The international oil and gas industry experienced a correction of perception in Saudi Arabia last week when delegates at a conference heard that the kingdom is going nuclear.
"We have started to take the required steps to utilize several energy sources locally, in particular solar and nuclear energy," said Saudi Arabia's Minister of Petroleum and Mineral Resources Ali I. Al-Naimi.
That may have come as a surprise from the country that leads the world's oil reserves. But it's not the first time Al-Naimi has indicated the kingdom's determination to explore alternative energy.
Last November, in a speech delivered at Singapore International Energy Week, Al-Naimi underscored Saudi Arabia's commitment to "researching, commercializing, and manufacturing promising sources"—including nuclear energy.
Energy diversity
"This energy diversity is reflected in the newly established King Abdullah City of Atomic and Renewable Energy, a cooperative program for the investigation of those sources," Al-Naimi said in Singapore.
Don't imagine that the Saudis are running out of oil, something else that Al-Naimi cleared up, when he reminded the Singapore conference that his country has massive proved reserves.
"As the world's leading supplier of oil with 264 billion bbl of proved oil reserves, at current production levels the kingdom could continue to supply crude oil for another 80 years, even if we never found another barrel," he said.
"In fact, even though we produced 62 billion bbl of oil between 1990 and 2009, our reserves have not decreased. Through new discoveries and improved recoveries, we are adding as much oil as we are producing every year," Al-Naimi said.
Still, there are other realities to be considered, including increased domestic demand for oil—a point that Saudi energy officials have recently underlined.
Rising domestic demand
"The total domestic energy demand is expected to rise from about 3.4 million boe/d in 2009 to 8.3 million boe/d in 2028, or a growth of 250%," Saudi Aramco Pres. and Chief Executive Khalid A. Al-Falih said last April.
At that rate, he said, "the oil availability for exports is likely to decline to less than 7 million b/d by 2028, a fall of 3 million b/d while the global demand for our oil will continue to rise."
In short, rising domestic demand alone "will ultimately limit the export capacity of the kingdom, and of development," said Hashem Yamani, director of the King Abdullah City for Atomic and Renewable Energy.
"That is why we are determined to transform a country dependent solely on oil to different sources of energy—nuclear and renewable," Yamani said last week, adding that Saudi Arabia could produce renewable energy within 8-10 years and nuclear energy by 2020.
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