Could not happen to a nicer bunch of people

From Walter Russell Mead, writing at The American Interest:

Saudis Sweat Bullets As Energy Revolution Changes the Rules
The US shale gas boom, drastically cutting the cost of gas, is shaking the foundations of the Saudi Arabian economic model�and more is coming. The highly profitable $100bn Gulf petrochemical industry is taking a hit as its biggest customer�the U.S.�is importing less and relying instead on domestic production.

US petrochemical companies, propelled by cheaper access to raw materials, are competing effectively against companies like the Saudi Basic Industries Corp (Sabic), the world�s largest chemical maker. Sabic also has some home-grown problems. The rapidly growing Saudi population wants to consume (subsidized) petrochemicals at home, air conditioning Saudi houses and running Saudi cars instead of exporting product abroad. Falling production, demand, and prices are beginning to hurt the once stalwart $89bn company. The Financial Times reports:

�The cyclical Gulf petrochemicals industry is already suffering, as lower prices have coincided with higher raw material costs. Sabic�has reported declining profits in every quarter so far this year.

In the third quarter net income fell 23 per cent from the year-earlier period; it fell 35 per cent in the second and 5 per cent in the first quarter.�

US gas prices have plummeted due to new techniques, known as fracking and horizontal drilling, developed to extract the vast deposits of shale gas in the North American bedrock. Production has jumped by nearly a quarter since 2000, reducing demand for Saudi gas. If China figures out how to exploit its own shale gas reserves the Saudis will have every reason to be nervous. The two pillars of the Saudi economy�oil and petrochemical exports�will both be on shaky ground.

One time when I will say: "Go China!" The sooner we starve these oil ticks, the sooner the world will be a lot more peaceful. The Wahhabist faction in S.A. (petro-islam) are the ones funding the majority of the terrorism around the world. Like I said, a nice bunch of people. The sooner they get retired back to their original status, the better.