Energy
In physics, energy (from Ancient Greek: ἐνέργεια, ''enérgeia'', “activity”) is the quantitative property that is transferred to a body or to a physical system, recognizable in the performance of work and in the form of heat a ...
in
Saudi Arabia
Saudi Arabia, officially the Kingdom of Saudi Arabia (KSA), is a country in Western Asia. It covers the bulk of the Arabian Peninsula, and has a land area of about , making it the fifth-largest country in Asia, the second-largest in the A ...
involves
petroleum
Petroleum, also known as crude oil, or simply oil, is a naturally occurring yellowish-black liquid mixture of mainly hydrocarbons, and is found in geological formations. The name ''petroleum'' covers both naturally occurring unprocessed crud ...
and
natural gas
Natural gas (also called fossil gas or simply gas) is a naturally occurring mixture of gaseous hydrocarbons consisting primarily of methane in addition to various smaller amounts of other higher alkanes. Low levels of trace gases like carbo ...
production, consumption, and exports, and
electricity
Electricity is the set of physical phenomena associated with the presence and motion of matter that has a property of electric charge. Electricity is related to magnetism, both being part of the phenomenon of electromagnetism, as described ...
production. Saudi Arabia is the world's leading oil producer and exporter.
Saudi Arabia's economy is petroleum-based; oil accounts for 90% of the country's exports and nearly 75% of government revenue.
[
The oil industry produces about 45% of Saudi Arabia's gross domestic product, against 40% from the private sector.] Saudi Arabia has per capita GDP of $20,700. The economy is still very dependent on oil despite diversification, in particular in the petrochemical
Petrochemicals (sometimes abbreviated as petchems) are the chemical products obtained from petroleum by refining. Some chemical compounds made from petroleum are also obtained from other fossil fuels, such as coal or natural gas, or renewable sou ...
sector.
For many years the Kingdom of Saudi Arabia has been the world's largest petroleum producer and exporter. In 2011 it pumped about per day of petroleum.[ While most of this is exported, domestic use is rapidly increasing, primarily for electricity production.
Saudi Arabia also has the largest, or one of the largest, proven crude oil reserves (i.e. oil that is economically recoverable]) in the world (18% of global reserves, over ).
Saudi Arabia, has one of the largest reserves of natural gas in the Persian Gulf
The Persian Gulf ( fa, خلیج فارس, translit=xalij-e fârs, lit=Gulf of Persis, Fars, ), sometimes called the ( ar, اَلْخَلِيْجُ ٱلْعَرَبِيُّ, Al-Khalīj al-ˁArabī), is a Mediterranean sea (oceanography), me ...
. Proven natural gas reserves are over . Global production in 2009 reached of oil and of natural gas.[ 2011 report on oil and gas companies, Promoting revenue Transparency]
Transparency International
Transparency International e.V. (TI) is a German registered association founded in 1993 by former employees of the World Bank. Based in Berlin, its nonprofit and non-governmental purpose is to take action to combat global corruption with civil ...
2011 page reserves 114–115 but due to its sizeable domestic gas markets, is "unlikely to become LNG exporters anytime soon". Saudi Arabia is prioritising upstream gas investment, but for use in the domestic power generation market, not for export.
The country has had plans to diversify its energy sources for some time, developing solar and nuclear power.
Petroleum
Reserves
According to OPEC
The Organization of the Petroleum Exporting Countries (OPEC, ) is a cartel of countries. Founded on 14 September 1960 in Baghdad by the first five members (Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela), it has, since 1965, been headquart ...
, Saudi Arabia
Saudi Arabia, officially the Kingdom of Saudi Arabia (KSA), is a country in Western Asia. It covers the bulk of the Arabian Peninsula, and has a land area of about , making it the fifth-largest country in Asia, the second-largest in the A ...
possesses around 17% of the world’s proven petroleum reserves. Apart from petroleum, the Kingdom’s other natural resources include natural gas, iron ore, gold, and copper.
In January 2007, Saudi Aramco
Saudi Aramco ( ar, أرامكو السعودية '), officially the Saudi Arabian Oil Company (formerly Arabian-American Oil Company) or simply Aramco, is a Saudi Arabian public petroleum and natural gas company based in Dhahran. , it is one of ...
