According to a 150-page report by Citigroup, Saudi Arabian oil could dry up as early as 2030 which is a lot sooner than previously thought
The high consumption of oil in the Gulf nations for air-conditioning and desalination means that oil wells are likely to run dry a lot sooner than expected. That’s the news coming from a report by Citigroup which states that Saudi Arabia could be an oil importer by 2030. Local Saudi consumption is skyrocketing with residential use making up 50 percent of demand and over two thirds of that goes to air-conditioning. Saudis are also consuming 250 litres of water per person per day – that makes them (rather shockingly) the world’s third largest water consumer – and most of that water is from energy intensive desalination plants.
Lavish fuel subsidies in the Gulf nation is also make matters worse as they discourage conservation or efficiency by keeping the prices artificially low at all times. Heidy Rehman from Citi summarises: “Saudi Arabia is the world’s largest oil producer (11.1mbpd) & exporter (7.7mbpd). It also consumes 25% of its production. Energy consumption per capita exceeds that of most industrial nations. Oil & its derivatives account for ~50% of Saudi’s electricity production, used mostly (>50%) for residential use. Peak power demand is growing by ~8%/yr. Our analysis shows that if nothing changes Saudi may have no available oil for export by 2030.”
According to the Daily Telegraph, the report should make for sober reading for those who think that shale oil and gas have solved our global energy crunch. As it stands, Saudi consumes all of its gas production domestically and the report adds that “Saudi Arabia will need to find new sources to meet residential and industrial demand.” Saudi Arabia is currently planning a 80GW nuclear plant and details have also emerged of its $109 billion solar plan. The first signs of what an energy shortfall could lead to came this Ramadan when there were protests following power outages in Jeddah.
: Image of old oil drill head via David C Foster/Flickr.
For more on Saudi and oil see:
Are Renewables Just Freeing Up Oil For Export?
Saudi Peak Oil Could Affect World in 2012
Subsidies Jeopardise Renewable Energy Projects In The Middle East
Author: Arwa Aburawa
Arwa is a Muslim freelance writer who is interested in everything climate change related and how Islam can inspire more people to care for their planet and take active steps to save it while we can. She is endlessly suspicious of all politicians and their ceaseless meetings, especially as they make normal people believe that they are not part of the solution when they are the ONLY solution. Her Indian auntie is her model eco-warrier, and when Arwa is not busy helping out in the neighborhood alleyway garden, swap shopping or attempting fusion vegetarian dishes- with mixed success, she’d like to add- she can be found sipping on foraged nettle tea.
I am student trying to understand the basics of Global energy market esp Oil production and consumption. Is it possible to read the mentioned report by Citi Group ?
I was surprised how shallow the report’s assumptions and predictions are! Assuming the power generation growth for the next 20 years is not accurate, assuming no alternative energy sources, assuming no new reserve, assuming, no technology advancement, etc
“According to a 150-page report by Citigroup, Saudi Arabian oil could dry up as early as 2030 which is a lot sooner than previously thought”
that is not what the citigroup report said at all. The citigroup report stated KSA would cease to export oil by 2030 as their domestic consumption would consume all of their production. The truth is in your story when you print the citigroup report statement “analysis shows that if nothing changes Saudi may have no available oil for export by 2030.” That does not mean the wells are dry it means the wells are producing only enough for Saudi consumption. Where’d you get your Journalism training, from a cracker jack box?
Saudi Arabia will run out of oil some day, but the 2030 date is based on the patently absurd assumption that the collapse of the country’s main source of income will have no effect on its rate of economic growth, and shouldn’t be taken seriously.