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Abu Dhabi green city the start of a new Middle East energy vision

November 8, 2011 1 comment

If Abu Dhabi were a canvas, few painters would consider using “green” to paint the skyscraper-clad urban desert oasis. Sure, the rich United Arab Emirates city pumps artificial green into its oven of a climate — tree-lined boulevards, expansive golf courses and other vegetation that could never survive without plundering a tremendous amount of resources give the metropolis a more Western feel.

Maintaining this Middle Eastern fantasy ecosystem comes at a heavy environmental and social price. Environmentalists last year warned, “the country, already reliant on costly desalination plants powered by its lucrative fossil fuels, must cut consumption by its 8.2 million people or risk depleting groundwater resources in 50 years,” according to a Reuters report.

It appears Masdar City, an Abu Dhabi community, took that message seriously. Masdar aspires to be the world’s first zero-carbon community and hopes waste timber will earn it that distinction. Masdar also will use native plants in landscaping, which require one-third the amount of water compared with Abu Dhabi’s penchant for unsustainable, unnatural flora. The city intends to divert 50 percent of all waste from landfills by recycling and reusing timber and other materials in the project’s first phase.

Sustainability practices are the first step in attracting research and business opportunities in other energy fields, especially for a region like the Gulf Coast. With European energy markets already more mature and those economies lacking the capital to initiate expensive, advanced projects, energy firms are looking toward emerging economies in the Middle East, Latin America and Asia Pacific for investment.

Scotland struck a deal with Masdar City on Monday to support  university research and other initiatives. That deal is potentially worth billions of dollars, Scottish First Minister Alex Salmond said:

“I firmly believe this agreement will yield great results for Abu Dhabi, great results for Scotland, and I do believe it will lead to significant advances that will benefit this entire planet. That’s the importance of what’s been talked about.”

As I’ve said in this space many times before, Middle Eastern nations must diversify their energy economies. That will that help avoid dependence on state-owned oil c0mpanies that prone to corruption. It also will provide a place for investment dollars, as energy firms are simply waiting for the next market to pop up so they can do something with all their money. In turn, that will spur research institutions — possibly leading to patents and valuable innovation — in Middle Eastern nations that desperately need to create skilled jobs for its educated, underemployed and young citizens.

The Middle East, with its well-documented dependence on fossil fuel production as a main economic driver, is an embryonic energy market. Energy pioneers there realize the benefits of technologies like PV solar, but too few people in the region have enough understanding of the technology for any sort of renewable energy movement momentum. However, investors will be more than ready when that momentum builds.

The Masdar City project is a good start, as it will get people in the region thinking about renewable energy and sustainability. Already, Masdar Institute, a graduate-level university focusing on renewable energy and sustainability, hosted a meeting with 12 UAE universities about joining the European Union-Gulf Cooperation Council (EU-GCC) Clean Energy Network. That organization strives to “build a functional partnership and extensive new networks relevant to renewable energy sources, energy demand side management and energy efficiency, clean natural gas & related clean technologies, electricity interconnections and market integration; as well as carbon capture and storage.”

The Middle East needs a new energy picture. It’s time to paint the region green.

Saudi Arabia plans nuclear energy expansion, has oil implications

June 3, 2011 1 comment

Saudi Arabia, which has defined the term “rentier state,” has decided to expand its nuclear energy production so it can devote more of its crude oil to exports.

A Saudi official said the kingdom plans to build 16 nuclear reactors by 2030. The $100 billion project will help meet the country’s energy demands, which are rising between 7 and 8 percent annually.

With oil hitting $100 per barrel, Saudi Arabia is considering increasing its output to lower oil prices. That should raise consumer demand and potentially generate even greater revenues for the world’s largest oil producing state. The country will attempt to reduce its own energy consumption to accommodate the increase in exports. It seems it will try to make up for that loss through nuclear energy.

It’s safe to say Saudi Arabia isn’t at risk of Japan-like tsunamis and earthquakes — the Saudi kingdom can thank Yemen and Oman for being the geographical buffer between it and the Indian Ocean — so this move makes sense for Saudi Arabia.

But the question is what happens with increased oil revenues from devoting more of the nation’s main economic driver. Currently, the kingdom keeps most of those revenues already. It recently offered citizens $35 billion of economic relief in hopes of preventing revolutions that occurred in Egypt, Tunisia, Bahrain and elsewhere. But the only reason it was able to offer that abrupt aid was because it has such a vast pool of money tied up among political elite that does not get regularly redistributed throughout the rest of Saudi society.

Saudi Arabia knows the time is ripe for expanding oil output, especially if it will help lead to energy diversification — relying on oil is not sustainable and the Saudi economy is doomed if it expects that to be the cornerstone for decades to come. China is demanding more of it and nations that once allowed privatization by foreign companies have consolidated “black gold” into public control, therefore putting a damper on the international oil supply and driving up demand. But if Saudi Arabia is ever going to improve the lives of its citizens and become a truly modern nation, it needs to pump oil out of the Royal Palace and into Main Street.

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