By Molly Pimm
A response to Supriya Shekhar’s ‘The Winds of Change: A Gradual Energy Transition in the Middle East’
As succinctly put by Supriya, the Middle East is, by and large, heavily dependent upon oil and natural gas, both in terms of exporting it, and consuming it to meet the energy demands of its ever-growing population. In fact, given that the region accounts for 31% of global oil production and 18% of gas production, and is home to 48% of proved oil reserves and 40% of proved gas reserves, it would not be a stretch to say that there exists no place in the world as dependent upon oil and gas as the Middle East.
So, where does the region stand in a world that is transitioning to a low-carbon future in which there exists no place for fossil fuels, and in which renewable energy sources are being proposed as the only logical way forward? Unfortunately, whilst the rest of the world seems to be moving in the right direction, such a transition in the Middle East remains, for a number of reasons, a long way off.
Firstly, although the governments of many countries across the Middle East appear to be aligning themselves with the global shift that is occurring by setting ambitious clean energy targets, those same governments have explicitly expressed their reluctance to ramp down the production of fossil fuels, with some leaders even outright refusing to. In Saudi Arabia, for instance, Mohammed bin Salman, the country’s crown prince, deputy prime minister, and minister of defence, has refused to commit to scaling down the country’s production of oil and gas, despite pledging to cut its carbon emissions to net zero by 2060. Similarly, Saudi’s neighbour, the UAE, recently revealed that, quite unlike the rest of the world, the country has a dual commitment to the achievement of two seemingly contradictory goals – environmental sustainability and continuing oil production.
Looking to the future, then, it remains unlikely that the energy mix in the Middle Eastern region will change drastically any time soon, primarily because the region’s leaders seem to be lacking the sense of urgency that is vital for tackling the climate change threats that come with the continued extraction, production, and consumption of fossil fuels. At least for now, the ‘winds of change’ are certainly not blowing.
To add to this reluctance to ‘leapfrog’ from traditional energy sources, increases in oil demand as of late have left the profit-driven oil and gas producers of the Middle East facing a conundrum – do they continue to scale up renewable energy in line with current global trends, or do they take advantage of the current climate and raise their oil and gas output?
Today, in light of the EU’s collective decision to block most Russian oil imports by the end of 2022, this conundrum has become all the more difficult. Essentially, with Russian output expected to sink, it is looking increasingly likely that the Middle East will become Europe’s new supplier. Because of this, in the eyes of the region’s leaders, it would be more sensible to continue to produce fossil fuels than to embark upon any new business venture, despite the fact that doing so flies in the face of any prior commitment to limiting warming to 1.5 degrees, or any promise to scale up renewables.
In ironic timing, then, just as this past month saw UN Secretary-General António Guterres unveil a new five-point plan to speed up the shift to renewable energy, Russia’s invasion of Ukraine has made shifting to renewables less attractive to the Middle East than ever before.
Finally, given the inherent volatility of oil prices, it goes without saying that fossil fuels are a risky investment. However, for the Middle East, shifting subsidies from fossil fuels to renewable energy is perhaps an even more risky business venture. Although the cost of solar and wind power has fallen in recent years, and although it has been argued that these two sources of energy alone could meet world energy demand 100 times over, renewables can be extremely unreliable. For instance, solar cells rely heavily upon the weather to produce electricity. In theory, because of the Middle East’s reliable sun, scaling up solar energy should be without-problems. In fact, according to a 2019 report by the International Renewable Energy Agency, solar energy represents 91 per cent of the potential renewable power generation currently being pursued by the Arab states of the Gulf. However, as Supriya points out, in recent months, unusually high numbers of sandstorms have been engulfing the region. In May of this year, for example, one such sandstorm was so bad that it not only disrupted flights across Iraq, Syria, and Iran, but sent hundreds of people to hospital. For now, then, investing heavily in an unreliable energy source is not necessarily the most sensible way forward for the region.
For all of the reasons that Surpirya outlines as to why renewable energy is ‘not an attractive business venture’ to leaders in the Middle East, it seems unlikely that a rapid diversification of energy sources is on the cards any time soon, especially since these leaders have no intention of losing their ‘geopolitical and economical prestige’ that comes with being some of the world’s top oil producers. If the reliability and efficiency of renewables were already being thrown into doubt prior to the Ukraine crisis, how can we expect the ‘winds of change’ to start blowing now, when demand for middle eastern oil and gas is at an all-time high?
The St Andrews Economist 