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July 2011

Export Land Model – the Saudi update

Stephen Hodgdon · July 14th, 2011

A quick update on the export land issue that I blogged about previously. In short, the problem is petroleum-producing countries becoming wealthy exporting oil and then finding their rising domestic oil use significantly cutting into what’s available for export even as their oil fields become less productive due to age. The ramifications are manifold – from unrest at home as shrinking revenues reduce subsidies and push up prices on things like food and gasoline, to turmoil on international markets as shrinking surplus capacity makes it easier for traders to drive price swings through speculation.

With this in mind, a few recent stories involving Saudi Arabia caught my eye. The first is a pretty straightforward endorsement of the export land model theory. In this story, Abdel Salam al-Yamani, head of the Saudi Electricity Company, is quoted as saying that, if left unchecked, Saudi Arabia’s current domestic oil consumption rates will deplete the country’s reserves by 2030. The second story involves the Saudi’s ramping up a nuclear energy program to the tune of at least $100 billion dollars. This story on the Saudi oil export and energy issue in the Wall Street Journal has a nice graph charting rising Saudi oil consumption. Finally, this story pulls in the previous points and also notes that the Saudi’s are going full bore into an energy source they’re likely to have in abundance for a long time to come: solar. Who knows, maybe one day they’ll be exporting that energy, too. In the meantime, the Middle East, in general, seems interested in conservation to ensure exports of their main revenue source remains high.

Global investors pour money into green energy

Steve McGrath · July 8th, 2011

Nothing like cool, refreshing facts to support the desperate hope for a renewable energy revolution.

New investment in green energy was up nearly one-third globally in 2010 to a record US$211 billion. That’s 32 percent above the 2009 level and more than five times that of 2004, says the United Nations Environment Programme (UNEP).

Other facts from UNEP’s new report:

  • Wind farms in China and rooftop solar panels in Europe were key drivers in the investment increase.
  • China was the world leader in “financial new investment” – i.e., investment in utility-scale renewable projects and equity capital for renewable energy companies. The nation’s tally was US$48.9 billion, up 28 percent this year.
  • Developing economies (which invested US$72 billion this year) overtook developed ones (US$70 billion) in financial new investment.
  • Investments in small distributed capacity, e.g., rooftop solar, rose 132 percent in Germany to US$34 billion.
  • Costs for renewable technologies are falling.
  • Wind dominated financial new investment in large-scale renewable energy.
  • Biggest percentage jumps in overall investment were in small-scale projects, up 91 percent to US$60 billion, and in government funded R&D, up 121 percent to US$5.3 billion.

“The finance industry is still recovering from the recent financial crisis,” Udo Steffens, president of the Frankfurt School of Finance and Management, said in a UNEP news release. “The fact that the industry remains heavily committed to renewables demonstrates its strong belief in the prospects of sustainable energy investments.”

So there’s hope. And now facts.

More here.