Saudi Arabia announces $500 billion city of robots and renewables

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Klaus Kleinfeld will be the president of the new project.
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The wind and sun will allow NEOM to be powered solely by regenerative energy
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NEOM commands a unique location to bring together the best of Arabia, Asia, Africa, Europe and America
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NEOM is developed to be independent of the Kingdom’s existing governmental framework
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Overlooking the waterfront of the Red Sea to the South and the West, and the Gulf of Aqaba, NEOM enjoys an uninterrupted coastline stretching over 468 km
Updated 25 October 2017
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Saudi Arabia announces $500 billion city of robots and renewables

LONDON: Saudi Arabia on Tuesday announced plans to build a $500 billion mega city on the Kingdom’s Red Sea coast, as part of a huge national push to diversify its economy.
The 26,500 square kilometers zone, known as Neom, will focus on industries including energy and water, biotechnology, food, advanced manufacturing and entertainment, Saudi Crown Prince Mohammed bin Salman said yesterday.
“The focus on these sectors will stimulate economic growth and diversification by nurturing international innovation and manufacturing, to drive local industry, job creation, and GDP growth in the Kingdom,” said Prince Mohammed, who is also the Chairman of the Public Investment Fund (PIF).
“Neom will attract private as well as public investments and partnerships. The zone will be backed by more than $500 billion over the coming years by the Kingdom of Saudi Arabia, the Saudi Arabian Public Investment Fund, local as well as international investors,” he added.
The business and industrial city will be located in the Kingdom’s northwestern region and is the world’s first zone to extend across three countries, stretching its borders into neighboring Jordan and Egypt.
Adjacent to the Red Sea and the Gulf of Aqaba, and near maritime trade routes that use the Suez Canal, the zone will power itself solely with wind power and solar energy.
The city aims to offer its inhabitants “an idyllic lifestyle paired with excellent economic opportunities that surpass that of any other metropolis. It will attract Saudi Arabians and expatriates, as do all other global societies,” PIF said in a statement.

Neom is the latest project in an ambitious plan to prepare Saudi Arabia for the post-oil era, and follows of plans sell shares in oil giant Saudi Aramco, create the world’s largest sovereign wealth fund and lift the long-standing ban on female drivers.
“Neom will be constructed from the ground-up, on greenfield sites, allowing it a unique opportunity to be distinguished from all other places that have been developed and constructed over hundreds of years,” he said.
PIF said in a statement that the first phase of the city would be complete in 2025. “(Neom) seeks to seize the great economic opportunities of the future by investing in them with confidence and vigor,” the investment body said.
“Neom provides a key opportunity to minimize GDP leakage by allowing those that normally would invest outside, to give them an option of investing locally, hence minimizing the GDP exodus that happens because of limited local investment opportunities,” PIF said in a statement.
The Kingdom has established a special authority to oversee Neom.
Wes Schwalje, COO of Dubai-based research and strategy center Tahseen Consulting, said: “Neom is bringing the same level of disruption to urban planning and economic development as Uber has brought to the technology sector. Investment is strongly influenced by stability, openness, and institutional quality.
“With the announcement of Neom, the Public Investment Fund and Saudi Arabia is communicating to the world that the Kingdom is open for business.”


Global oil demand under threat from cleaner fuel

Updated 14 November 2018
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Global oil demand under threat from cleaner fuel

  • Oil demand is not expected to peak before 2040, the Paris-based IEA said in its 2018 World Energy Outlook
  • The IEA’s central scenario is for demand to grow by about 1 million bpd on average every year to 2025

LONDON: Electric vehicles and more efficient fuel technology will cut transportation demand for oil by 2040 more than previously expected, but the world may still face a supply crunch without enough investment in new production, the International Energy Agency (IEA) said on Tuesday.
Oil demand is not expected to peak before 2040, the Paris-based IEA said in its 2018 World Energy Outlook. The IEA’s central scenario is for demand to grow by about 1 million barrels per day (bpd) on average every year to 2025, before settling at a steadier rate of 250,000 bpd to 2040 when it will peak at 106.3 million bpd.
“In the New Policies Scenario, demand in 2040 has been revised up by more than 1 million bpd compared with last year’s outlook, largely because of faster near-term growth and changes to fuel efficiency policies in the United States,” the agency said.
The IEA believes there will be about 300 million electric vehicles on the road by 2040, no change on its estimate a year ago. But it now expects those vehicles will cut
demand by 3.3 million bpd, up from a previous estimated loss of 2.5 million bpd in its last World Energy Outlook.
“Efficiency measures are even more important to stem oil demand growth: Improvements in the efficiency of the non-electric car fleet avoid over 9 million bpd of oil demand in 2040,” the IEA said.
Oil demand for road transport is expected to reach 44.9 million bpd by 2040, up from 41.2 million bpd in 2017, while industrial and petrochemical demand is forecast to reach 23.3 million bpd by 2040, from 17.8 million bpd in 2017.
All global oil demand growth will stem from developing economies, led by China and India, while demand in advanced economies is expected to drop by more than 400,000 bpd on average each year to 2040, the IEA said.
The IEA, which advises Western governments on energy policy, maintained its forecast for the global car fleet to nearly double by 2040 from today, growing by 80 percent to 2 billion.
On the supply side, the US, already the world’s biggest producer, will dominate output growth to 2025, with an increase of 5.2 million bpd, from current levels of about 11.6 million bpd. From that point onwards, the IEA expects US oil production to decline and the market share of the Organization of the Petroleum Exporting Countries (OPEC) to climb to 45 percent by 2040, from closer to 30 percent today.
New sources of supply will be needed whether or not demand peaks, the agency said.
“The analysis shows oil consumption growing in coming decades, due to rising petrochemicals, trucking and aviation demand. But meeting this growth in the near term means that approvals of conventional oil projects need to double from their
current low levels,” IEA director Fatih Birol said.
“Without such a pick-up in investment, US shale production, which has already been expanding at record pace, would have to add more than 10 million bpd from today to 2025, the equivalent of adding another Russia to global supply in seven years, which would be a historically unprecedented feat.”