A return to growth in global oil consumption is normally welcome news for the Gulf because budgets are so reliant on cash from exporting the black stuff. But news that Saudi Arabia's demand for its own petroleum is growing at a rate matched only by China can only be greeted by concern. In its first summit declaration in 1975, OPEC memorably denounced the West for its wasteful use of a finite natural resource, even while enjoying an unprecedented windfall from rising prices. This criticism could now be redirected back to the Gulf, for choosing such a wasteful development path.
Easy access to abundant oil may be a birthright of the region with half the world's reserves, but the benefits from its sale abroad, for refining and adding value, are much greater than its worth as a boiler fuel at home. Burning crude to generate power is not only inefficient, but polluting. And the Gulf will be penalised for its over reliance on hydrocarbon fuels in any future global carbon tax. The kingdom is now expected to burn 1 million barrels daily to meet half of its electricity needs, a staggering volume worth as much as US$30 billion (Dh110.18bn) in lost export income every year by some estimates.
It makes Abu Dhabi's $20bn investment in four nuclear power stations look positively cheap. With so many nations in the Middle East seeking a solution to their power shortages, Abu Dhabi's early moves into renewables and nuclear power are looking smarter by the day. @Email:email@example.com