Reports and Papers-Burning Oil to Keep Cool: The Hidden Energy Crisis in
Glada Lahn and Paul Stevens, December 2011
Download paper here
* Domestic energy demand growth in Saudi Arabia is cause for
international concern. If it continues at the current rate, it could
jeopardize the country's ability to stabilize world oil markets.
* Given Saudi Arabia's level of dependence on oil revenues, excessive
consumption will cause economic and social pressures long before oil exports
end - within a decade if nothing changes.
* Current policies are not enough. Planned additions of renewable
power supply would help maintain the fiscal balance for an additional two to
three years; given the lead times nuclear power would have little or no
* Huge economic, social and environmental gains from energy
conservation are possible in Saudi Arabia but the long period of low prices
and the bureaucratic structure of the state present several challenges to
implementing effective pricing policy and regulatory measures.
* Fear of confronting these challenges has deterred meaningful
government action in the past. However, some immediate, targeted investments
could produce effective results even in the absence of price reforms.
* Raising prices is politically difficult but international experience
can help in preparing society through a range of efficiency, educational and
infrastructure adaptation measures to smooth the transition. This must be
done within a package of measures that increase private-sector employment
for Saudi nationals.
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Received on Thu Dec 15 2011 - 18:31:16 EST