The official Saudi Press Agency (SPA) reported that King Abdullah has ordered a halt to new oil exploration to preserve the Kingdom’s vast hydrocarbon resources.

“I told them the Cabinet that I have ordered a halt to all oil explorations so part of this wealth is left for our sons and successors,” King Abdullah told Saudi scholars studying in Washington.  However, a senior oil ministry official told Zawya Dow Jones that the King’s words should not be interpreted as a full-fledged ban, but rather as a warning that future explorations should be carried out mindfully with an eye towards future generations.

Saudi Arabia possesses the world’s largest recoverable oil resources with 260.1 billion barrels at the end of 2009.  It is the largest member of the Organization of Petroleum Exporting Countries (OPEC) and recently announced the discovery of a new oil field and a non-associated gas field to add it its substantial holdings.  Saudi Arabia pumped an average of 8.26 million barrels a day in June 2010, about 209,000 barrels above its target.

Read more here…

In a remarkable new discovery, a small team of U.S. Pentagon officials and American geologists have found massive reserves of iron, copper, cobalt, gold and other essential metals like lithium in Afghanistan. All together, these mineral deposits could be worth nearly $1 trillion dollars, and could transform Afghanistan into a preeminent mining center, attracting investors from all over the world.

The iron and copper discoveries that have been made so far are substantial enough to turn Afghanistan into one of the world’s major producers of both valuable substances.

In addition, geologists believe dry salt lakes in western Afghanistan may contain lithium deposits large enough to rival those of Bolivia, which possesses the world’s largest known reserves.  An internal Pentagon memo says with these discoveries, Afghanistan could turn into the “Saudi Arabia of lithium.”  Lithium is an essential element used widely in high-tech production; a necessity for computer chips to batteries to wind turbine components.

Although he concedes that developing these reserves will take time and money, General David H. Petraeus, commander of the United States Central Command, says there is “stunning potential here” and that this discovery has the potential to transform the Afghan economy, which thus far has centered around opium production and the drug trade.

Read the full article here…

Oil and gas major Total and Spain-based solar company Abengoa Solar have been appointed to construct the largest concentrating solar power (CSP) plant in the world in Masdar, the carbon-zero city and renewable energy initiative of Abu Dhabi.  Abu Dhabi aims to achieve 7% renewable energy generation by 2020.

Called “Shams 1,” this planned CSP plant will extend over an area of 2.5 square km and have a generation capacity of approximately 100MW.  Once completed, it will be the first of its kind in the Middle East region, and the first CSP plant to be registered with the United Nation’s Clean Development Mechanism (CDM).  This registration will make Shams 1 eligible for carbon credits.

“This project, which will be the first utility-scale, commercial solar power project in the UAE, represents the translation into reality of the vision the Abu Dhabi leadership had for renewable energy in the Emirate,” said Dr. Sultan Al-Jaber, CEO of Masdar.  Looking ahead, Abengoa Solar’s director of international development Michael Geyer believes this project is only the beginning.  “The Middle East,” he said,  “is a region that offers both an unlimited solar resource and infinite site locations for implementation of solar plants in its deserts.”

Read more here…

With domestic energy demand expected to grow almost 250% by 2028, Saudi Arabia must plan strategically to meet its future needs.  The desert kingdom is looking to renewable energy – specifically solar – to play a bigger role in its domestic energy mix.  Saudi Arabia is aiming generate between 10-20% of its energy from renewables by 2020.

In a recent statement, Saudi Aramco CEO Khalid A. Al-Falih warned “if no efficiency improvements are achieved, and the business is as usual, the oil availability for exports is likely to decline to less than seven million barrels per day by 2028, a fall of three  million barrels per day while the global demand for our oil continues to rise.”

The Kingdom is planning to invest nearly $80 billion to boost its power supply to 60,000MW, with solar energy likely to be the largest new contributor.  By 2020, solar technology could satisfy up to 5GW of Saudi Arabia’s total energy demand.

Saudi Arabia is reportedly in talks with Abu Dhabi’s carbon-free Masdar City initiative regarding a possible future collaboration.

Read the full article here…

At first glance, Saudi Arabia may seem an unlikely supporter of renewable energy, considering the vast oil resources under its control.  On the contrary, Saudi Arabia is looking to take advantage of its other prolific resource – sunlight – with new solar power projects designed to keep the country competitive as renewables increasingly play a role in the overall energy mix.

