Are Renewables Just Freeing Up Oil For Export?

masdar city mashrabiyaDoes an expanding renewables market in the Middle East (such as that showcased in Masdar) just mean more oil can be exported and more profit made at the expense of the world climate?

Here are GreenProphet, we have been carefully following the Middle East’s slow but steady uptake of renewables technologies. Every solar project or wind farm in the region is a small step in the right direction- away from oil and fossil fuels and towards green energy. However, some commentators state that renewables should be used to support local energy needs so that more (profit-making) oil can be exported to other countries instead.

Sally Bakewell writing for Bloomberg explains that “oil-rich Gulf nations are seeking to diversify away from fossil fuel production and toward green-energy projects as they look to longer-term sustainable development of their economies. Higher international crude prices also encourage the countries to sell more of their oil abroad. Prices have risen 10 percent in 2012, after more than doubling in the previous three years.”

Building a renewables industry allows more crude to be exported, Indraj Mangat, a partner at Eversheds LLP told Bloomberg. “There’s a realization that rather than burning it cheaper and at subsidized rates in their own region, they should probably sell” more of it abroad, he said.

The idea, I have to admit, is quite worrying. The Middle East is in a unique situation in that it has a ready supply of oil (for now) and also solar and wind energy potential. Diversifying is clearly a good idea to help ensure that future generations are not left in the lurch in terms of energy. However, the notion that they should just embrace renewables to make more money by exporting more oil rather than allowing locals to use it at a subsidized rate is troubling. It’s the ultimate Jevons Paradox.

Jevons’ Paradox is when energy efficiency measures actually lead to higher consumption of energy. The best example is that of someone who saves money through changing their light bulbs and switching to renewables but then uses that money to take a cheap flight for an impromptu holiday.

So rather than reducing their dependencies (as well as the world’s) on oil, it seems that the region is only going to stop exporting when it all runs out. And by then it may already be too late.

:: Bloomberg News

Image via GreenProphet/flickr.

For more on green energy in the Middle East see:
A Real Live Solar City Shines in Israel
Post-Revolution Egypt Wants New Wind Farms
You can also follow Susan Kraemer who is our green energy expert

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7 thoughts on “Are Renewables Just Freeing Up Oil For Export?”

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  7. Chris says:

    It is unreasonable for you to think that these countries will not supply as much crude as the market demands. Would you expect these national oil companies to behave differently than any for-profit enterprise? Furthermore, amy success they have in using remewables to displace oil-fired generation (which is the norm during summer months in every Gulf state except Qatar), is a net positive for global emissions. And any move to reduce the incredibly wasteful consumption patterns of subsidized gasoline is also a net positive for global emissions.

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