1) Diversify their economy
2) Build up enough sovereign wealth to maintain their citizens standard of living after the oil has run out.
The first is very hard, because huge percentages of their population are completely disengaged from the economy. It's estimated that 30-40% of working age adults neither have a job, nor are looking for one. An unusually high percentage of those who have jobs work for the government, and somewhere close to 90% of non-oil jobs are held by foreigners. There is immense social and economic pressure against citizens of KSA getting private sector jobs. The biggest "employer" in the country is the yearly hajj pilgrimage, which isn't a lot.
The latter is incredibly hard because of the former. That 30-40% of the population that don't have jobs need to be fed, or they'll eventually revolt. And all of those government jobs cost a huge amount of money. And the fact that the citizens of KSA neither want jobs (apparently) and aren't properly trained for a lot of those jobs makes reducing the social services bill very, very hard.
If they can outrun the de-carbonization of the world, KSA will do okay. Maybe not as good as it was during the peak (if you were one of the few getting the benefits), but not terrible. If they don't outrun de-carbonization .... well, then I would recommend not being there when whatever happens, happens.
The system though ultimately is designed to ensure wealth flows upwards to the top, not to actually build a capitalist economy with a guaranteed minimum living standard.
Perceived cultural differences, possibly leading to more interesting, uncomfortable parallels than many would like. On the ground in the kingdom, in the field, there is an enormous cultural bias towards status, and low-status jobs are shunned. This is made more complex because of a subtle, more recent cultural bias that emerged from having foreigners perform almost all the work for so long, and foreigners in Wahhabi faith as it is practically practiced (in theory it is different) are considered inferior in an unenlightened sense. A halo effect emerged around private jobs, and now any job at all that used to be performed by foreigners is considered low(er) status.
This is changing rapidly and gaining steam in numbers at the margins with many younger generations. I've met some incredibly brilliant, young KSA native engineers. Many are working hard to reverse the rot the Resource Curse visited upon the kingdom.
However, I wouldn't be so quick to dismiss that kingdom's experience as unique to it, saying that does not apply to America or many other developed nations. Considering the penchant for superficial solutions, get-rich-quick adulation, and de facto class stratifications in all developed nations, I'm not sanguine a UBI would elicit much better results than a Resource Curse. Norway is an exception that proves the rule, from what I've seen so far.
And I wouldn't point fingers at just nations, either. Even here on HN, where startups with fast 10-1,000X liquidity events receive gallons of ink compared to the inkjet droplets miserly begrudged to to self-funding, slow organic growth companies, we engage in similar dynamics.
Making someone or a nation fabulously wealthy and/or powerful doesn't change them, it only discloses their true character and moral fiber. The uncomfortable truth is a substantial portion of us, whether at the individual or nation-state level, when granted free reign with no one saying "No", are jerks. IMHO UBI is like pure communism or pure capitalism: they only sustainably and consistently work if the vast majority (I'd personally guess around 95%) are truly not jerks, and thus have the means to keep the levers of power away from those who are.
BTW, I'm one of those jerks. Maybe not the biggest douche-canoe you've ever met, but I'm definitely a jerk, though I chip away at that.
What they need to do is stop pumping it, and soon, otherwise climate change will cook us all.
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Sure, but not nearly in as large of quantities.
If the value of saudi arabian oil plummets to 1/4th its value, then they are still screwed, even though "oil is still used as raw materials" and it has non-zero value.
Owning something that is almost worthless isn't really much better than owning something that is literally worthless.
First, most plastics are now made from natural gas, something KSA doesn’t produce a huge amount of. They’ve got decent reserves, but their production lags. Qatar produced 70% more LNG last year than KSA. LNG is also kind of a pain to transit by sea, which advantages countries that can produce natural gas closer to the factories (e.g. The United States and Russia, among others).
And second, plastic production consumes a relatively small part of the world petroleum production. Here in the US it’s estimated that about 2.7% of our yearly petroleum consumption. World wide only 4% of world petroleum went into plastics (2012 figure).
