furiously enhanced …

    http://www.sifferkoll.se/sifferkoll/den-svarta-svanen/
    http://www.sifferkoll.se/sifferkoll/wp-content/uploads/2015/06/blackswanascending.pdf

    • builditnow

      Initially raw materials will be in intense demand. Now is the time to buy into aluminum (bauxite) mining (because it likely replaces iron for many uses, it’s price is mainly energy related and it has a weight advantage) or other raw materials. Later, spaceX will be mining the asteroid belt, to, raw material prices could drop as well.

      Other materials made of carbon, think carbon fiber but much stronger could replace aluminum and steel.

      In the longer term, Sifferkoll could be right.
      Also, don’t forget the robots, the time could be coming when we humans have to value ourselves with other than “work”. The issues of “wealth distribution” are already on the table and will be much more intense.
      Later, don’t forget the singularity … will “we” matter …

  • bachcole

    “Nail in the coffin” sounds causative. I think that it is more symptomatic.

  • Omega Z

    Ian,

    The Saudi’s have been moving in this direction for a long time. It has nothing to do with LENR. They have been gradually deporting imigrant workers and replacing them with their own people to create a diversified non oil dependent economy. Their Oil reserves will be depleted. This is not an if but when.

    With a 40 year at 7.5 million barrels a day reserve, every year that passes shortens that time span. As daily production increases, that time span shortens even more. They are presently pumping 10/11 million barrels a day. 40 years becomes 30 years. Additional production will become 20 years reserves.

    As I said, they’ve been moving this direction for sometime. However, at $100+ a barrel prices and flush with Oil cash, it’s hard to move your population into the work force. They ask why when they have a nice monthly stipend.

    I imagine the Saudi’s are using the current low oil prices to their advantage. Money is drying up. You need to work for a living. Their people know the money is drying up and stipends becoming smaller.

    When a nation like the Saudi’s with some of the cheapest energy in the world are laying plans to build 50 to 60 Gigawatts of wind and solar energy production in the next 15 years, you should take note.

    Wind & Solar being even more expensive fir the Saudi’s given the environment that is extremely harsh on both technologies will suffer a shortened life span by at least 25%.

    They see the end of oil as in depleted within a couple decades.

    • doug marker

      Omega Z – ” It has nothing to do with LENR.”

      Be careful, this is an ‘opinion’ vs a proven ‘fact’. It may well be right but there are good reasons to believe this could also be wrong.

      One valid question to be asked is if Saudi money has been used in investigating technologies that would *accelerate* the demise of oil as a *primary* source of income. No one could or should dispute that oil will have uses beyond fueling cars, and will do so for a very long time (such as plastics etc).

      There is unlikely to be *any* sudden collapse in oil as a commodity, but, there is likely to be a shift in its primary value and primary use.

      Cheers

      Doug Marker

      • Omega Z

        Not all opinion. It’s mostly fact. The Saudi’s strategy was already in the works before Rossi entered the scene.

        The frame work was roughed out around 2008 to sell portions of Aramco. The 1st sale will be for 5% of Aramco. More to follow later. That frame work also includes the near total elimination of Oil exports around 2030-2035. The timeline was left flexible so as to minimize civil unrest issues such as happened with the Arab spring.

        As to whether the Saudi’s are aware of LENR. They are and they are also very aware of Rossi. Roger Green who was and may still be a Rossi licensee to a smaller degree had sub-license agreements with some Saudi’s. I would be surprised if they aren’t still financial involved with Leonardo directly or indirectly.

        That said, a transition is going to take much longer then many may think. It will be years before transportation(Oil) is seriously impacted by LENR. By that time the Saudi’s reserves will be nearing depletion. U.S. Oil production will begin to irreversibly decline around 2025.

        The real question is will LENR transportation arrive in time.

    • http://www.health-answers.co.uk Agaricus

      No matter what they plan to move into as an alternative to oil, the Saudis are unlikely to be able to generate a fraction of the income generated by unrefined oil sales. If CF becomes commonplace they have no particular geographic or other advantage over the rest of the world and their large financial reserves will make little difference. They have no noticeable manufacturing base and feeble agriculture, and the idea of creating either in three and a half years (2020 plan) is laughable. Even the idea of selling solar energy to Europe via interconnectors (this has been mooted) would be stillborn even if CF doesn’t materialise, as the ‘renewable’ base elsewhere rapidly becomes sufficient to meet all local electricity needs.

      IMHO their only hope would be to quickly build the infrastructure necessary to make oil based products – mainly fuels, organic chemicals and plastics – and sell these ‘value added’ commodities while starving overseas producers of their feedstock (crude oil). But of course they’d still be oil-dependent, and in any case the Western powers would just go to Iran, while simultaneously working to provoke insurrection and war in order to bring the ‘house of Sa’ud’ down.

      It seems more likely that all fully dependent ‘oil states’ will simply decline back to ‘third world’ status, some faster than others, as they have nothing else to trade. It won’t affect their rulers of course, who will simply abscond with a good part of their nation’s money at some opportune moment, leaving their populations to their fate.

