Energy in Saudi Arabia
Encyclopedia
World energy resources and consumption
]World energy consumption in 2010: over 5% growthEnergy markets have combined crisis recovery and strong industry dynamism. Energy consumption in the G20 soared by more than 5% in 2010, after the slight decrease of 2009. This strong increase is the result of two converging trends...
and electricity
Electricity generation
Electricity generation is the process of generating electric energy from other forms of energy.The fundamental principles of electricity generation were discovered during the 1820s and early 1830s by the British scientist Michael Faraday...
production, consumption and export in Saudi Arabia
Saudi Arabia
The Kingdom of Saudi Arabia , commonly known in British English as Saudi Arabia and in Arabic as as-Sa‘ūdiyyah , is the largest state in Western Asia by land area, constituting the bulk of the Arabian Peninsula, and the second-largest in the Arab World...
.
Saudi Arabia
Saudi Arabia
The Kingdom of Saudi Arabia , commonly known in British English as Saudi Arabia and in Arabic as as-Sa‘ūdiyyah , is the largest state in Western Asia by land area, constituting the bulk of the Arabian Peninsula, and the second-largest in the Arab World...
is one of the world's largest energy producers, pumping approximately 10.782 Moilbbl/d of petroleum. While most of this is exported, domestic use is rapidly increasing, primarily for electricity production.
Saudi Arabia's economy is petroleum-based; roughly 75% of government revenues and 90% of export earnings come from the oil industry. The oil industry produces about 45% of Saudi Arabia's gross domestic product, against 40% from the private sector. Saudi Arabia has per capita GDP of $20,700. The economy is still very dependent on oil in spite of a diversification effort, in particular in the petrochemical
Petrochemical
Petrochemicals are chemical products derived from petroleum. Some chemical compounds made from petroleum are also obtained from other fossil fuels, such as coal or natural gas, or renewable sources such as corn or sugar cane....
sector, with Sabic.
Reserves
Nationally, the highest proved oil reserves are in Saudi Arabia (18 % of global reserves, over 260 Goilbbl). Proved natural gas reserves in Saudi Arabia are over 7 cubic metres (2,472 cu ft). Global production in 2009 reached 29 Goilbbl of oil and 3 cubic metres (1,059.4 cu ft) of natural gas.Overview
| Energy in Saudi Arabia | ||||||
|---|---|---|---|---|---|---|
| Capita | Prim. energy | Production | Export | Electricity | CO2-emission | |
| Million | TWh | TWh | TWh | TWh | Mt | |
| 2004 | 24.0 | 1,633 | 6,469 | 4,811 | 148 | 324 |
| 2007 | 24.2 | 1,748 | 6,412 | 4,606 | 175 | 358 |
| 2008 | 24.7 | 1,879 | 6,734 | 4,796 | 187 | 389 |
| 2009 | 25.4 | 1,836 | 6,145 | 4,324 | 199 | 410 |
| Change 2004-2009 | 6.0 % | 12.4 % | -5.0 % | -10.1 % | 34.5 % | 26.3 % |
| Mtoe = 11.63 TWh, Prim. energy includes energy losses | ||||||
Domestic consumption
Saudi Arabia is the fastest growing electricity consumer in the Middle East, particularly of transportation fuels. In 2005, Saudi Arabia was the world's 15th largest consumer of primary energy, of which over 60 percent was petroleum-based. The remainder was made up of natural gas.Two ministries share responsibility for the energy sector: the Ministry of Oil and the Ministry of Water and Electricity. The Ministry of Water was created in 2001 by merging water related sub-departments. Its stated purpose is "to prepare a comprehensive plan to establish water and sewage networks all over the Kingdom. It will also develop the country’s water policies and propose new regulations to preserve water." In 2003, this department was expanded.
Electricity consumption
Electricity consumption in Saudi Arabia increased sharply during the 1990–2010 period due to rapid economic development. Peak loads reached nearly 24 GW in 2001—25 times their 1975 level-and are expected to approach 60 GW by 2023. The investment needed to meet this demand may exceed $90 billion. Consequently, there is an urgent need to develop energy conservation policies for sustainable development.Electricity generation is 65% from Oil 27% from Natural Gas and 8% from steam. Generation capacity is approximately 30 GW. A looming energy shortage requires Saudi Arabia to increase its capacity.