So even if plastics continue to be made of oil, plastic consumption remains constant, and there is no major shift in who produces the feedstocks for plastic (all wildly optimistic assumptions), then KSA can expect to keep about 2.7-4% of their current oil export budgets. That is catastrophic for a country like KSA, who needs all the oil money they can get.
Why would a poor country not purchase the cheaper option?
Can you think of a renewable source of energy that’s both attractive to poor and developing countries, and also practical?
Oil is easy. You put it in a tank, then pump it through an atomizer, and set it on fire. You can transport it easily, it works anywhere, and you can run a car on it. I know, electric cars are a thing, but not in the places I’m talking about here.
Electrical transmission across long distances, and, especially between different countries with different power grids is a nightmare.
What am I missing here?
Biomass puts CO2 back in the atmosphere, but at least it’s not increasing the total CO2 in the biosphere.
There's no need to pump it around, at all. You can transport it by truck. Growing up, my family had a fuel oil heater. We'd have the tank filled periodically, and that was all there was. Likewise, gas pumps are just storage tanks hooked up to pumps. There's practically nothing to it; it's all basically 19th century technology that's easy to build, and doesn't require any sophisticated engineering.
0 - https://www.desmogblog.com/sites/beta.desmogblog.com/files/n...
1 - https://theodora.com/pipelines/europe_oil_and_gas_pipelines_...
Similar to how much of the developed world skipped landline phones, and went straight to cellphones, because they didn't have to build as much connection infrastructure.
Wind and solar (the ones getting cheaper) need storage, not transmission.
So, the question is: is there the political will in the developed world to help the developing world bootstrap renewable energy? History suggests not, unfortunately, but I would love to be wrong on this.
Edit: I forgot to mention, as well: lithium batteries eventually lose capacity and need to be replaced. So, storage is essentially an ongoing maintenance cost in this scenario. Google tells me that the Megapack costs ~$300/kW, all in, so, add that to the cost of your renewable energy. [0] Once you do that, if you're thinking short term, fossil fuels start looking really, really good.
Not to mention that lithium is a limited resource, and the mining of lithium is absolutely terrible for the local environment.
Google also tells me that the Tesla Megapack comes with a 15 year "energy retention" warranty. [1] So, you need to make this investment every 15 years. And, unless the prices of batteries go way down per kWh, that can add up real quick.
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[0]: https://cleantechnica.com/2020/10/05/tesla-megapack-powerpac...
Additionally, these are today’s prices, as per this OP article the price for renewables is dropping exponentially every year. And if Elon Musk is to be believed (which I do) the price for storage is also dropping exponentially.
Given these trends it seems a no brainer that the developing world will skip fossil fuel entirely. Barring air travel, the entire worlds air and space travel will likely continue to use fossil fuels for the next decade or two.
[1] https://pv-magazine-usa.com/2019/09/10/los-angeles-commissio...
Hum? You buy some batteries and install them.
You don't need geographic stability, you don't need stable property rights, you don't need widespread law enforcement. One can even solve it one house at a time, at a (not much) larger price.
What kinds of problems do you expect developed countries to go help poor ones with?
Realistically - they'll get deported to their home countries. There's no government on earth that will tolerate a non-citizen, non-refugee as a public charge with no prospect of being productive in the future. Foreigners are politically convenient scape-goats for all that is wrong with {ECONOMY|JOBS|CRIME|SERVICE DELIVERY}, and politicians will politic.
The migrants will try to migrate somewhere else that has work.
I mean if you own a skyscraper in NY you're basically set for life. Multiple lives.
And that's how the situation in SF came to be. Lots of money wanting to be "saved" by tech.
[1] https://www.amazon.com/Technological-Revolutions-Financial-C...
Hell, I'm currently renting an apartment and I don't own shit now, let alone 20 years down the line.
Japanese homes have a lifespan of 30 years.
But in the UK people routinely buy houses/apartments on leasehold which means you only "own" it for e.g. 99 years (sometimes less). Crazy if you ask me, "normal" if you ask them.
Plastics, shipping fuels, many manufacturing processes use oil during manufacturing but perhaps not in the final product. Vehicles are still decades away from being replaced by EVs.
