Saudi Energy Demand May Raise Global Oil Prices
A growing Saudi Arabian population could cause a spike in global oil prices, according to an article in The New York Times.
Saudi Arabia’s population was 28.3 million in 2012—an increase of more than 8 million from 2000, according to the World Bank. The population jump has been met with subsequent increases in demand for water, electricity and oil. Demand for water and electricity has grown 8 percent annually over the last several years, according to Saleh al-Awaji, Saudi Arabia’s deputy electricity minister. The kingdom nearly doubled its consumption of oil from 2000 to 2012, burning about three million barrels of oil per day in 2012.
All of the kingdom’s existing power plants are thermal and burn hydrocarbons like crude oil and fuel oil. Oil-fired power plants alone are burning one million barrels of crude oil per day during the summer.
To help meet its skyrocketing energy demands, Saudi Arabia is planning to expand its energy generating capacity from its current 55 GW to 120 GW by 2020, with additional increases through 2032, according to the United States Energy Information Administration. The expansion comes with a hefty price tag—more than $200 billion annually over the next 10 years.
Although Saudi Arabia’s energy plan includes a substantial investment in renewable energy, some industry analysts worry that it won’t be enough, and the world’s top oil exporting country could become a net oil importer by 2038. Others estimate that the kingdom could become an importer as early as 2022.
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