Mohammed Y. Al-Qahtani, executive director of petroleum engineering and development at Aramco believes “renewables will have an important place in the total energy equation.”   Saudi Arabia is looking to use its substantial solar resources as a substitute for oil to generate power domestically as well as to power desalination plants.  Although solar is currently more a more expensive means of power generation than oil or gas, Al-Qahtani expects this will shift over time.

The Kingdom recently invested in one of the world’s largest solar-heated complexes at a school in the northwestern part of the country, and is considering participating in the Desertec Initiative which would transmit electricity from North Africa and Middle Eastern solar power plants to Europe.

Read more here…

Abu Dhabi-based Masdar has begun drilling on what will be the first geothermal project in the Middle East region.

Masdar, which was founded in 2006 to advance research, development and commercialization of renewable energy and clean technologies, has employed an Australian company to do preliminary drilling for subterranean geothermal energy sources such as steam or hot water.  Two wells have been drilled so far, with potentially more to come.

Masdar reportedly is planning to invest around $11billion into this venture, and aims to produce 5MW of power to power the air conditioning systems in MaAbu-sdar City.  Masdar City is the world’s first carbon-neutral zero waste city, and is the global headquarters of the International Renewable Energy Agency (IRENA).

Read more…

Anticipating a growth in global oil demand, OPEC leaders agreed to keep production levels stable at 24.84 million barrels per day (bpd), even though many member nations such as Saudi Arabia have been consistently overreaching those targets.

“Good demand, reliable supply, beautiful prices – we are very happy,” remarked Saudi Arabian Oil Minister Ali al-Naimi, who expects global demand to pick up by “about a million barrels” per day in the latter half of the year, largely due to rapid growth from Asia.

Even though the International Monetary Fund (IMF) predicts China’s economy will expand by 10% this year, the nation’s rising inflation may prompt new actions to limit credit that may also negatively impact the oil market.  OPEC President Germanico Pinto addressed this point in a speech delivered before the meeting, admitting “there is still a long way to go before we can feel at ease with the situation.”

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Under the leadership of Chief Executive Khalid Al-Falih, Saudi Arabia’s gigantic national oil company Saudi Aramco is planning a $90 billion expansion in new oil and gas projects over the next five years.

Saudi Aramco is investing $10 billion into the Manifa field, which will involved the construction of 27 islands in a section of the Arabian Gulf.  The increased output from this massive reserve will offset the declining production in the aging Ghawar field.

At one point Ghawar, which is the largest oilfield ever discovered, had a production capacity of over 5 million bpd, however in recent years Saudi Aramco has had to inject the field with millions of barrels of water to extract the oil.  Al-Falih denies accusations that Ghawar has reached its peak, saying that the giant field “still has recoverable reserves equivalent to 55 billion barrels.”

China’s growing influence was a major point of discussion for the Al-Falih, who mentioned that over the past few months more Saudi oil was shipped to China than to the United States.  ”The U.S. has plateaued or certainly will not be growing at the same rate.  But the U.S. will remain the largest market for oil for decades to come,” he predicted.

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Energy consumption from the developing world is to overtake that of the developed economies by 2015 – some countries are addressing it, some are still in denial. The article below is just a taste of things to come and illustrates how even the oil producing UAE is aware of these issues.

The UAE signed a deal in December 2009 with a Korean consortium to build four nuclear power reactors in the UAE, with the first scheduled to be operational in 2017.
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Electricity demand is likely to triple in the UAE by 2020 and nuclear energy will play a key role in meeting future needs, a top official has said.

UAE Foreign Minister Sheikh Abdullah bin Zayed Al Nahyan said the country’s interest in developing nuclear energy was “motivated by the need to develop additional sources of electricity to meet future demand projections and to ensure the continued rapid development of its economy”.

“Analysis conducted by official UAE entities has concluded that national annual peak demand for electricity is likely to triple by 2020, reflecting a cumulative annual growth rate of roughly 9 percent,” he said in comments published by news agency WAM.

He added: “In evaluating different options to meet this demand, nuclear energy emerged as a proven, environmentally promising and commercially competitive option which could make a significant contribution to the UAE’s economy and future energy security.”

China and India have formally agreed to ratify the Copenhagen Accord, the global climate agreement which stemmed from last year’s U.N. climate change convention in Copenhagen.

Over 100 countries have already approved the Accord, which aims to limit the increase in global temperatures to no more than 2 degrees Celsius, or 3.6 degrees Fahrenheit, above pre-industrial levels.  The Accord also calls for spending on the scale of $100 billion a year to assist emerging countries in making adaptations to climate change.

