• 2 days PDVSA Booted From Caribbean Terminal Over Unpaid Bills
  • 2 days Russia Warns Ukraine Against Recovering Oil Off The Coast Of Crimea
  • 2 days Syrian Rebels Relinquish Control Of Major Gas Field
  • 2 days Schlumberger Warns Of Moderating Investment In North America
  • 2 days Oil Prices Set For Weekly Loss As Profit Taking Trumps Mideast Tensions
  • 2 days Energy Regulators Look To Guard Grid From Cyberattacks
  • 2 days Mexico Says OPEC Has Not Approached It For Deal Extension
  • 2 days New Video Game Targets Oil Infrastructure
  • 2 days Shell Restarts Bonny Light Exports
  • 2 days Russia’s Rosneft To Take Majority In Kurdish Oil Pipeline
  • 2 days Iraq Struggles To Replace Damaged Kirkuk Equipment As Output Falls
  • 3 days British Utility Companies Brace For Major Reforms
  • 3 days Montenegro A ‘Sweet Spot’ Of Untapped Oil, Gas In The Adriatic
  • 3 days Rosneft CEO: Rising U.S. Shale A Downside Risk To Oil Prices
  • 3 days Brazil Could Invite More Bids For Unsold Pre-Salt Oil Blocks
  • 3 days OPEC/Non-OPEC Seek Consensus On Deal Before Nov Summit
  • 3 days London Stock Exchange Boss Defends Push To Win Aramco IPO
  • 3 days Rosneft Signs $400M Deal With Kurdistan
  • 3 days Kinder Morgan Warns About Trans Mountain Delays
  • 3 days India, China, U.S., Complain Of Venezuelan Crude Oil Quality Issues
  • 4 days Kurdish Kirkuk-Ceyhan Crude Oil Flows Plunge To 225,000 Bpd
  • 4 days Russia, Saudis Team Up To Boost Fracking Tech
  • 4 days Conflicting News Spurs Doubt On Aramco IPO
  • 4 days Exxon Starts Production At New Refinery In Texas
  • 4 days Iraq Asks BP To Redevelop Kirkuk Oil Fields
  • 5 days Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 5 days Oil Gains Spur Growth In Canada’s Oil Cities
  • 5 days China To Take 5% Of Rosneft’s Output In New Deal
  • 5 days UAE Oil Giant Seeks Partnership For Possible IPO
  • 5 days Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 5 days VW Fails To Secure Critical Commodity For EVs
  • 5 days Enbridge Pipeline Expansion Finally Approved
  • 5 days Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 5 days OPEC Oil Deal Compliance Falls To 86%
  • 6 days U.S. Oil Production To Increase in November As Rig Count Falls
  • 6 days Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 6 days Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 6 days EU Urges U.S. Congress To Protect Iran Nuclear Deal
  • 6 days Oil Rig Explosion In Louisiana Leaves 7 Injured, 1 Still Missing
  • 6 days Aramco Says No Plans To Shelve IPO
Alt Text

Oil Prices Rise Amid Falling U.S. Rig Count

Oil prices inched higher on…

Alt Text

With A World Awash In Oil, Kazakhstan Faces Fuel Crisis

Kazakhstan is struggling with a…

Alt Text

Footloose Iraq Cannibalizes Saudi Market Share

OPEC’s de-facto leader Saudi Arabia…

Colin Chilcoat

Colin Chilcoat

Colin Chilcoat is a specialist in Eurasian energy affairs and political institutions currently living and working in Chicago. A complete collection of his work can…

More Info

The Middle East Could Face A Historic Crisis By Century’s End

The Middle East Could Face A Historic Crisis By Century’s End

Regarding the Middle East and its oil, the late Sheikh Rashid Bin Saed Al Maktoum, longtime Emir of Dubai and Prime Minister of the United Arab Emirates, once famously remarked:

“My grandfather rode a camel, my father rode a camel, I drive a Mercedes, my son drives a Land Rover, his son will drive a Land Rover, but his son will ride a camel.”