The technology is all there and there are some "quick wins" coming around the corner I think. Container shipping switching to nuclear would be a quick change once regulations are in place for one example.
This comment sent me looking, and I didn't see anyone making any kind of move towards installing a regulatory environment that is conducive towards a "quick win" for nuclear-powered container ships. This Flexport article [1] was interesting, but didn't mention any such legislative moves afoot. This article [2] lays some numbers down.
One way I can see to introduce and sustain nuclear-powered container vessels is to expand US naval shipyards that currently handle nuclear carrier and submarine construction to take on the container vessels' commissioning, refueling, maintenance, and decommissioning, design vessels with much longer service lifespans than current container ships to amortize the cost over a much longer period, standardize the power plants on existing designs, and carve out specially-secured multimodal ports with preferential rates for the nuclear-powered container vessels with much faster container moving infrastructure. In the US political-economic landscape, this would spread out the current military expenditures on the power plant R&D, manufacturing capex, and opex costs, into a wider market.
It would be an interesting geopolitical power play a nation, if the nation subsidized from taxpayer funds the regulatory compliance and national flagging expenses, to make a play to dominate and control the global container shipping service market. Nearly half of container ship opex costs are fuel and port costs [3]. Subsidize away the ruinous regulatory and security compliance costs of nuclear, crater the existing bunker-fuel powered shipping market rates, and controlling global shipping could be wielded as a significant geopolitical tool. Certainly cheaper than the trillions spent on the US military, and delivers leverage at the logistical and supply chain level. I can easily see China do this too, especially with their OBOR initiative. If this came to pass by any nation, then I'm sure it would rightly alarm a lot of people and nations.
[1] https://www.flexport.com/blog/nuclear-powered-cargo-ships/
[2] https://cleantechnica.com/2017/01/28/now-time-nuclear-cargo-...
Because obviously the primary goal of the military isn't cost-saving, it's having subs & aircraft carriers that can stay sea-borne indefinitely. So they'd be using them even if they're actually (much) more expensive
Heck no. As a new tech platform without volume production, they'll be wildly more expensive until the vessel fabricators and ship operators hit that growth knee where experience and volume combine to deliver innovations and cost scaling of their sourcing where the savings stack up. Except in this case the savings have to come from automating the regulatory compliance and operational security of the power plants, both challenging problem spaces.
This is why I specifically pointed out subsidization of those areas to even out the playing field, like the tax subsidies for renewable power. It is a decades-long play for power if someone makes it a national priority. The US has possibly the most advanced ocean-going nuclear vessel tech base, has a best-in-world operational excellence in rail freight, and arguably one of the best freight logistics industries and infrastructure in the world. The US could have dominated the world through its own OBOR on a global scale in a similar way China is trying to dominate as a mercantilist superpower, through effectively owning commercial sector logistical network effects. But trying to convince the DoD and Congress the trillions that would take over decades means convincing them that is effectively what one part of soft power projection-oriented next generation war in the information age looks like. There are any number of other competing theories about next-gen war with much better-funded research and adherents out there, so it's a non-starter.
The US let a significant fraction of its manufacturing and shipping infrastructure comparatively atrophy over the past few decades, so as long as it has to retool with more automation and physical infrastructure to catch up with the leaders, it might as well implement leaps of efficiency over the current state of the art like using gantry cranes to mass-lift entire multiple layers of containers [1] in a single lift cycle. The load/unload/downtime/travel-time components all need lots more operational automation and innovation for nuclear commercial ships for automated regulatory compliance to be feasible, but many developed nations (especially US and China) have the tech base to combine in novel ways to deliver.
[1] https://supplychaingamechanger.com/is-there-a-faster-way-to-...
This is one of those things that will not take off without government initiative - risky, expensive to invest and develop, regulatorily difficult. The payoff is potentially massove though
Mind you the culture nees to change too, we've had quite a few ships seized by pirates or capsized because the crew was drunk
The next step is to sell that stock before the oil market collapses, preferably leaving themselves with a lot of cash and a minority stake in a much smaller company.
Cash is going into technology stocks, venture funds, and international real estate.