China and India are two of the world’s fastest growing economies, and in recent years their rates of energy consumption and carbon dioxide emissions have skyrocketed.  By joining the Accord, China and India have added legitimacy to the treaty and have demonstrated to the rest of the world that they are serious about addressing these important climate issues.

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The United States still leads in worldwide demand for oil, but at the rate China and the rest of Asia are growing, it may not hold that title for long.

The combination of economic stagnation and increased efficiency measures lead many analysts to believe any recovery in U.S. demand will happen slowly.  Since reaching peak levels in 2005, U.S. oil imports have fallen over the past two years by 9%.

China’s oil imports, on the other hand, rose by 14% last year.  This demand growth has impacted China’s relationship with Saudi Arabia, its main supplier.

Chinese purchases from the oil-rich Kingdom hit a record high of 1.2 million barrels per day (mbpd) in December of last year.  Saudi oil minister Ali Al-Naimi predicts “Asia will be a huge market,” and says the Kingdom is leasing new storage facilities in Japan for easier shipments to Asian customers.

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Michael Kanellos of Greentech Media reports Saudi Arabia’s King Abdulaziz City for Science and Technology has begun work on a solar-powered desalination plant.

Population and industry demands combined with Saudi Arabia’s arid climate have placed great strain on local water resources.  As a result, Saudi Arabia has grown into the world’s largest producer and consumer of desalinated water.  Currently, the Kingdom accounts for 18% of desalinated water worldwide.

Because desalination plants are high energy consumers, it could turn out to be quite expensive to power such a plant via solar panels.  However, the oil-rich nation has been taking active steps towards alternative energy technologies, and it will be interesting to see how this project develops, says Kanellos.

Read more here…

World oil demand may rise higher than previously expected, says the International Energy Agency (IEA), the Paris-based energy advisor to 28 OECD nations.  The IEA’s 2010 oil demand estimate is now 1.6 million barrels per day (bpd), 120,000 barrels higher than previously predicted.

The IEA attributes the majority of this growth to demand from developing nations.  ”The demand growth is all coming from countries east of Suez,” said David Fyfe, head of the IEA’s oil industry and market’s division.  ”The emerging economies of China, India and the rest of Asia and the Middle East is where all the action is.”

Oil demand in developed nations, on the other hand, has hit a wall as consumers have moved away from oil as a power and heating fuel.  There may be some increased demand for transportation fuels and petrochemicals in industrialized nations, but overall demand will not compare to the 6.1% market growth predicted in booming emerging nations.

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Global Fund Exchange founders, Lauralouise Duffy and Anric Blatt first met WBCSD President
Björn Stigson in Sharjah, UAE  at the Sharjah Chamber of Commerce in 2009 and have been keen supporters of his organization since. The World Council for Sustainable Development produces some excellent reports like the one below and we would like to encourage you to visit their website at http://www.wbcsd.org/

New downloadable report

Copenhagen, 9 December 2009 – The relationship between land use and climate change is highlighted in corporate case studies included in a new report, entitled Tackling climate change on the ground ( 4.3 MB), released by the World Business Council for Sustainable Development

Land-use activities are a major source and sink of global greenhouse gas (GHG) emissions. Curbing deforestation and applying sustainable land-use management practices can reduce GHG emissions, while planting trees and managing forests can help remove GHGs (mainly CO2) from the atmosphere by sequestering them in plants and vegetation.

Examples of cases in the report include: developing new crop varieties that have less environmental impacts and can adapt to climate change, or products that help reduce emissions; using techniques like direct seeding and drip irrigation to reduce water use in dry regions, or keeping soils healthy so they store more carbon; and developing models and tools to find practical ways to reduce impact and prepare for the future.

The various cases demonstrate that t here is no single, globally applicable sustainable management solution for land use. Business is only part of the solution and must work with governments, civil society and others to develop a range of land-use approaches that tackle climate change.

Download

• Tackling climate change on the ground – Corporate case studies on land use and climate change ( 4.3 MB)

Word from the 3rd World Future Energy Summit in Abu Dhabi

A monumental shift is taking place in the debates over energy and climate change. Nowadays nobody is asking whether clean energy should be adopted or whether climate change is really happening. Every country in every region is enthusiastically searching and adopting renewable energy as they are convinced of the impact of indiscriminate fossil fuel burning on the environment and climate,’’ Olafur Ragnar Grimsson, President of Iceland said in his keynote address at the concluding  session of the Summit.