's proven reserves were estimated at , comprising about 24% of the world total. They would last for 90 years at the current rate of production. 85% of Saudi oil fields found have not been extracted yet.
The Ghawar oil field
Ghawar (Arabic: الغوار) is an oil field located in Al-Ahsa Governorate, Eastern Province, Saudi Arabia. Measuring (some ), it is by far the largest conventional oil field in the world, and accounts for roughly a third of the cumulative ...
is the largest oil field in the world, holding over . Ghawar is able to produce per day of oil. Aramco announced per day expansion and integration with neighboring petrochemical plants in Ras Tanura and Yanbu by 2010 to 2012.
However, according to journalist Karen Elliott House
Karen Elliott House (born December 7, 1947) is an American journalist and former managing editor at ''The Wall Street Journal'' and its parent company Dow Jones. She served as President of Dow Jones International and then publisher of the Wall Str ...
, "some energy experts are convinced that current reserves are substantially lower than those officially claimed by Saudis and that the depletion rate is substantially faster."
According to a former senior executive of the state-run Aramco oil company Sadad Ibrahim Al Husseini
Sadad Ibrahim Al Husseini is a leading Saudi oil and gas industry expert. He is most widely known for his achievements during his tenure at Saudi Aramco as the Senior and Executive Vice President for Exploration and Producing, and his current wo ...
the country's real oil reserves are 40% lower than the official estimate of 716 billion barrels of oil. House states, "no convincing evidence ever has been provided to support the increase n Saudi oil reserves
N, or n, is the fourteenth letter in the Latin alphabet, used in the modern English alphabet, the alphabets of other western European languages and others worldwide. Its name in English is ''en'' (pronounced ), plural ''ens''.
History
...
And tellingly, in 1982 the kingdom and other OPEC oil producers ceased releasing production data by field. ... Finally, Saudi Arabia has not revised its reserve estimate since 1988, even though it has pumped somewhere between a day for the intervening two decades, for a total of nearly ."
New oil fields
New oil fields will add up to per day to production capacity by 2011. The new fields are Haradh, Khurais, Khusaniyah, Manifa, Neutral Zone (shared with Kuwait), Nuayyin and Shaybah I II & III.
Production
Saudi-Arabia is the major oil producer in the world accounting for 12.9% of the global production.[Key world statistics 2012]
IEA
Saudi Arabia produces over per day of oil, exporting per day. The government is investing over $71 Billion to increase oil production to near per day by 2009 and up to per day by 2015. This may be attributed to the report that of excess capacity are needed to compensate for a natural decline in availability.
The future of Saudi Arabian oil is complicated by the fact that the major Saudi oil fields are extremely old and have been producing oil for decades. Corrosion is becoming a large problem in addition to many other problems that come over time. The result is that most of the easily produced oil is gone from these fields and tapping the rest of the oil is probably going to be much more difficult and more expensive. Such increased difficulty and expense may indicate that Saudi Arabian oil fields have already peaked.
Shipping
The majority of the oil is shipped via supertankers
An oil tanker, also known as a petroleum tanker, is a ship designed for the bulk transport of oil or its products. There are two basic types of oil tankers: crude tankers and product tankers. Crude tankers move large quantities of unrefined crud ...
to refineries around the world. Three major ports are used for the shipping. Ras Tanura
Ras Tanura ( ar, رأس تنورة, Ra's Tannūrah, lit=cape oven, cape brazier, presumably due to the unusual heat prevalent at the cape that projects into the sea) is a city in the Eastern Province of Saudi Arabia located on a peninsula extend ...
is the world's largest offshore oil loading facility with capacity. The Ras al-Ju'aymah
Ras or RAS may refer to:
Arts and media
* RAS Records Real Authentic Sound, a reggae record label
* Rundfunk Anstalt Südtirol, a south Tyrolese public broadcasting service
* Rás 1, an Icelandic radio station
* Rás 2, an Icelandic radio stati ...
facility, on the coast of the Persian Gulf
The Persian Gulf ( fa, خلیج فارس, translit=xalij-e fârs, lit=Gulf of Persis, Fars, ), sometimes called the ( ar, اَلْخَلِيْجُ ٱلْعَرَبِيُّ, Al-Khalīj al-ˁArabī), is a Mediterranean sea (oceanography), me ...
