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Saudi Oil: The Threat From Within – OpEd

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By Abdel Azizi Aluwaisheg

Oil consumption in Saudi Arabia is the highest in the world, despite the fact that the economy is not heavily industrialized. According to International Energy Agency (IEA), Saudi Arabia consumes about three million barrels a day or about one billion barrels each year.

If you divide that total by a population of 27 million people, oil consumption would amount to about (40) barrels per person each year, the highest per capita in the world. To put that in perspective, that rate is more than four times the rate of oil consumption in the United States, five times the rate of South Korea, and eight times the rate of consumption in Japan!

What is more alarming is that while industrialized countries’ usage has been falling, ours has been growing. In the United States, which used to be criticized for its oil guzzling ways, per capita oil consumption has fallen from (11) barrels a day in 2005 to less than (9.5) barrels a day, a decline of about 14 percent in five years. Japan’s usage has declined from (7) barrels to around (5) barrels during the past decade, a decline of 25 percent.

By comparison, consumption of oil in Saudi Arabia has jumped from around (30) to over (40) barrels a day, during the past decade, or 33 percent increase. Some estimates for the growth rate put it as high as 5 percent annually. If current trends continue, some experts expect Saudi domestic consumption to top seven million barrels a day by 2030!

I have used IEA figures to make it easier to make comparisons. National figures may differ somewhat, but the main trends are the same: We have probably the highest rate of oil consumption in the world, per capita, despite the fact that we are not the most industrialized country. In addition, while oil consumption in industrial counties is on the decline, ours is growing rapidly.

What does that mean? In simple terms, every barrel of oil consumed within the country deprives it of revenue it could make by selling it abroad. How much is that? By simple arithmetic, if we consume one billion barrels a year, as IEA figures indicate, that is a loss of $125 billion a year at the current price of oil of $125 per barrel (brent).

Since oil is essential for modern life, some oil consumption is necessary. If we were to consume, for example, at the same rate as Japan, that would still save us about $110 billion a year.

But the story gets “curiouser and curiouser.” Not only are we wasting economic resources for the economy as a whole, but the public treasury is being deprived of huge revenues, year by year, by increased domestic consumption. What is even sadder is that abundant oil at low prices has not encouraged consumers to apply proper conservation measures. More pollution is shown time and again to be closely related to bad health. Consequently, health costs rise with higher pollution levels. Since most health care is provided by the government, which is another additional burden on the public treasury, on employers who provide health insurance, or on average citizens if they pay for health care by themselves.

Cheap oil may seem like a blessing, but it is in fact contributing to a tragedy in the making. At current rates of consumption, we are depriving the country of precious resources that can never be replenished, and causing the loss of hundreds of billions of dollars in potential export earnings. Those lost revenues could be used to improve standards of living and save oil and wealth to the next generations. Over consumption of oil is a leading cause for pollution, with disastrous health consequences.

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Arab News

Arab News is Saudi Arabia's first English-language newspaper. It was founded in 1975 by Hisham and Mohammed Ali Hafiz. Today, it is one of 29 publications produced by Saudi Research & Publishing Company (SRPC), a subsidiary of Saudi Research & Marketing Group (SRMG).

One thought on “Saudi Oil: The Threat From Within – OpEd

  • March 11, 2012 at 1:26 pm
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    Cliff Ricketts recently drove a car from Savannah Georgia to Long Beach California for less than three gallons of fuel.He drove with a group of people that were from MTSU Middle Tennessee State University. That’s where Cliff is a teacher, a professor of agriculture.
    What has happened again durting a 30 year period prior to just a few days ago, is tht the uS has not adopted the wholesome policy, but chosen the ones that granted the Members of Congress the better rating for their ability to tax.
    Neither has industial giants or the manufactureers in Detroit Michigan appeared the least bit impressed with about 1000 miles per gallon fuel stickers on their vehicles.
    India would be more than impressed and so would some genuinely religious people around the globe.
    The uS government made an agreement with Saudia Arabia to pay at least 80 dollars a barrel for their oil and purchase the amounts they signed for in a contract that is more important to the members of Congress than the welfare of their own people or their own Mothers…Jimmy Carter did not sign the contract, but the ones that followed him did.
    Stupid people will always appear as the stupid look and also end as performing what the stupid ones always have done through-out history. I call stupidity being mentally ill…and due to the fact I do not have to be a politician to qualify as a uS citizen, I can call them all ill if I so choose to do so…and end actually helping them all. Mental illness is cureable…by usually just placing the individual in good surroundings or a good, wholesome invironment.The ones that are physically ill may be ill due to living in pollution for too many generations or years.
    Surmised..the uS government is practicing bull-you know what!
    Smile, and everyone have a wonderful day…Good article.

    Reply

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