October 9, 2012 1:54 pm
Saudi Arabia has a full fifth of the world’s oil reserves, and it is the world’s largest exporter of oil. When Saudi Arabia decides to ramp up production—the country announced today that it may do so soon—the world price of oil drops. When something threatens that flow of oil, things can get messy. Oil exports make up 90 percent of the Saudi Arabian export economy, and 45 percent of the country’s gross domestic product.
So long as oil keeps flowing from the country’s borders, money will keep flowing in. But, in an ironic twist, one of the keystone regions in the fossil fuel economy is turning itself into a bastion of renewable energy production. Back in May, Saudi officials said they were looking for investors to kick off a $109 billion expansion into solar, wind, geothermal, and nuclear energy production. Venture Beat:
Industry analysts say the country can earn a healthy return on the investment by displacing a third of the oil it now consumes and selling that on the open market.
In other words, one of our major sources of imported oil thinks that spending more than $100 billion to cut its own oil consumption is a good deal–because we’ll pay them more than that for the oil they don’t use.
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