Saudi urges ‘fair’ energy transition, defends oil

Saudi Energy Minister Khalid Al-Falih said at Abu Dhabi Sustainability Week that ‘balancing greenhouse gas emissions will take decades.’ (Reuters)
Updated 15 January 2019

Saudi urges ‘fair’ energy transition, defends oil

  • Unveiling Saudi Arabia’s clean energy program, Khalid Al-Falih said the kingdom plans to create a global hub of renewable energy capability over the coming decades
  • Energy Minister proposed a strategy of gradually improving the quality of fossil fuels to reduce greenhouse gas emissions at the same time as increasing renewable energy consumption

ABU DHABI: Top oil exporter Saudi Arabia called Tuesday for a “fair” and gradual global energy transition as it unveiled an ambitious domestic renewable energy program.
Experts say energy output from renewables, especially solar and wind, is growing faster than anticipated, threatening to displace oil, gas and coal as the world’s main sources of power.
But Saudi Energy Minister Khalid Al-Falih told a clean energy conference in Abu Dhabi that the transition must take place gradually in order to avoid “chaos.”
“Balancing greenhouse gas emissions will take decades,” he said at Abu Dhabi Sustainability Week.
“It’s not going to be done overnight. In the interim, ample and reliable energy sources like oil and gas will need to be made available or (the world will) risk chaos.”
Unveiling Saudi Arabia’s clean energy program, he said the kingdom plans to create “a global hub of renewable energy capability” over the coming decades, producing upward of 200 gigawatts.
Falih proposed a strategy of gradually improving the quality of fossil fuels to reduce greenhouse gas emissions at the same time as increasing renewable energy consumption.
“We urgently need consensus around an energy transition strategy that is realistic, fair and pragmatic, driven by economics and technology, not a blind ideology,” he said.
A report released last week by the International Renewables Energy Agency (IRENA) said the rapid growth of renewable energy sources was causing major shifts in international politics.
It said the rapid rise of renewables is being driven by new technologies and falling costs, making them ever more competitive against fossil fuels.
But Falih insisted that global demand for oil “will continue to grow for the foreseeable future.”
Saudi Arabia plans to generate some 59 gigawatts of electricity from solar and wind sources by 2030, he said.
The kingdom, which has been exporting close to 8.0 million barrels of oil daily, currently produces virtually no energy from renewable sources.
But last week it signed a deal to establish a 400-megawatt wind farm, which follows a deal last year to build a 300-megawatt solar plant.
Falih said Riyadh would tender dozens of renewable energy projects every year, with at least 12 such deals slated for 2019.
It will also begin to introduce nuclear power, building two reactors in the next decade with a combined production of between two and three gigawatts, he said.
This strategy will help the kingdom save up to two million barrels of oil daily by 2030, he added, without providing details on the expected costs of the program.


Economists fear a US recession in 2021

Updated 19 August 2019

Economists fear a US recession in 2021

  • Trump’s higher budget deficits ‘might dampen the economy’

WASHINGTON: A number of US business economists appear sufficiently concerned about the risks of some of President Donald Trump’s economic policies that they expect a recession in the US by the end of 2021.

Thirty-four percent of economists surveyed by the National Association for Business Economics, in a report being released Monday, said they believe a slowing economy will tip into recession in 2021. 

That’s up from 25 percent in a survey taken in February. Only 2 percent of those polled expect a recession to begin this year, while 38 percent predict that it will occur in 2020.

Trump, however, has dismissed concerns about a recession, offering an optimistic outlook for the economy after last week’s steep drop in the financial markets and saying on Sunday, “I don’t think we’re having a recession.” A strong economy is key to the Republican president’s 2020 reelection prospects.

The economists have previously expressed concern that Trump’s tariffs and higher budget deficits could eventually dampen the economy.

The Trump administration has imposed tariffs on goods from many key US trading partners, from China and Europe to Mexico and Canada. 

Officials maintain that the tariffs, which are taxes on imports, will help the administration gain more favorable terms of trade. But US trading partners have simply retaliated with tariffs of their own.

Trade between the US and China, the two biggest global economies, has plunged. Trump decided last Wednesday to postpone until Dec. 15 tariffs on about 60 percent of an additional $300 billion of Chinese imports, granting a reprieve from a planned move that would have extended duties to nearly everything the US buys from China.

The financial markets last week signaled the possibility of a US recession, adding to concerns over the ongoing trade tensions and word from Britain and Germany that their economies are shrinking.

The economists surveyed by the NABE were skeptical about prospects for success of the latest round of US-China trade negotiations. Only 5 percent predicted that a comprehensive trade deal would result, 64 percent suggested a superficial agreement was possible and nearly 25 percent expected nothing to be agreed upon by the two countries.

The 226 respondents, who work mainly for corporations and trade associations, were surveyed between July 14 and Aug. 1. That was before the White House announced 10 percent tariffs on the additional $300 billion of Chinese imports, the Chinese currency dipped below the seven-yuan-to-$1 level for the first time in 11 years and the Trump administration formally labeled China a currency manipulator.

As a whole, the business economists’ recent responses have represented a rebuke of the Trump administration’s overall approach to the economy.

Still, for now, most economic signs appear solid. Employers are adding jobs at a steady pace, the unemployment rate remains near a 50-year low and consumers are optimistic. US retail sales figures out last Thursday showed that they jumped in July by the most in four months.