“The humanity is facing a financial crisis, a humanitarian crisis emerging out of the lack of means for subsistence for vast sections of people and an ecological crisis. Renewables have an important contribution to make in addressing all these forms of crises,’’ Prince Albert Alexander, Louis Pierre of Monaco, Marquis of Baux said in his keynote address.”

Global Fund Exchange hosted an information booth at the 2009 World Future Energy Summit, presented by Anric Blatt, Lauralouise Duffy and Sachin Hirani

Day 1 Newsletter Handed out to delegates

Day 2 Newsletter Handed out to delegates

Day 3 Newsletter Handed out to delegates

The Organization of Petroleum Exporting Countries (OPEC) agreed to maintain steady production levels after gathering to meet in Angola today.

After calling oil’s current barrel price range of $70-$80 dollars “perfect,” Secretary General Abdullah el-Badri said production increases for 2010 “are not on our radar at this time.”  El-Badri  also told reporters he was concerned about sub-par compliance among member nations, and wants to see production compliance aclimb back to 75-80% range.

Most notably, OPEC economists acknowledged a “permanent loss in oil demand in the OECD and a slower rate of growth on non-OECD” due to the economic crisis in a presentation given to journalists.

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After a tense two weeks of negotiations and over two years of preparatory talks, delegates at the COP15 Copenhagen Climate Summit finally formulated a global agreement, reinforcing the need for strong international action on climate change issues.

The Copenhagen Accord is a non-binding agreement between developed and developing nations which aims to cap overall temperature rise to within 2° Celcius.  Over the next three years, $30 billion in financing from developed nations will help support emissions reductions projects in some of the world’s poorest countries.  Developed nations are working towards a long term, $100 billion a year financing plan by 2020.  Read more about the Copenhagen Accord…

The Copenhagen Accord is not a legally binding agreement, and many delegates are frustrated with the underwhelming results of the talks.  World leaders like Barack Obama, on the other hand, called the accord “an important breakthrough,” but stressed that much more action is needed to truly address the global threat of climate change.  Read more about world responses to the conference…

Gulf monetary union agreement enacted, Kuwait says

KUWAIT (Reuters) – Gulf Arab countries enacted a monetary union agreement on Tuesday despite the absence of major player the United Arab Emirates and fellow oil producer Oman.

The central bankers from four states in the union — Saudi Arabia, Kuwait, Qatar and Bahrain — will now set a timetable for the creation of a joint central bank, Kuwait’s finance minister told state news agency KUNA without giving details.

Mustapha al-Shamali expressed hope the UAE and Oman would rejoin the planned union in the near future, but did not give more details about his country’s drive to secure their return during its 2010 presidency of the Gulf Cooperation Council.

The UAE, the second-largest Arab economy after Saudi Arabia, pulled out of the long-planned project in May, casting doubt on its viability.

Oman, a non-OPEC oil producer, abandoned the project in 2006, saying it could not meet the original 2010 deadline.

Analysts did not expect the two countries to come back at this week’s Gulf rulers’ summit in Kuwait, but they said the UAE, which quit over a disagreement with the Saudis about the location of the central bank, could rejoin at a later date.

“The loss of the UAE to the monetary union was undoubtedly a considerable blow given it is the second-largest GCC market and a reasonably diversified one, so it is understandable that Kuwait should wish to see the UAE return to the project,” said Emilie Rutledge, a professor at the UAE University.

Central bank governors of the four countries will have equal voting rights in the monetary council, a forerunner for the joint regional central bank, an official from the GCC secretariat told reporters on the sidelines of the summit.

Analysts are closely watching nominations to the new monetary authority for signs of concessions by Saudi Arabia, the world’s largest oil exporter, which might pave the way for a return of the UAE at a later stage.

(Reporting by Eman Goma, Raissa Kasolowsky and Rania Oteify; Writing by Martin Dokoupil; Editing by Inal Ersan and Hugh Lawson)

© Thomson Reuters 2009 All rights reserved

Saudi Arabia’s Minister of Water and Electricity Abdullah Al Hussayen announced plans to build a large-scale desalination and power generation plant to provide more resources for the desert kingdom.

The plant will be capable of desalinating 1 million cubic meters of water annually, and will generate 1000MW of power each year.  It is estimated that 14,000 large-scale desalination plants of this type are in operation worldwide, with a total installed capacity of 10.5 billion gallons of water per day.

“There has been no breakthrough in the cost of desalination,” said Al Hussayen.  Desalination costs have risen 33% recently, and the technology is “beyond the affordability” of most of the world’s water-strapped population.  ”The solution,” he said, “is reducing per capita consumption in municipal use.”

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