Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22
Best Metaverse Tech Stocks Investing for 2022 and Beyond - 14th Jan 22
Gold Price Lagging Inflation - 14th Jan 22
Get Your Startup Idea Up And Running With These 7 Tips - 14th Jan 22
What Happens When Your Flight Gets Cancelled in the UK? - 14th Jan 22
How to Profit from 2022’s Biggest Trend Reversal - 11th Jan 22
Stock Market Sentiment Speaks: Are We Ready To Drop To 4400SPX? - 11th Jan 22
What's the Role of an Affiliate Marketer? - 11th Jan 22
Essential Things To Know Before You Set Up A Limited Liability Company - 11th Jan 22
NVIDIA THE KING OF THE METAVERSE! - 10th Jan 22
Fiscal and Monetary Cliffs Have Arrived - 10th Jan 22
The Meteoric Rise of Investing in Trading Cards - 10th Jan 22
IBM The REAL Quantum Metaverse STOCK! - 9th Jan 22
WARNING Failing NVME2 M2 SSD Drives Can Prevent Systems From Booting - Corsair MP600 - 9th Jan 22
The Fed’s inflated cake and a ‘quant’ of history - 9th Jan 22
NVME M2 SSD FAILURE WARNING Signs - Corsair MP600 1tb Drive - 9th Jan 22
Meadowhall Sheffield Christmas Lights 2021 Shopping - Before the Switch on - 9th Jan 22
How Does Insurance Work In Europe? Find Out Here - 9th Jan 22
MATTERPORT (MTTR) - DIGITIZING THE REAL WORLD - METAVERSE INVESTING 2022 - 7th Jan 22
Effect of Deflation On The Gold Price - 7th Jan 22
Stock Market 2022 Requires Different Strategies For Traders/Investors - 7th Jan 22
Old Man Winter Will Stimulate Natural Gas and Heating Oil Demand - 7th Jan 22
Is The Lazy Stock Market Bull Strategy Worth Considering? - 7th Jan 22
METAVERSE - NEW LIFE FOR SONY AGEING GAMING GIANT? - 6th Jan 2022
What Elliott Waves Show for Asia Pacific Stock and Financial Markets 2022 - 6th Jan 2022
Why You Should Register Your Company - 6th Jan 2022
4 Ways to Invest in Silver for 2022 - 6th Jan 2022
UNITY (U) - Metaverse Stock Analysis Investing for 2022 and Beyond - 5th Jan 2022
Stock Market Staving Off Risk-Off - 5th Jan 2022
Gold and Silver Still Hungover After New Year’s Eve - 5th Jan 2022
S&P 500 In an Uncharted Territory, But Is Sky the Limit? - 5th Jan 2022

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Amid Push For Renewable Energy, Saudi Arabia Cautiously Turns Over Green Leaf

Commodities / Renewable Energy Apr 27, 2010 - 01:44 PM GMT

By: OilPrice_Com

Commodities Best Financial Markets Analysis ArticleThe promise of green energy has intrigued the Middle East, where concern about future reserves runs deep, but Saudi Arabia's recent plan for a multibillion-dollar investment in traditional oil projects underscores lingering concern about betting on renewables.


Riyadh plans to spend $170 billon over the next five years on energy and oil refining efforts; the country's state-owned oil company, Saudi Aramco, will bankroll little more than half this endeavor, according to the Saudi Gazette. The energy giant called it unrealistic for Saudi Arabia to plow into alternative energy sources when the No. 1 cash crop of oil has built its wealth, the report states.

"I don’t think that’s surprising,” said Eurasia Group energy analyst Will Pearson of the guarded approach, adding that Saudi Aramco has long been hesitant given the state’s status as the world’s leading oil producer.

Without a “huge, revolution[ary], game-changing technology,” an abrupt shift in the “fuel mix” is doubtful, said Pearson, who puts more stock in green technologies gradually scooping up market share. Given the abundance of other resources, the Saudi government is more likely to make such nascent energy sources a smaller part of its overall budget, he argued.

Despite trepidation, the Gulf country has been drawn to the "relatively unproven technologies" of biofuels and electric vehicles even though, for the most part, "people are going to be dependent on the oil sector for transport," Pearson told OilPrice.com. Given its access to sunlight, Saudi Arabia has great potential to become a major solar player but has not made “too much concrete progress so far,” he said.

Saudi Arabia is also taking aim at clean water. In a nation where water is scarce, Riyadh plans to build a desalination plant to deliver cheaper, cleaner water.

Yet growing pains are bound to accompany this push away from traditional oil and gas, analysts warn.

“You have to come up with the right regulatory regime,” Pearson said. While some companies are already doing “quite well” in this young energy category, traditional fossil fuels are still a less costly option, he said. An international carbon price would help but “I don’t think there’s been a lot of progress on that,” he said.

The bottom line is that the new industry has to beat traditional hydrocarbons, said Molly Williamson, a consultant and scholar at the Middle East Institute in Washington focused on Middle East and energy issues. “If you develop an alternative energy source that is effective, that is available, that is reliable, but it is the equivalent of $12 a gallon for gasoline, it’s not going to make it,” she charged.

Though it’s uncertain how much these new technologies will cost, “what we know is it isn’t cheap,” Williamson told OilPrice.com. “You’re looking at a long-term projection of unknowable cost. The people that can do that now are the people who can afford it.” This includes not just Gulf nations, she explained, but countries with hard-currency reserves.

What is promising is that many Gulf Cooperation Council countries, as well as oil-producing regions in the Middle East and North Africa, are actually announcing “targets for renewables,” investigating financing mechanisms, and laying the groundwork to bring new types of energy “into the fuel mix,” said Pearson.

The eager drive toward alternative energy is, in part, a bid to meet two of the fastest-growing markets in the world: China and India, Williamson maintained. “The United States has been saying on the record, publicly, repeatedly, we don’t want foreign oil,” she explained. Gulf nations now “see an alternative market, and that market overwhelmingly is Asia.”

In the oil-producing pockets of the Middle East and Africa, there is “growing recognition” that developing wind and solar power can help free up natural gas or oil for export, which is more lucrative, added Pearson.

The Middle East has dabbled in new brands of energy for a decade, but the “incredible run-up” that took place in 2007 to 2008 on the heels of the economic crisis made it “more dramatic,” said Williamson.

Apart from Saudi Arabia, Egypt, which is facing dwindling oil and gas reserves, announced it would host a Dutch factory that will play a key part in its bid to create solar energy.

And energy importer Morocco is planning to embark on a large solar energy project with a $9-billion price tag that is expected to produce about 40 percent of the country’s power by the year 2020. The North African state also has a windmill farm near the city of Tangiers.

But the United Arab Emirates has articulated the most avant-garde vision on new energy with the Masdar Initiative, said Williamson, referring to the effort to usher in renewable energy solutions and clean technologies. “They want to be the first carbon emissions-free country on the planet,” she explained. “They have come up with a very ambitious plan and they have already financed it fully.”

This makes the U.A.E., by far, “ahead of the game” compared to its neighbours in protecting itself against the “shocks and volatility” of traditional markets like the United States, Williamson said.

Originally published at: http://oilprice.com/..

By Fawzia Sheikh for Oilprice.com who focus on Fossil Fuels, Alternative Energy, Metals, Crude Oil Prices and Geopolitics. To find out more visit their website at: http://www.oilprice.com

© 2010 Copyright OilPrice.com- All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in