The government has approved the construction of a $300 million dollar facility to turn waste into energy. The facility will process 180 tons of waste per day, producing 6 MW of electricity and 250000 gallons (946.4 m³) of distilled water.
Conservation
Towards the end of 1998, the electricity sector embarked upon a major restructuring program. One of its aims was to achieve sustainable performance. Although progress has been made, remaining challenges, include high demand growth, low generation capacity reserve margins, inefficient energy use, absence of time-of-use rate adjustments, and the need for large capital investments to fund expansion.Current sustainable policies, particularly those encouraging energy conservation, led to peak load savings of more than 871 MW in 2001, mainly as a result of collaboration between the Ministry of Water and Electricity and the Saudi Electricity Company.
Policies and programs are being developed for public awareness, energy regulation and legislation, and energy information and programming. If energy conservation is successful, demand can be reduced by 5–10%. This is equivalent to 3–6 GW of additional capacity, which represents a possible $1.5–3.0 billion saving over 20 years. Typically, investment in energy efficiency is 1% of utility sales revenues, which for a country like Saudi Arabia could be $15–60 million annually. If only savings on air conditioning are considered, the return on investment is equivalent to 400–500 MW of generating capacity—a saving of up to $0.25 billion p.a.
Bureaucratic history
The development ofelectricity in the Kingdom of Saudi Arabia can be divided into two stages:
Phase 1: Initially, electricity generation was left to small, local companies. Such companies sold power at varying rates according to local costs.
In 1961 (1381 AH
Hijri year
The Hijri year is year numbering system used in the Islamic calendar. It commemorates the Hijra , or emigration of Muhammad and his followers to the city of Medina in 622 CE. In Arabic, AH is symbolized by the letter هـ...
), the Department of Electricity Affairs was established within the Ministry of Commerce, with a mandate to regulate the electricity generation sector and to issue permits and licenses to electricity companies and to encourage national investment.
In 1972 (1392 AH), the Department of Electricity Services was established. This Department was separated from the Ministry of Commerce and was given the additional responsibility of planning electrical services for the Kingdom as a whole.
In 1974 (1394 AH), the Ministry of Commerce was divided into the Commerce Agency and the Industry and Electricity Agency. In that same year, the electricity tariff was set for all companies at a level below their actual costs.
In 1975 (1395 AH), the Government adopted ambitious plans for economic development requiring investment in industry and electrification. The Ministry of Industry and Electricity was formed, with an Industrial Affairs Agency and an Electricity Affairs Agency. The Electricity Affairs Agency expanded the planning, co-ordination and regulatory roles for providing electrical services. The Electricity Corporation was established in 1976 (1396 AH) to coordinate the electricity plans contained in the Kingdom's Development Plan.
From 1976 to 1981 (1396 – 1401 AH) all community electricity generation was gradually subsumed under the four regional Saudi Consolidated Electricity Companies (SCECOs), located in the Central, Eastern, Southern and Western regions.
With the formulation of a coherent development plan and the establishment of the SCECOs, the Government was able to bring electricity to the towns, villages and settlements throughout the Kingdom.
The number of electricity customers grew from 216,000 in 1970 (1390 AH) to 3,035,000 in 1996 and 4,955,906 in 2006.
In May, 2003, electricity was made the responsibility of the Ministry of Water and Electricity.
Saudi Consolidated Electricity Companies (SCECOs)
The first SCECO (SCECO-East) was created in 1976 (1396/97 AH). This was followed in 1979 (1399/1400 AH) by SCECO-South. Electricity for the southwest is provided by another consolidated company, and the central region is served by SCECO-Central.The General Electricity Corporation (GEC) had overall responsibility for the Kingdom's electricity system and had direct responsibility for the provision of electrical supplies to rural areas not then covered by the consolidated companies. The GEC represented the government equity holdings in all the independent electricity generating companies and was a source of finance for those companies' capital requirements.
In 1998, the Government announced the reorganization of the electricity sector by establishing a stock market company, named the Saudi Electric Company, through the merger of all the electricity companies operating in the King.
