CONCLUSION: THE CLIMATE HEDGE167Aramco’s production decisions undergo painstaking deliberation over
the optimal pace of depletion. Aramco calibrates output from individ-
ual fields so that recoverable oil is exhausted gradually, over a minimum
of thirty years.^9
This strategy has had the effect of leaving oil in the ground for the
benefit of future generations and, at the same time, constraining supply
to the market. The kingdom’s output has hovered at about 13 percent of
global supply, a self- imposed limit that has forced oil prices up.^10 This
restraint has allowed higher- cost “fringe” producers to meet remaining
demand with costlier oil. The late King Abdullah gave voice to this strat-
egy in 2008 when he reportedly ordered new reserves left for future
generations. “I keep no secret from you that when there were some new
finds, I told them, ‘No, leave it in the ground. With grace from God, our
children need it.’ ”^11
Viewed through the lens of climate action, Aramco’s disciplined strat-
egy looks like a liability. Cautious monetization assumes there are no
threats to the long- term value of crude oil. Yet, for at least a decade, Saudi
officials have voiced fears about “security of demand,” whether from
climate factors or Washington’s rhetoric around energy independence.
US diplomatic cables released by WikiLeaks^12 revealed some of these
concerns, as have Naimi’s public statements^13 and those of an adviser,
Mohammed al- Sabban, who predicted in 2015 that global demand would
peak by 2025.^14
In 2010, US Ambassador to Riyadh James Smith cabled Washington
to describe Saudi fears over gathering threats to oil demand. “Saudi Ara-
bia is concerned by the lack of clarity for [global oil] outlook, as fore-
casts have ranged from many prognosticating a year or two ago that oil
production had peaked, to a growing consensus that perhaps demand
has peaked,” Smith wrote. “Uncertainties over what policies will be
adopted to address issues like climate change play a big role in that uncer-
tainty.”^15 Those fears have only intensified in the years since Smith sent
his cable.
The realization that the world is overendowed with hydrocarbon
reserves that can never be produced is forcing a strategic alteration in
oil market behavior. Oil and gas markets appear likely to grow more