  • Roland

    Against a background of 40 years of ‘policy announcements’ heralding a more diversified Saudi economy the latest pronouncement is most likely to yield the same results as the previous ones; no discernible change.

    I think, for all the reasons given in support, that Ian Walker’s central thesis is a sound assessment of the impact of the reality of LENR on carbon based energy businesses and investment patterns.

    The Saudis, and similarly positioned nations, are grasping at straws with schemes like selling off ARAMCO to build a giant investment fund to fill their very substantial tax revenue gap.

    Among other things even if the Saudi’s succeed in raising vast capital resources for investment purposes this will only provide direct employment for a very small group of soon to be wealthy insiders with little impact on the already wide spread unemployment amongst the general populace without ever adequately replacing oil revenues.

    Much the same pattern is evident in all the third world OPEC members, and I would include Russia in this group, who have always known that the oil would run out at some point regardless of current considerations. The recognition that diversification away from oil is an essential aspect of the long term survival of these economies has utterly failed to translate into meaningful action.

    Some might advance the theorem that pressing necessity will spur the needed changes; looking to the example of Venezuela or Libya a decent into economic collapse and anarchy can’t be ruled out and, in fact, seems a more likely outcome.

  • SG

    Very insightful indeed, and I’m pretty amazed as the whole thing unfolds on a world wide scale. We live in unbelievably interesting times.

    I see a hidden upside to all of this. Once the old oil guard and banks have offloaded all of their exposure to pension funds and governments (taxpayers), they will no longer have an incentive to block LENR. And the pension funds and taxpayers don’t have the sophistication or organization to block LENR, or the stomach, given that it represents a potential clean energy revolution. So, in the end, the pensioners and taxpayers will pay a heavy price financially as the pension-owned and government-owned oil/coal/renewables drop like a rock. But in exchange, we get a new era of abundance and LENR based economy.

    • Omega Z

      Unrealized by most, The vast majority of these energy companies are owned by the general population by way of pensions and personal investment funds. It is the rich and influential who merely direct the path.

      The common folk have the vast majority of the wealth(Around 90%). It’s not realized because that wealth is distributed among such a large number of people. Which for the average person amounts to more or less, Peanuts. A Million$ is a fair chunk of change. Divided among 1000 people, it’s a $1000 each. Nothing to write home about.

      Pensions, 401K’s and the rest are handled by investment managers. Likely, a portion of your pension is invested(diversified) in every major energy firm as well as non energy corporations.

      Everyone complains about the energy companies(Including myself). Few realize how much they (Greatly) benefit from them because it is so seamlessly integrated and economically implemented.

      Get in my horse drawn wagon and I’ll take you to your destination 30 miles from here. It will take about 10 hours and I require $10 an hour. OR, Get in your car and be there in 30 minutes at $3 for gas.

      Because of these fossils, we enjoy modern medical facilities and medicine, modern schools, heated and cooled homes by flipping a switch and so much more. Without them, we would revert to the stone age and an average lifespan of 40 years of age. Note with 7 billion people, we would soon not even have fire wood.

      It’s obvious that when it’s time to dismantle the stranded assets, it will fall to those who so benefited from them(Everyone). It ‘s also easy to claim the number of people negatively impacted from fossil fuels. You also need to take into account how many people are alive because of them. It’s all about trade offs. You wouldn’t like a world without them. People need to have a more balanced view…

      • doug marker

        Omega Z wrote “The vast majority of these energy companies are owned by the general population by way of pensions and personal investment funds.”

        – any links that support this premise ?.

        One might ask if this is this a truly global view or perhaps applicable more to the US / UK ?. I sincerely doubt it is a global reality esp in China & India. China’s economy is not to be sneezed at and one might really doubt that 90% of Chinese citizens own their energy companies.

        he world is bigger than just the US.

        Cheers Doug Marker

        • Omega Z

          “any links that support this premise”

          Did you see the turmoil with the California teacher pension fund when BP had their Gulf fiasco. That was 1 of many pension funds that took a beaten.

          China, They have publicly trade stocks just like the U.S. Millions have lost their life savings in the last year. Millions more had borrowed money to invest and are upside down.

          Unless it’s solely Government owned and not publicly traded, they have some ownership in it. If you depend on Government handout or pensions funded by those resources, then you’ll be effected just as if you had stock in them.

          You also don’t need to be directly invested in Fossil energy companies. If you own stock in heavy equipment manufacturing, Those stocks are effected when those sales decline(Oil, Gas, Coal). If you’re invested in a steel company that supplies pipe for drilling and pipelines, your effected. Or the chemical companies and many others. It’s all interrelated.

      • SG

        Well, now that most oil companies have sold off their oil fields to governments and leased them back, it really will be the governments (i.e., the people) holding the bag. In the end, the people will feel both the downside and the upside of LENR.

