By embracing new technology, pioneering renewable energy sources and harnessing the potential of young people, the region can ensure a bright future
The energy industry can transform the opportunities of Middle Eastern youth
If you stroll along the Corniche in Abu Dhabi, it is difficult to imagine that this vibrant city was once a remote fishing village. Today, many of its buildings reach for the sky − chief among them, the headquarters of the Abu Dhabi National Oil Company.
This towering structure reflects the dramatic development of the emirate’s oil industry, which has transformed it into one of the world’s most prosperous places. Every time I visit Abu Dhabi for Adipec, I am astounded by how quickly it has developed. I shouldn’t be.
The emirate’s visionary leader and the UAE's Founding Father, the late Sheikh Zayed, realised that natural resources could generate prosperity and opportunity for new generations. At Shell, we are proud to have helped Abu Dhabi develop its oil and gas industry, and next year we will mark 80 years of partnership.
Energy resources create opportunities and benefits in equal measure. There are many other examples of this across the Middle East. It is incredible to think how quickly this region has developed in just a few decades.
The contrast with sub-Saharan Africa is significant. According to the World Bank, in 2016 an estimated 98 per cent of people across the Middle East and North Africa had access to energy. In sub-Saharan Africa, that figure was just 42 per cent.
Despite its wealth of energy resources, today the Middle East has an energy challenge: how to meet its rapidly rising demand. In the coming years, regional energy consumption is expected to grow at a faster rate than in the rest of the world.
The answer lies in more and cleaner energy: meeting demand, while bringing down greenhouse gas emissions to help meet the goal of the Paris Agreement. That requires holding the global temperature rise well below 2°C above pre-industrial levels.
The challenge may be great, but so too is the opportunity. Firstly, there is natural gas, the cleanest-burning fossil fuel. Across the Middle East, countries including Egypt, Oman, Iraq and Saudi Arabia, are stepping up production, and the United Arab Emirates aims to be self-sufficient in the coming years. And some regional countries are importing liquefied natural gas. Not only does gas generate the majority of electricity across the region, it also provides the power needs for heavy industry and feeds other industries, such as petrochemicals.
Importantly, natural gas is also a reliable partner for renewable energy projects. Put simply, the combination of gas and renewables has an increasingly important role to play in creating lower-carbon energy systems.
This energy transition is crucial. And Middle East countries are moving in the right direction. For instance, the UAE aims to generate 44 per cent of its energy from renewable sources by 2050. Projects such as Shams Solar Power Station in Abu Dhabi and Al Maktoum Solar Complex in Dubai are paving the way for bigger and bolder steps.
There is also the challenge of what is described as the Middle East’s “youth bulge”. Around half of the region’s population is under 25. And alongside North Africa, it has one of the world’s highest youth unemployment rates, at 27 per cent.
These young people can help the region build for the future. If they are given education, training and employment prospects, their success can feed that of entire nations. The energy industry can play a critical role in helping to create a new era of opportunity, especially in this resource-rich part of the world.
Through astute investment and planning, oil and gas-rich countries can use their resources to diversify their economies, creating direct jobs and other opportunities through local supply and procurement contracts. Take the growth of petrochemicals across the Gulf. Today the region produces more than 10 per cent of the world’s petrochemicals, growth that has created 800,000 jobs over the last 30 years.
Beyond oil and gas, renewable energy projects also offer real prospects for young people. A little further afield, Morocco is an interesting case. It has announced an ambitious target to produce some 50 per cent of its energy demand from renewable sources by 2030 to reduce its dependence on electricity imports.
Morocco’s youth unemployment rate is around 18 per cent, and yet it is short of skilled workers for its renewable projects. That is why there are efforts to train young Moroccans in the skills its energy industry needs. Ultimately, with the right initiatives, governments can meet their rising demand for energy, while helping to provide valuable chances for the younger generation to thrive.
Ultimately, we all crave opportunity. I certainly did when I was young. Opportunity gives people the energy and the will to succeed, as Sheikh Zayed understood. With investment and clear leadership, the energy industry can create a new era of opportunity, in the Middle East and beyond.
Ben van Beurden is chief executive officer of Royal Dutch Shell