Tipsheet

Saudi Royal Family Getting a Little Freaked Out About US Energy Boom

The fracking and natural gas boom in the United States has the potential to overtake Saudi Arabia in terms of energy production and the Saudi royal family is getting very nervous about it.

A Saudi prince has warned that his oil-reliant nation is under threat because of fracking technology being developed elsewhere around the world.

Billionaire Prince Alwaleed bin Talal said the Gulf Arab kingdom needed to reduce its reliance on crude oil and diversify its revenues.

His warning comes as rising shale energy supplies in the United States cut global demand for Saudi oil.

In an open letter to his country's oil minister Ali al Naimi and other government heads, published on Sunday via his Twitter account, Prince Alwaleed said demand for oil from Organisation of the Petroleum Exporting Countries (Opec) member states was "in continuous decline".

 He said Saudi Arabia's heavy dependence on oil was "a truth that has really become a source of worry for many".

He added that the world's biggest crude oil exporter should implement "swift measures" to diversify its economy.

Prince Alwaleed, owner of international investment firm Kingdom Holding, is unusually outspoken for a top Saudi businessman.

But his warning reflects growing concern in private among many Saudis about the long-term impact of shale technology.

It is allowing the US and Canada to tap unconventional oil deposits which they could not reach just a few years ago.

The United States becoming more energy efficient and therefore giving the Middle East less power over energy supply? This is exactly what we have been waiting for.

The fracking boom has already led to major economic gains in America. States that have embraced the practice of breaking apart rock to release oil have seen unemployment numbers drop significantly. In addition, despite all of the fear mongering about the practice of fracking contaminating water, study after study has shown there is no link between the two.

A landmark federal study on hydraulic fracturing, or fracking, shows no evidence that chemicals from the natural gas drilling process moved up to contaminate drinking water aquifers at a western Pennsylvania drilling site, the Department of Energy told The Associated Press.

After a year of monitoring, the researchers found that the chemical-laced fluids used to free gas trapped deep below the surface stayed thousands of feet below the shallower areas that supply drinking water, geologist Richard Hammack said.

Although the results are preliminary — the study is still ongoing — they are a boost to a natural gas industry that has fought complaints from environmental groups and property owners who call fracking dangerous.

Drilling fluids tagged with unique markers were injected more than 8,000 feet below the surface, but were not detected in a monitoring zone 3,000 feet higher. That means the potentially dangerous substances stayed about a mile away from drinking water supplies.

Keep on fracking America.