Diversify: Solar power for the Gulf (page 1 of 2)

But a closer look shows that solar power could complement the energy mix of the GCC countries perfectly:

• It would spare more of the precious oil and gas for exports and as feedstock for the local petrochemical industry
• It could result in GCC leadership in a technology that is new and relatively labor-intensive
• It would help the GCC to comply with international environmental standards like the Kyoto protocol

The GCC countries currently have the highest growth rate in oil consumption worldwide (4.5 percent vs. 2.5 percent for Asia and 1 percent for the US) and already use 17 percent of the oil they produce. The International Energy Agency (IEA) projects a rise in worldwide oil demand from 80 mbpd today to 120 mbpd in 2030. Hopes to meet this projected demand rest on the Gulf countries, as production in other regions is declining (notably in the US and the North Sea). Although the IEA believes that this will be possible once huge investments are made, Saudi Arabia has already sounded a note of caution, while authors associated with the 'peak oil' debate (Matthew Simmons, for example) have questioned whether the Gulf countries are capable of production increases at all. The recent debate in Kuwait about overstated oil reserve figures also hints at this.

In any case, the importance of energy exports from the Gulf will increase dramatically over the years to come, and the less oil and gas the GCC countries use for their own consumption, the more they can stretch the lifetime of their most precious export good. This would also leave more oil as feedstock for their petrochemical industry, which is a crucial part of their diversification strategy. Tourism, another important part of the GCC diversification drive, is also heavily dependent on the availability of fuel: rising oil prices and delays in developing alternative fuels like hydrogen and methanol will lead to prohibitively expensive flights and declines in tourist numbers.

Renewable energy can hardly be regarded as an uneconomical hobby of esoteric tree-huggers anymore. Governments and corporations around the world are acknowledging its importance in increasing numbers, as it offers the long-term vision of clean and limitless energy alternatives for an after oil age. BP has reinterpreted its acronym as 'Beyond Petroleum' for a reason, while Chevron has declared that the era of cheap oil is over - it has created a special website to spur discussions about possible solutions (www.willyoujoinus.com). Meanwhile, the 2006 Detroit Auto Show has shown the great interest of the car industry in alternative hydrogen fuel, and many governments, including those of Germany, the US, Japan, India, and China, have created programs to encourage the development and distribution of renewable energy technology. Wind power plants are already competitive with newly built coal plants, and contribute 20 percent and 4 percent of electricity supply in Denmark and Germany respectively. The University of Stanford recently identified suitable regions for wind power generation in a special world atlas. It has argued that the energy needs of the whole planet could theoretically be met several times over by using all the sites identified in the atlas.

The Gulf countries do not have a lot of wind, but everybody who had to walk around the block on a hot summer day in Dubai knows that there is solar energy out there, and loads of it.