, loads nearly 75% of the exports. The last of the three largest terminals is the Yanbu
Yanbu ( ar, ينبع, lit=Spring, translit=Yanbu'), also known simply as Yambu or Yenbo, is a city in the Al Madinah Province of western Saudi Arabia. It is approximately 300 kilometers northwest of Jeddah (at ). The population is 222,360 (2 ...
terminal located on the Red Sea
The Red Sea ( ar, البحر الأحمر - بحر القلزم, translit=Modern: al-Baḥr al-ʾAḥmar, Medieval: Baḥr al-Qulzum; or ; Coptic: ⲫⲓⲟⲙ ⲛ̀ϩⲁϩ ''Phiom Enhah'' or ⲫⲓⲟⲙ ⲛ̀ϣⲁⲣⲓ ''Phiom ǹšari''; T ...
. The enormous sea shipping capacity is vital to Saudi Arabia given the absence of international pipelines.
Export
For many years Saudi's ability to increase production of oil and stabilize price spikes led it to be compared to an international central bank and be called a "central bank of oil‘.[
]
Consumption
The Kingdom's consumption of its own oil production has steadily increased and it now consumes about one quarter of its oil production (approximately three million barrels per day).[ As of 2012 petrol in Saudi Arabia was sold at a price cheaper than bottled water—approximately US. According to Jim Krane, "Saudi Arabia now consumes more oil than Germany, an industrialized country with triple the population and an economy nearly five times as large."][ According to a report by Citigroup's analyst Heidy Rehman, "As a result of its subsidies we calculate 'lost' oil and gas revenues to Saudi Arabia in 2011 to be over $80 billion", adding that "at the domestic level, we believe the only real way to rationalize energy consumption would be to reduce subsidy levels."][
]
Aramco
Until 1973 the government did not receive a share of the oil drilled within its boundaries. In 1973 the Saudi government gained a 25% share of the interest from Aramco.[Saudi Aramco History]
/ref> In 1980 the Saudi government purchased nearly 100% of the Aramco oil business giving Saudi officials complete control over prices and production. In 1988 the oil company was renamed Saudi Aramco
Saudi Aramco ( ar, أرامكو السعودية '), officially the Saudi Arabian Oil Company (formerly Arabian-American Oil Company) or simply Aramco, is a Saudi Arabian public petroleum and natural gas company based in Dhahran. , it is one of ...
. The company is controlled by the government but also has a board of advisors and a CEO. The current CEO and President of Saudi Aramco is Amin H. Al-Nasser.
Future perspectives
The future prospects of energy in Saudi Arabia have been studied extensively by the King Abdullah Petroleum Studies and Research Center (KAPSARC). Furthermore, Saudi officials are not concerned about alternative energy sources hurting the market for its exports. In a recent interview with CBS
CBS Broadcasting Inc., commonly shortened to CBS, the abbreviation of its former legal name Columbia Broadcasting System, is an American commercial broadcast television and radio network serving as the flagship property of the CBS Entertainm ...
, they asked Saudi Arabia's oil minister the following question: "Let me be blunt, okay? And ask you to be candid: is it Aramco's hope to prevent a switch away from oil? Somebody said, 'The country is the oil business.' You absolutely need to do this for your own survival". The minister responded by stating that:
Yeah, we admit a fact that yes, we depend on the oil industry. We want it to help us, you know, to develop our economy and develop the economy of the world. So what is good for the wellbeing of Saudi Arabia should be good for the wellbeing of the world, too... we have to be realistic. We don't have the alternatives today
Saudi oil policy is shaped by multiple factors and as these factors change and/or as new information becomes available, Saudi Arabia's oil policy will also change.
