Saturday, May 23, 2015
Saudi Arabia's oil minister, Ali Al-Naimi, announced that Saudi Arabia was intensifying its investments in renewable energy, particularly solar, and hopes the kingdom will be fossil-free in its expanding consumption of energy by as early as 2040. Since 2012 at least the Saudi government has been expressing interest in developing solar for a post-petroleum economy, at the same time as its energy consumption, particularly of its own oil, rises steadily, but Al-Naimi's announcement yesterday suggested an accelerated program of solar investment. Quatar, with considerably less renewable energy in place, has announced similar though more modest plans.
Is this good news? Yes, as are all transfers from carbon-based to renewable energy. But the Saudis and Qataris have no plans to produce less oil and gas--they merely hope to export more of it, particularly as falling prices have driven down profits, motivating them to increase production for export. On some level this is a shell game (the con, not the giant oil corporation): until global markets everywhere resist the lowered oil and gas prices and expand production of renewables, gestures such as the Saudis' will have limited value. Saudi policy for leaving its vast reserves safely in the ground calls for large compensatory payments. Maybe a prosperous solar sector will reduce Saudi demands for adaptation funds, which will be needed by less wealthy nations.
In any case, yesterday's announcement suggested a shift in momentum from one of the world's major energy players--not decisive in itself, but an interesting sign.