        • Omega Z

          Oil companies own very little of the oil they “produce” outright. Less then 5%. 10% in their heydays.

          A lease can be purchased by auction from Governments or purchased from land owners who retain their mineral rights. The Government or entity who sell these rights then receives 15% of all gross mineral (Oil, Gas, Coal etc) sales. Even if the Corporation loses money.

          Government’s sell leases at auction. They don’t by them back unless they for some reason rescind the sale to prevent drilling. I’m not aware of any such rescission’s.

          Oil companies have sold off some of their long term(20 years out) leases to other Oilco’s, banks or investors. They have not sold them all off.

          Shell Oil purchased a less many years ago from the Government off the coast of Alaska. 6 Billion$ latter in exploratory wells and they found nothing worth bothering with. Zero return. No one wants to buy a worthless lease. Shell will merely let this lease lapse back to the Government. No money will change hands. Shell is just out 6 Billion$..

          Note Governments are out potential future royalties, but they are out nothing from their pocket. They paid nothing for the land or water and the mineral rights. And Ultimately, those minerals economically recoverable will be recovered eventually. If not this century, then the next. They have many other uses besides transportation and such.

  • Observer

    Fossil fuel production will match demand in order to keep the price profitable. The reduction in demand will create an increase in price since overhead will be spread over less sales.

    • Omega Z

      I fully agree.

      The only thing that will change is the size and value of the energy companies. Also, as these entities scale down in size, they will gradually consolidate and cannibalize the smaller entities with a net result of fewer, yet still large companies. Less anyone forgets, Fossils will still be used until they are economically depleted.. At that point, we will need to find replacement resources or the world will be in big trouble…

  • Anon2012_2014

    Fossil fuels are done in 40 years regardless. If LENR is commercially successful, it might be 15.

    Crude oil’s only use will be as a specialty chemical and for road surfacing. With greater plastic recycling the demand will be even lower.

    • NT

      Also, all those tires hitting those roads will still be needed until we are all flying…

      • SG

        And if the superconducting EM Drive or Cannae drive turn out to have thrust that fits with NASA’s current projected thrust for such devices, then we all may be flying sooner than we think. 😉

        • Mike Rion

          If there were as many flying machines as there are cars right no it would be mayhem. With not lanes or stop signs or anything else to direct traffic flow it would be disaster.

          • Omega Z

            Yes, Mike, I agree. Tho in reality, they will likely be much more expensive then a regular aircraft as they will require much more structure for traffic conditions.

            We don’t have flying cars because we lack LENR energy.
            Nope. That’s not it at all….

            When flying cars become available, one will drive to an airport, take off and fly to another airport. then drive to their destination.

          • Argon

            Like with air planes, they would have pre-assigned flight paths propably 4 or 8 possible direction (SWNE) Each direction in different altitude to minimize collisions. Autopilot would be must. But yes, it wold not look nice to see sky covered by rosty car bottoms whistling loud day and night…

        • NT

          The way our world is currently headed, we will be lucky to have Praire Schooners and Buckboard Wagons as transportation. LENR devices (e-cat-x) can help turn this around if we get them soon enough – before the countdown clock strikes midnight…

    • Mike Rion

      But what am I going to use in my classic cars for fuel?

      • Anon2012_2014

        You will go to the hobbyist filling station in your area, maybe 10x further than the filling station where you get gasoline now, and you will pay a specialty chemical price for your antique fuel.

        If AGW is fully accepted, I expect that you will actually need a hobbyist permit to fuel your antique vehicle, as the government will actively restrict people from running carbon fuels in cars >20 years old (i.e. junkers) when the non-carbon alternatives are cheaper and have longer range than what we have _now_ for gasoline vehicles (i.e. less than $0.06/miles, range >350 miles). I expect that the government will actively restrict carbon producing energy price arbitrage as the petroleum producers/exporters attempt to sell gasoline for much less than what it cost nows because no one wants it.

        • Mike Rion

          Only if the “greenies” succeed in getting a toehold in our government (America) god forbid. Anyway, sounds like a great opportunity for black market profiteering. Anyone know how to contact the Mexican cartels, to set up a supply line?

      • Omega Z

        Use an E-cat boiler for your still. 🙂
        Guarantee you’ll be a happy camper. At least until the morning hanger hits.

      • Argon

        During the transition from pure oil to new energy era, you could use renewable at the same price. At least if you live in California.
        http://www.biofuelsdigest.com/bdigest/2015/03/18/propel-debuts-cost-competitive-renewable-diesel-in-california/

        These next gen renewables can be made from waste, biomass and so on (collected from bakeries, food industry etc). so no worsening world food problem. These will not be able to fully replace vanishing oil reserves, so other things are needed like EV:s etc.

        At the time if LENR becomes commercially viable, replacing oil based products , like plastics, would be matter of pretty well known chemistry – energy needed for those processes has been the problem, not the process itself. So cheap LENR energy would be missing piece on that also.