Natural gas
Saudi Arabia has the world's fourth largest reserves of natural gas, of . One-third of this reserve is found in the Ghawar. Before the master gas system, the oil company flared (burned) the gas as it came from the oil well. Until recently production of natural gas was tightly controlled as it is so closely linked to oil production. The World Trade Organization
The World Trade Organization (WTO) is an intergovernmental organization that regulates and facilitates international trade. With effective cooperation
in the United Nations System, governments use the organization to establish, revise, and e ...
criticized the government and Aramco for heavily subsidizing natural gas. According to the Energy Information Administration
The U.S. Energy Information Administration (EIA) is a principal agency of the U.S. Federal Statistical System responsible for collecting, analyzing, and disseminating energy information to promote sound policymaking, efficient markets, and publ ...
the price was US. On January 1, 2016, the domestic price of natural gas was raised to .
In January 2020, Aramco announced a $1.85 billion investment to set up the first natural gas storage facility in Saudi Arabia. In 2019, a study presented that natural gas storage is only financially viable if Saudi Arabia meets its natural gas production target in 2030.
Also, in February 2020, Aramco initiated a plan to invest $110 billion to develop gas reserves in Al-Jafurah field, Al-Ahsa Governorate
, image_skyline =
, image_map = Alahsa map me.png
, mapsize = 220px
, map_caption =
, pushpin_map = Saudi Arabia
, pushpin_label_position =
, pushpin_map_alt =
, pushpin_map_caption =
, coordinates =
, subdivis ...
, to start production by 2024 to 2036 when fully developed, which is expected to hold of wet gas, per day of ethane
Ethane ( , ) is an organic chemical compound with chemical formula . At standard temperature and pressure, ethane is a colorless, odorless gas. Like many hydrocarbons, ethane is isolated on an industrial scale from natural gas and as a petr ...
and per day of gas liquids and condensates.
Electricity
Saudi Arabia is the fastest growing electricity consumer in the Middle East, particularly of transportation fuels. In 2005, Saudi Arabia was the world's 15th largest consumer of primary energy, of which over 60 percent was petroleum-based. The remainder was made up of natural gas.
Two ministries share responsibility for the energy sector: the Ministry of Oil and the Ministry of Water and Electricity. The Ministry of Water was created in 2001 by merging water related sub-departments. Its stated purpose is "to prepare a comprehensive plan to establish water and sewage networks all over the Kingdom. It will also develop the country's water policies and propose new regulations to preserve water." In 2003, this department was expanded.
Electricity consumption
Electricity consumption
Electric energy consumption is the form of energy consumption that uses electrical energy. Electric energy consumption is the actual energy demand made on existing electricity supply for transportation, residential, industrial, commercial, and o ...
in Saudi Arabia increased sharply during the 1990–2010 period due to rapid economic development. Peak loads reached nearly 24 GW in 2001—25 times their 1975 level-and are expected to approach 60 GW by 2023. The investment needed to meet this demand may exceed $90 billion. Consequently, there is an urgent need to develop energy conservation
Energy conservation is the effort to reduce wasteful energy consumption by using fewer energy services. This can be done by using energy more effectively (using less energy for continuous service) or changing one's behavior to use less service (f ...
policies for sustainable development.
Electricity generation is 40% from Oil 52% from Natural Gas and 8% from steam. Generation capacity is approximately 55 GW. A looming energy shortage requires Saudi Arabia to increase its capacity. Capacity is planned to be increased to 120 GW by 2032.
The government has approved the construction of a $300 million facility to turn waste into energy. The facility will process 180 tons of waste per day, producing 6 MW of electricity and of distilled water.
Conservation
Towards the end of 1998, the electricity sector embarked upon a major restructuring program. One of its aims was to achieve sustainable performance. Although progress has been made, remaining challenges, include high demand growth, low generation capacity reserve margins, inefficient energy use, absence of time-of-use rate adjustments, and the need for large capital investments to fund expansion.
Current sustainable policies, particularly those encouraging energy conservation, led to peak load savings of more than 871 MW in 2001, mainly as a result of collaboration between the Ministry of Water and Electricity and the Saudi Electricity Company.