It’s an apt reminder of the finite nature of oil resources, and, of course, the wealth it brings. But, and this is what the Sheikh was getting at, it’s also a call for prudence and thoughtful transformation. Outside of Dubai, the overhaul of oil-based economies is wholly incomplete, but it’s an idea that holds no less relevance as the region prepares for what could be an even greater challenge: climate change.

According to a study by Jeremy Pal of Loyola Marymount and Elfatih Eltahir of the Massachusetts Institute of Technology, large areas of the Persian Gulf may well be uninhabitable by the end of the century. Specifically, the research, published in Nature Climate Change, posits that greenhouse gases will continue to accumulate in the atmosphere at their current pace, sending temperatures to intolerable seasonal highs and increasing the frequency and severity of extreme heat waves. In Kuwait City, Doha, and elsewhere, summer temperatures will frequently reach 140 degrees Fahrenheit; decadal heat waves may top 170 degrees. Related: Energy Storage Could Become The Hottest Market In Energy

Although crippling heat may be a problem for another generation, water, and in turn food, security will reshape the region in near future. With its population set to further explode, water stress – the ratio of water use to supply – is expected to double or triple across the Persian Gulf toward 2040.

While the human effects are better understood, the effects on the region’s vital oil and gas industries are less well-known. Rising temperatures present little direct threat, though extraction operations may become more time- and cost-intensive. Instead, the uncertainty centers on volatile future demand profiles and the rate at which the broader decarbonization movement takes hold.

As such – and considering their high economic reliance on hydrocarbon production – the Gulf States have appeared rather hesitant to commit much, or anything, to renewable energy development, green technologies, or international climate pacts. However, the increasingly negative climate realities – 2 degrees Celsius warming is coming – have dampened the relatively carefree, “damned if we do, not so much if we don’t” attitude surrounding alternative energy. Changes are coming, albeit slowly, and disjointedly. Related: A Big Week For The Oil Markets Ahead Of OPEC Meeting

Count Saudi Arabia among the laggards. The Gulf States’ largest GHG emitter and the world’s largest oil exporter has yet to submit their ‘intended nationally determined contributions’ (INDC) to the UN climate convention – though neither have its regional compatriots Iraq, Kuwait, and Qatar. The kingdom’s 2013 roadmap does outline an ambitious plan to develop some 54 gigawatts (GW) of renewable capacity, mostly solar, by 2032, but such dreams have only been met by delays and mismanaged investments; solar capacity today sits somewhere around 50 megawatts (MW).

It’s a similar story elsewhere around the Gulf. Qatar is expecting its first solar power facility (15 MW) in 2016 and is looking to expand its already established photovoltaic manufacturing industry, but results lag far behind ambition. Kuwait’s solar energy push will begin in earnest, and behind schedule, in late 2017, when the 70 MW first phase of its 2 GW renewable energy strategy is completed.

The UAE is perhaps furthest along with more than 100 MW of solar capacity already online. The country, which submitted its INDC in late October, plans to increase its clean energy mix to 24 percent by 2021, up from about 0.2 percent last year. Dubai’s burgeoning solar market saw record low bids last year, suggesting the energy has a place among heavily subsidized traditional energy sources. Still, its relatively stable business climate is not easily replicated in the region. Related: Apache Resists Unsolicited Takeover Bid

To be sure, the Gulf States’ green objectives stem from very un-green desires; rapidly growing domestic consumption – largely fueled by mounting cooling demands – may transform the oil exporters into net-importers in the not too distant future. Sating domestic needs with renewable energy frees that oil for export and alleviates any potential pressure on government coffers.

The recent climate prognosis isn’t entirely new, but the timeline is worryingly accelerated. Expecting an accelerated response however, would require almost paradoxical economic and political bravery heretofore unseen; though, the potential remains.

By Colin Chilcoat of Oilprice.com

More Top Reads From Oilprice.com:




Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News