GRM 2010 GRM 2011

Abstract Details

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The Energy Challenge of the Post-Oil GCC
Paper Proposal Text :
As well as being a major producer of energy sources (e.g., oil and gas) the GCC region is also a major consumer of energy. This is due to a number of factors such rapid economic and infrastructural projects, very warm climates and increasing demands for desalinated water.

Growth patterns in the GCC countries suggest that demand for energy is likely to increase in the years to come. This situation ultimately means that more of the region’s natural resources will be devoted to meeting this demand. For some of the GCC countries the option to meet future power demands through nuclear-generated energy seemed an attractive proposition. The UAE is the prime example. The rationale is that by using nuclear power for generating energy for local use there will be less reliance on the “valuable” and “finite” fossil resources. With few major discoveries of oil and gas in the world and a growing world population (exacerbated by countries such as China and India) fossil fuel prices are more likely to continue to rise.

Furthermore, real investments and plans to use other alternative energy sources such as solar and hydrogen are also gaining momentum in the region. However, recent developments in the technology used for extracting natural gas (and oil) from shale rock formations (known as “hydraulic fracturing” or fracking”) may put a big question mark on the progress of the GCC countries in their efforts to develop alternative sources of energy and preserve what remains of their highly valued natural resources. The new technology involves injecting millions of gallons of water, sand and chemicals to shatter underground shale rock formations and unlock the natural gas and/or oil contained within those rocks. The world is full shale rocks, not least in the USA which is predicted, according to some analysts, to be the new Saudi Arabia (albeit on much bigger scale). This new development will have implications for future oil and gas prices (likely to retreat) and the current large GCC investments in nuclear and other sources of energy. Undermining the region’s source of wealth could prove to be a very challenging experience for this region. This article examines the GCC’s new drive towards alternative sources of energy and explores the potential of depriving this region of its source of wealth and indeed stability.