Saudi Arabia Warns Domestic Oil Use Growing at ‘Frightening Level’

From Platts

Saudi Arabian oil minister Ali Naimi Sunday called for the rationalization of the kingdom’s domestic energy use as a senior energy official warned that oil consumption was growing at ‘a frightening level.”

“The kingdom uses around 2.5 million barrels of oil equivalent to produce $1,000 of domestic income, compared with an average 1.3 million to produce the same unit of GDP,” the official Saudi Press Agency quoted Naimi as telling an electricity and water conference in Riyadh.

“At this rate, energy consumption will double by 2030 which requires a highly efficient rationalization program with the participation of the public and private sectors and all citizens in order to reduce consumption,” he added.

Naimi said the kingdom, the world’s biggest oil exporting nation, faced “a clear challenge in achieving optimal energy use,” adding that reversing the trend was not “impossible.” Curbing domestic energy could be translated into economic success while freeing up volumes of crude oil, which is the most important resource for the kingdom, he added.

Hashem Yamani, president of the King Abdullah City of Atomic and Renewable Energy, told the same conference that the growth in consumption of oil and oil equivalent was unsustainable.

Among the main challenges facing the OPEC kingpin “was the growth at frightening levels of the use of oil and oil equivalent,” Yamani said, adding that “change is inevitable” and should be introduced gradually.

He called for the establishment of a working plan for the sustainable use of crude oil.

Naimi said a balanced energy mix that would make use of both conventional and unconventional fuels was needed in order to cope with the anticipated growth in demand.

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