Policies and programs are being developed for public awareness, energy regulation and legislation, and energy information and programming. If energy conservation is successful, demand can be reduced by 5–10%. This is equivalent to 3–6 GW of additional capacity, which represents a possible $1.5–3.0 billion saving over 20 years. Typically, investment in energy efficiency is 1% of utility sales revenues, which for a country like Saudi Arabia could be $15–60 million annually. If only savings on air conditioning are considered, the return on investment is equivalent to 400–500 MW of generating capacity—a saving of up to $0.25 billion p.a.
Bureaucratic history
The development of electricity in the Kingdom of Saudi Arabia can be divided into two stages:
Phase 1: Initially, electricity generation was left to small, local companies. Such companies sold power at varying rates according to local costs.
In 1961 (1381 AH), the Department of Electricity Affairs was established within the Ministry of Commerce, with a mandate to regulate the electricity generation sector and to issue permits and licenses to electricity companies and to encourage national investment.
In 1972 (1392 AH), the Department of Electricity Services was established. This Department was separated from the Ministry of Commerce and was given the additional responsibility of planning electrical services for the Kingdom as a whole.
In 1974 (1394 AH), the Ministry of Commerce was divided into the Commerce Agency and the Industry and Electricity Agency. In that same year, the electricity tariff was set for all companies at a level below their actual costs.
In 1975 (1395 AH), the Government adopted ambitious plans for economic development requiring investment in industry and electrification. The Ministry of Industry and Electricity was formed, with an Industrial Affairs Agency and an Electricity Affairs Agency. The Electricity Affairs Agency expanded the planning, co-ordination and regulatory roles for providing electrical services. The Electricity Corporation was established in 1976 (1396 AH) to coordinate the electricity plans contained in the Kingdom's Development Plan.
From 1976 to 1981 (1396 – 1401 AH) all community electricity generation was gradually subsumed under the four regional Saudi Consolidated Electricity Companies (SCECOs), located in the Central, Eastern, Southern and Western regions.
With the formulation of a coherent development plan and the establishment of the SCECOs, the Government was able to bring electricity to the towns, villages and settlements throughout the Kingdom.
The number of electricity customers grew from 216,000 in 1970 (1390 AH) to 3,035,000 in 1996 and 4,955,906 in 2006.
In May 2003, electricity was made the responsibility of the Ministry of Water and Electricity.
Saudi Consolidated Electricity Companies (SCECOs)
The first SCECO (SCECO-East) was created in 1976 (1396/97 AH). This was followed in 1979 (1399/1400 AH) by SCECO-South. Electricity for the southwest is provided by another consolidated company, and the central region is served by SCECO-Central.
The General Electricity Corporation (GEC) had overall responsibility for the Kingdom's electricity system and had direct responsibility for the provision of electrical supplies to rural areas not then covered by the consolidated companies. The GEC represented the government equity holdings in all the independent electricity generating companies and was a source of finance for those companies' capital requirements.
In 1998, the Government announced the reorganization of the electricity sector by establishing a stock market company, named the Saudi Electric Company, through the merger of all the electricity companies operating in the Kingdom.
Solar power
During the 2012 United Nations Climate Change Conference
The 2012 United Nations Climate Change Conference was the 18th yearly session of the Conference of the Parties (COP) to the 1992 United Nations Framework Convention on Climate Change (UNFCCC) and the 8th session of the Meeting of the Parties (CMP ...
in Qatar
Qatar (, ; ar, قطر, Qaṭar ; local vernacular pronunciation: ), officially the State of Qatar,) is a country in Western Asia. It occupies the Qatar Peninsula on the northeastern coast of the Arabian Peninsula in the Middle East; it sh ...
Saudi-Arabia announced its target to receive third of its electricity demand from solar power
Solar power is the conversion of energy from sunlight into electricity, either directly using photovoltaics (PV) or indirectly using concentrated solar power. Photovoltaic cells convert light into an electric current using the photovoltaic e ...
with 41GW of solar capacity by 2032. Same time was announced investment in 17 new nuclear reactors in next 20 years. Indeed, Saudi Arabia has been ranked the 6th in solar energy potential.