Reserves
As of January 2007, Saudi Aramco's proven reserves were estimated at 259.9 Goilbbl, comprising about 24% of the world total. The Ghawar oil field is the largest oil field in the world, holding over 70 Goilbbl. Ghawar is able to produce 5 Moilbbl/d of oil. Aramco announced 100 koilbbl/d expansion and integration with neighboring petrochemical plants Ras Tanura and Yanbu by 2010 to 2012.Production
Saudi ArabiaSaudi Arabia
The Kingdom of Saudi Arabia , commonly known in British English as Saudi Arabia and in Arabic as as-Sa‘ūdiyyah , is the largest state in Western Asia by land area, constituting the bulk of the Arabian Peninsula, and the second-largest in the Arab World...
produces slightly over 11 Moilbbl/d of oil, exporting 8.9 Moilbbl/d. The government is investing over $71 Billion to increase oil production to near 12 Moilbbl/d by 2009 and up to 12.5 Moilbbl/d by 2015. This may be attributed to the report that 700 koilbbl of excess capacity are needed to compensate for a natural decline in availability.
Shipping
The majority of the oil is shipped via supertankers to refineries around the world. Three major ports are used for the shipping. Ras Tanura is the world's largest offshore oil loading facility with 6 Moilbbl/d capacity. The Ras al-Ju'aymah facility on the Persian Gulf loads nearly 75% of the exports. The last of the three largest terminals is the Yanbu terminal located on the Red SeaRed Sea
The Red Sea is a seawater inlet of the Indian Ocean, lying between Africa and Asia. The connection to the ocean is in the south through the Bab el Mandeb strait and the Gulf of Aden. In the north, there is the Sinai Peninsula, the Gulf of Aqaba, and the Gulf of Suez...
. The enormous sea shipping capacity is vital to Saudi Arabia given the absence of international pipelines.
New oil fields in development
New oil fields will add up to 3.6 Moilbbl/d to production capacity by 2011. The new fields are Haradh, Khurais, Khusaniyah, Manifa, Neutral Zone (shared with Kuwait), Nuayyin and Shaybah I II & III.Aramco
Until 1973 the government did not receive a share of the oil drilled within its boundaries. In 1973 the Saudi government gained a 25% share of the interest from Aramco. In 1980 the Saudi government purchased nearly 100% of the Aramco oil business giving Saudi officials complete control over prices and production. In 1988 the oil company was renamed Saudi AramcoSaudi Aramco
Saudi Aramco , officially the Saudi Arabian Oil Company, is the national oil company of Saudi Arabia.Saudi Aramco is the world's largest and most valuable privately-held company, with estimates of its value in 2011 to be $7 trillion USD.Saudi Aramco has both the largest proven crude oil reserves,...
. The company is controlled by the government but also has a board of advisors and a CEO. The current CEO and President of Saudi Aramco is Khalid A. Al-Falih.
Natural gas
Saudi Arabia has the world's fourth largest reserves of natural gas, of 240 cubic feet (68 m³). One-third of this reserve is found in the Ghawar. Before the master gas system, the oil company flared (burn) the gas as it came from the oil well. Until recently production of natural gas was tightly controlled as it is so closely linked to oil production. The World Trade OrganizationWorld Trade Organization
The World Trade Organization is an organization that intends to supervise and liberalize international trade. The organization officially commenced on January 1, 1995 under the Marrakech Agreement, replacing the General Agreement on Tariffs and Trade , which commenced in 1948...
criticized the government and Aramco for heavily subsidizing natural gas. According to the Energy Information Administration
Energy Information Administration
The U.S. Energy Information Administration is the statistical and analytical agency within the U.S. Department of Energy. EIA collects, analyzes, and disseminates independent and impartial energy information to promote sound policymaking, efficient markets, and public understanding of energy and...
the price was $0.75 MMBtu American dollars.
Global warming
Saudi ArabiaSaudi Arabia
The Kingdom of Saudi Arabia , commonly known in British English as Saudi Arabia and in Arabic as as-Sa‘ūdiyyah , is the largest state in Western Asia by land area, constituting the bulk of the Arabian Peninsula, and the second-largest in the Arab World...
was the 15th top carbon dioxide
Carbon dioxide
Carbon dioxide is a naturally occurring chemical compound composed of two oxygen atoms covalently bonded to a single carbon atom...
emitter per capita in the world in 2009: 18.56 tonnes per capita. All emissions from building and cement production are local but some people may argue that some United Arab Emirates produced fuels are consumed abroad.