Wednesday, September 7, 2011

Reuters | Saudi Oil Revenue and Water Supply | At Odds?


FEATURE-Saudi Arabia's water needs eating into oil wealth

Wed Sep 7, 2011 2:38pm GMT
 
* Saudi per capita water consumption almost double world average
* Middle East and North Africa 'high stress' in terms of water
* Desalination can deplete amount of oil available for export
By Reem Shamseddine and Barbara Lewis
KHOBAR/LONDON, Sept 7 (Reuters) - Long before it understood the value of oil, the desert kingdom of Saudi Arabia knew the worth of water.
But the leading oil exporter's water challenges are growing as energy-intensive desalination erodes oil revenues while peak water looms more ominously than peak oil -- the theory that supplies are at or near their limit, with nowhere to go but down.
Water use in the desert kingdom is already almost double the per capita global average and increasing at an ever faster rate with the rapid expansion of Saudi Arabia's population and industrial development.
Riyadh in 2008 abandoned what was in retrospect clearly a flawed plan to achieve self-sufficiency in wheat and aims to be 100 percent reliant on imports by 2016.
"The decision to import is to preserve water," said Saudi Deputy Minister of Agriculture for Research and Development Abdullah al-Obaid. "It's not a matter of cost. The government buys wheat at prices higher than in the local market."   Continued...

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