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24 Jan 2010
by Booji
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DEBATE: CAN ALTERNATIVES BE PROVIDED TO REDUCE THE DEPENDENCE OF MAJOR ENERGY EXPORTERS ON OIL?
Posted by: booji
Karma:
1503
Many of the countries most opposed to a deal at Copenhagen were the major energy producers, most notably Saudi Arabia. Many of these energy exporters are dangerously dependent on the fossil fuels they produce for their economy. Oil and gas make up the majority of their exports and is a major employer. In order for these countries to be able to support further action on climate change they need alternatives – not just in terms of energy but in terms of employment.
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CAN ALTERNATIVES BE PROVIDED TO REDUCE THE DEPENDENCE OF MAJOR ENERGY EXPORTERS ON OIL?
Solar power
Many of the countries that have been blessed (or cursed) with oil are hot and sunny (particularly the gulf states and North Africa). This means that solar power is a viable alternative for their own energy and possibly as an export as well. There have been numerous suggestions of immense numbers of solar panels in the Sahara with the electricity being consumed in cloudy Europe. Gulf states could equally export solar power north to Turkey and on to Europe and Russia.
This would require immense investment in new infrastructure, both to create the electricity in the first place and to transport it to the consumers.Actually most Arab countries already use solar power(solar cars, electricity) internal/personal/locally but the problem for them is that they are economically dependent on the sale of oil/gas exports.Selling solar energy as stated above could prove to be an expensive enterprise in terms of setup costs. The suggestion on the left depends on evaluating profit-loss from taking up such an endeavor and since the gulf states aren't exporting solar energy already; they probably think the idea is not worth their time.Gulf states do not produce solar panels and won't buy them until and unless(unless and until) their cost drops dramatically and panels would be profitable for them to use to export solar energy.
What do you think? Vote on this point below.
CAN ALTERNATIVES BE PROVIDED TO REDUCE THE DEPENDENCE OF MAJOR ENERGY EXPORTERS ON OIL?
The example of Dubai
Previously oil rich countries can escape from only having one major export. In the case of Dubai oil running out forced the emirate to pursue alternatives; in its case, attempting to turn the emirate into a global finance centre and a tourist destination. In 2007 Dubai had 7 million tourists visiting[1] and there were predictions that numbers would reach 10million by 2010, although this has almost certainly been put back by the financial crisis. This diversification requires a lot of investment, however money for investment is something that oil rich states have.
Dubai having been bailed out by its oil rich neighbour Abu Dhabi is not necessarily the best example of how a state can diversify away from oil.
What do you think? Vote on this point below.
CAN ALTERNATIVES BE PROVIDED TO REDUCE THE DEPENDENCE OF MAJOR ENERGY EXPORTERS ON OIL?
Effects on oil supply
In some ways major energy producers are in a very good position to be extremely beneficial in the fight against global warming and benefit themselves at the same time (or at least not have too much impact upon themselves). When it comes to oil the cartel created by most of the major producers can to some extent control the price. This means that they can reduce the supply and so push up the oil price. This will reduce CO2 emissions around the world while the oil exporting countries get plenty of money from what they are doing. If there is emissions trading at the same time they could also gain money because they would be reducing their own emissions in the process so giving themselves more credits to sell.
Fiddling with the oil price is a balancing act for the oil exporting countries. They want to get a lot of money from their resources however no matter how much they might wish to reduce emissions and be seen as good guys when it comes to global warming they are aware that push prices too high and they will force the consumers away from oil to alternatives. This would be bad for them as they would not make as much money. Whether it would be good for GHG emissions is debateable too. While many will think that the alternatives should be renewables in practice this is not likely to be the case. This would probably mean that there would be a global shift back towards coal as the major energy source which would be very detrimental for combating global warming.
What do you think? Vote on this point below.
CAN ALTERNATIVES BE PROVIDED TO REDUCE THE DEPENDENCE OF MAJOR ENERGY EXPORTERS ON OIL?
Not all energy producers need to stop producing
For some major fossil fuel producers producing more may actually be good for the environment. More particularly this is the case for countries that produce natural gas. Greater use of natural gas is a relatively easy way to reduce CO2 emissions for many countries. The USA and China in particular get a lot of their electricity needs from Coal fired power stations, it would be more environmentally friendly to use either oil or gas than coal. Electricity generated from gas is just 40% as CO2 intensive as electricity generated from coal. Taking the USA as an example half of electricity is created by Coal and 20% by natural gas. However because demand fluctuates it would be possible to use natural gas much more than the USA does at the moment without building more power stations. At the moment coal provides the base electricity production while gas picks up on extra demand meaning that it is not used nearly as much as it could be if used to meet base demand, so simply switching gas to meeting base demand would result in a large reduction in CO2 emissions.[1]
CAN ALTERNATIVES BE PROVIDED TO REDUCE THE DEPENDENCE OF MAJOR ENERGY EXPORTERS ON OIL?
A one off bounty
Oil having been a one off bounty does not mean there is no future after oil. At the moment these oil states rentier economies make them uncompetitive but they have the money to invest in education and many citizens go abroad to universities. This means that there is the possibility of moving to productive industries and services as oil declines. The one off bounty can be invested to create lasting prosperity.
There is nothing that can replace oil in its entirely for OPEC members. Oil has provided a one off bounty that will never come again once it has been used or when those states voluntarily agree to reduce their output. It has created rentier economies that makes it very difficult for these countries to develop.Rentier economies rely upon systems of patronage relying upon kinship groups, merchant communities and patron-client relationships, economic considerations become subservient to political considerations.[1] This occurred because of the small size of Middle Eastern private sectors forced the creation of state centred development programs.[2] Unfortunately for these states perpetuating the resources that give their regime its legitimacy, as a provider, is absolutely vital, the regime needs to be able to fulfil its side of the bargain with the people. This forces these regimes into more extreme positions than they would otherwise take,[3] in this case meaning that they oppose environmental agreements for fear of the results on their economy.
- ^ Michel Chatelus and Yves Scehmeil, ‘Towards a New Political Economy of State Industrialisation in the Arab Middle East’, International Journal of Middle East Studies, Vol. 16, No. 2 (May, 1984), pp.251-265, pp.261-262
- ^ Timur Kuran, ‘Why the Middle East is Economically Underdeveloped: Historical Mechanisms of Institutional Stagnation’, The Journal of Economic Perspectives, Vol.18, No.3 (Summer, 2004), pp.71-90, p.87.
- ^ Gerd Nonneman, ‘Rentiers and Autocrats, Monarchs and Democrats, State and Society: The Middle East between Globalisation, Human “Agency”, and Europe’, International Affairs, Vol.77, No.1 (Jan., 2001), pp.141-162, pp.146-147.
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booji
|11:39, 21 January 10
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|11:52, 21 January 10
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