S Arabia focusing on solar, N-energy as oil burns out

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RIYADH, Mar 27 (Commodity Online): Saudi Arabia is increasingly focusing on nuclear and solar energy because within two decades it will be using most of its oil production for domestic purposes, leaving little for export, if consumption keeps rising the way it is now. Hashim Yamani, President of the King Abdallah City for Atomic and Renewable Energy, recently said the kingdom, one of the world's leading oil suppliers, will require eight million barrels per day by 2028 -- that's roughly its current production level-just to meet domestic needs. The Saudis, along with several other Arab states in the Persian Gulf, has embarked on a controversial nuclear program to meet electricity demand that's rising at about eight per cent a year. Desalination requirements are growing by around eight per cent annually. Despite their vast hydrocarbon reserves, virtually all of the Arab states face natural gas shortages as their populations grow, economies expand and energy consumption mounts. Oil producers are burning up reserves simply to keep pace with power demand. In Saudi Arabia, this is expected to triple to 121,000-megawatts by 2032, according to figures released by the Riyadh government. The King Abdallah Atomic City was set up to develop nuclear technology as part of an $80 billion drive to boost power generation over the next decade, thus allowing the kingdom to maintain significant oil exports. Riyadh received bids from US and British engineering companies in October for a pre-feasibility study of its planned nuclear program. It would identify sites for nuclear plants and study the diplomatic implications of building them. The US Shaw Group and Japan's Toshiba Group announced last summer they had formed a partnership to pursue nuclear power projects in the kingdom. The Saudi government agreed July 5 to sign a nuclear cooperation pact with France 'for the development of peaceful uses of nuclear energy.' No details of the accord have been released and there was no indication when a formal agreement would be signed but it is likely to be soon because the Saudis are working against the clock. According to confidential US State Department cables released by WikiLeaks, the US Embassy in Riyadh warned Washington in 2007-09 about Saudi Arabia's production problems. One said that mounting demand for electricity in the kingdom was likely to constrain Saudi oil exports.