At the triennial World Petroleum Congress in Qatar, a handful of representatives from Middle Eastern OPEC nations have indicated that their countries are beginning to take steps to reduce their own dependence on oil due to the effects of carbon emissions on the earth’s atmosphere. OPEC member nations in the Middle East use oil to generate electricity and also sell gasoline domestically at prices far below market value.

Saudi Arabia, in particular, has revealed ambitious plans to install enough solar power generation to create 10% of the country’s demand for electricity by 2020. If the Saudis have more of anything than oil, it’s sunshine, so the initiative makes a certain amount of sense.

But what is really driving the sudden interest in alternative fuel is the rising cost of oil and, very likely, a slowdown in OPEC’s ability to increase production. Saudi Arabia generates about 50% of its electricity from burning oil, using about 13% of the crude it produces. That 13% is far more valuable as an export than as a fuel for a power plant.

Some members also said they may start capturing the associated natural gas from their production wells. Currently the gas is simply flared off, as it has been for decades.

While OPEC’s plans for developing alternative energy sources should be welcomed, the real reason for the move has more to do with capturing more revenue from exported oil than it does with greening the planet.

Paul Ausick

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