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.