(Bloomberg) Even as it pumps near-record quantities of oil, Saudi Arabia is getting ready for a time when the world will no longer need its biggest export.
The world’s largest crude exporter is focusing on renewable-energy sources such as solar power in preparation for a post-oil global economy, Oil Minister Ali al-Naimi said at a conference in Berlin on Thursday. Still, he doesn’t expect that era to dawn any time soon, estimating that consumers will still be burning fossil fuels for at least another 50 years.
“I don’t think there is a more ideal country for renewables than Saudi Arabia,” given its abundant sunshine, available land and plentiful sand, which is needed for making solar panels, al-Naimi said. Studies by the kingdom and other countries into alternative energy are looking at ways to shift from oil and gas to renewables, he said.
It’s not the first time that OPEC’s de facto leader has signaled that, with governments pledging to limit global temperature increases, it’s taking steps to prepare for an age beyond oil. At a climate conference in Paris last May, al-Naimi said Saudi Arabia plans to “be exporting gigawatts of electric power” generated from solar panels in coming decades. Diversify Revenues
Proposals to sell a stake in some assets of state oil titan Saudi Arabian Oil Co., announced by Deputy Crown Prince Mohammed bin Salman in early January, fanned speculation that the slump in crude prices had intensified Saudi Arabia’s plans to diversify its economy.
The country aims to install 54 gigawatts of clean energy capacity by 2040, according to Bloomberg New Energy Finance. Renewable energy currently accounts for about 14 percent of global consumption and will increase to 19 percent by 2040, according to the Paris-based International Energy Agency.
In the meantime, Saudi Arabia is focusing on ways to capture or process emissions of carbon dioxide, al-Naimi said, arguing that attempts to abandon hydrocarbon fuels now are impractical. The kingdom is collecting the waste gas and converting it into petrochemicals.