"In Saudi Arabia today, we are power hungry and water thirsty," said John Sfakianakis, chief economist, Banque Saudi Fransi, Riyadh. "We need to have a fundamental, paradigm shift on our thinking and planning for the future of our energy and water generation to meet rapidly growing demand. We must become more efficient in how we consume energy and water, and more resourceful in how we produce and distribute them."

He said "We have to transform the current dependence on hydrocarbons to produce energy to a variable energy mix. Saudi Arabia has all the elements to become a world leader in renewables, especially in solar energy. The current direction of Saudi Arabia is a one way street that won't lead us anywhere."

Population is increasing by more than 2 percent currently and energy consumption is annually growing by 8 percent and in certain areas during the summer electricity demand grows by more than 30 percent. "As demand is growing, we are also consuming more and more oil and gas to cater toward domestic demand which rising exponentially. More oil and gas for domestic consumption, means less hydrocarbons underground and less capacity to export which should not exceed 7 million by 2028," he added.

Preserving and efficiently consuming oil would permit a higher share for export to a global market which always requires secure supplies, often ignoring security of demand. Energy inefficiencies compound the problem as market prices are inexistent breading more unscrupulous consumption. People are takers and they will take the incentives provided by governments, if low gasoline prices are available then consumers will opt for large cars if gasoline prices rise, then fuel efficiency will become more prevalent in people's minds. The same goes for households who are energy inefficient both in terms of consumption as well as being owners of homes and commercial space. People are inefficient or efficient users as prices and incentives fluctuate. Saudi housing insulation is inadequate and more than 75 percent of homes remain improperly insulated. The future of the country's environment is being currently compromised as the country's carbon footprint is also rising which means that quality of life has an impact on productivity and economic output. So, more people and less exportable oil capacity in an energy inefficient environment is a very perilous mix.

According to data revealed by Sfakianakis, who was speaking at the Saudi Arabian Infrastructure Congress 2010 in Riyadh, the Kingdom is No.3 globally in per capita water consumption. Additionally, water consumption projections see a 70 percent increase by 2014, which is a huge burden on the government and the country's resources. This fact is put into better light given the fact that 33 percent of the water supply is lost to leakage in the distribution system. Paris, which has become a leader in water conservation within its network, only looses 5 percent.

On the issue of hydrocarbon energy production and consumption, there is a great looming danger of growing local consumption of energy burning away potential export revenues. "Today, the opportunity cost of increased local consumption of energy can be monetized to the tune of hundreds of billions of riyals if we take into account the current water and electricity price incentives as well as the future opportunity cost of hydrocarbons. These are monies that could have been made from exporting the oil for hard currency, but instead, this value is being consumed, hence 'burned,' locally," he commented.

In terms of electricity, the Kingdom today consumes 41 gigawatts of energy, a number that is expected to triple by 2032 to reach 120 gigawatts. To put the level of consumption into perspective, total Gulf Cooperation Council (GCC) consumption amounts to 665 gigawatts, while that of Saudi Arabia adds up to 345 gigawatts, or more than half.

"If this detrimental trend of high energy and water consumption continues, we will find ourselves in a situation where the only exportable goods we have hydrocarbons" are insufficiently available to sustain our population growth and economic aspirations. Our water will be less available and more costly to find and consume," said Sfakianakis. "There is no other choice but to invest in nuclear power and in sources of renewable energy like solar and wind power." Sfakianakis concluded by saying that the country has the elements to become a bright star in renewables using its current hydrocarbon platform to build its future. But hard decisions have to be made today. In economics like in life, it's all about taking decisions, some are good and some are bad but all decisions have to be prioritized and choices have to be made. The current situation does not allow for Saudi Arabia to continue on the path of energy luxury within.