Nuclear power
In 2010, King Abdullah City for Atomic and Renewable Energy
The King Abdullah City for Atomic and Renewable Energy (K.A.CARE) Is an scientific, research and governmental entity in the Kingdom of Saudi Arabia that is legally independent chaired by the Minister of Energy, which deals with the issues of nuc ...
was established. The Saudi government plans a $100 billion program of nuclear power with the goal of generating 110 gigawatts by 2032, using at least 12 nuclear power plants which are intended to begin coming into operation in 2019. They have been negotiating with France, China, Japan, Korea, Russia, and Argentina over access to nuclear technology.
The nuclear ambitions of the Kingdom of Saudi Arabia have led to heightened concern in the United States Congress, especially since the crown prince of Saudi Arabia Mohammed bin Salman
Mohammed bin Salman Al Saud ( ar, محمد بن سلمان آل سعود, translit=Muḥammad bin Salmān Āl Su‘ūd; born 31 August 1985), colloquially known by his initials MBS or MbS, is Crown Prince and Prime Minister of Saudi Arabia. H ...
, claimed in 2018 that the country will immediately follow suit if regional rival Iran
Iran, officially the Islamic Republic of Iran, and also called Persia, is a country located in Western Asia. It is bordered by Iraq and Turkey to the west, by Azerbaijan and Armenia to the northwest, by the Caspian Sea and Turkmeni ...
developed a nuclear bomb. A 17 September 2020 publication by The Guardian claimed that Saudi Arabia holds enough reserves to mine uranium ore to produce nuclear fuel, raising concerns regarding the Gulf nation's interest in the atomic weapons
A nuclear weapon is an explosive device that derives its destructive force from nuclear reactions, either fission (fission bomb) or a combination of fission and fusion reactions ( thermonuclear bomb), producing a nuclear explosion. Both bom ...
program. The source of the information was a report compiled by the Beijing Research Institute of Uranium Geology (BRIUG) and China National Nuclear Corporation (CNNC) that have been working for the Saudi Geological Survey.
Business persons
''Forbes
''Forbes'' () is an American business magazine owned by Integrated Whale Media Investments and the Forbes family. Published eight times a year, it features articles on finance, industry, investing, and marketing topics. ''Forbes'' also re ...
'' ranked Mohammed Al Amoudi
Mohammed Hussein Ali Al-'Amoudi ( ar, محمد حسين علي العمودي; born 1946) is a Saudi billionaire businessman. He was born Ethiopia in 1946 to a Yemeni father from Hadhramaut and Ethiopian Amhara mother from Wollo.
In 201 ...
as richest Saudi Arabian in energy business in 2013.
Carbon dioxide emissions
Saudi Arabia
Saudi Arabia, officially the Kingdom of Saudi Arabia (KSA), is a country in Western Asia. It covers the bulk of the Arabian Peninsula, and has a land area of about , making it the fifth-largest country in Asia, the second-largest in the A ...
was the 15th top carbon dioxide
Carbon dioxide (chemical formula ) is a chemical compound made up of molecules that each have one carbon atom covalently double bonded to two oxygen atoms. It is found in the gas state at room temperature. In the air, carbon dioxide is transpar ...
emitter per capita in the world in 2009: 18.56 tonnes per capita.[World carbon dioxide emissions data by country: China speeds ahead of the rest]
Guardian 31 January 2011
See also
* Economy of Saudi Arabia
The economy of Saudi Arabia is the largest in the Arab world, Middle East and the eighteenth largest in the world. A permanent and founding member of OPEC, the OPEC, Saudi Arabia is also a member of the G20 forum as one of the world's largest ...
* List of power stations in Saudi Arabia
This article lists all power stations in Saudi Arabia.
Fossil fuel
Natural gas turbine
Oil-fired
Renewable
Solar
Wind
Storage
Pumped hydroelectric
See also
*Energy in Saudi Arabia
References
{{Power statio ...
* Saudi Arabia energy law
* Saudi Association for Energy Economics
References
*
{{Middle East topic, Energy policy of
Saudi Arabia
Saudi Arabia, officially the Kingdom of Saudi Arabia (KSA), is a country in Western Asia. It covers the bulk of the Arabian Peninsula, and has a land area of about , making it the fifth-largest country in Asia, the second-largest in the A ...
Petroleum industry in Saudi Arabia
Saudi Arabia articles needing attention