The Middle East's booming environmental sector

Vandcouver & Dubai (GLOBE-Net) - The Middle East is home to as much as two-thirds of the world’s proven oil reserves. Fossil fuels will continue to underpin the region’s economy for the foreseeable future. Yet a movement is underway to diversify the Middle East’s energy supply, and challenges such as a shrinking water supply have turned the region into a surprising growth center for environmental technologies and services.

The countries surrounding the Persian Gulf account for one-quarter of global crude oil production, and are leading members of the Organization of Petroleum Exporting Countries (OPEC). The region’s fossil fuel reserves and the relative dearth of other natural resources, suggest oil and gas production will continue as the main engine of the region’s economy for some time. But some countries are looking to diversify their economic futures, improve the efficiency of resource exploitation, and tap into the growing worldwide market for environmental technologies.

Environmental awareness in the Middle East has traditionally been low. The region generates large amounts of solid waste and greenhouse gas emissions and its residents consume far more water and energy per capita than those in most other countries.

This has led to an increased focus on environmental issues, and throughout the region a number of projects are underway to help reduce greenhouse gas emissions and to preserve the Middle East’s land, air and water resources.

Perhaps the region’s greatest environmental leader was the late Sheikh Zayed of the United Arab Emirates. Selected as a ‘Champion of the Earth’ in 2005 by the United Nations Environment Programme, his legacy is continued by his son Sheikh Khalifa. Their influence has made U.A.E. into a regional leader in wildlife conservation and a future leader in renewable energy, despite a high consumption, oil-dominated economy. Prince El Hassan Bin Talal of Jordan was named a Champion of the Earth in 2007, and his country has also emerged as an environmental pioneer.

Projects are already underway to conserve water, to restore the desert environment, to increase renewable energy use, and to launch collaborative efforts to increase environmental sustainability in the Middle East. Over the next several decades, the region is expected to make huge strides in renewable energy, water treatment and conservation, and waste management.

The potential of renewable energy

Despite enjoying rock bottom prices for fossil fuels, many in the region recognize the economic and environmental value of energy diversification. The US Department of Energy projects that as worldwide consumption of renewable energy doubles by 2030, Middle Eastern countries will see the most dramatic change, with an average yearly increase in renewable energy capacity of more that 2.5 times the global average.

Solar power is the most obvious choice for the region, which absorbs huge amounts of energy from the sun year round. Governments are seeking to add solar energy capacity, and some local companies are pursuing the development of both solar photovoltaic and solar thermal energy.

The most significant push has come from the oil rich region of Adu Dhabi in the United Arab Emirates, which launched the US $250 million Masdar Clean Tech Fund in 2006. The Abu Dhabi Future Energy Company (ADFEC) is managing the initiative, which aims to spur development of technologies for renewable energy, energy efficiency, and greenhouse gas emissions reduction, as well as water-related technologies such as desalinisation. Masdar means ‘source’ in Arabic.

ADFEC has announced plans to build a $350 million, 100-megawatt solar plant using use “concentrated solar power” (CSP) technology. The plant, which will be tendered in August 2007, will later be increased to 500 MW to supply more power to the national electrical grid. The huge project will shift the country from one in which the only solar panels are found on parking meters into a solar energy leader.

The Masdar initiative will also support the development of a clean technology cluster on an eight kilometre plot of land near Abu Dhabi. The zero-waste, zero-carbon ‘city’ will house clean technology companies as well as a research and development institution established in cooperation with the Massachusetts Institute of Technology. Extensive public transport, renewable energy and efficient infrastructure will be used to lure clean technology companies to set up shop.

ADFEC is completing a wind energy atlas for UAE, and is looking into the possible use of wind to generate electricity, with feasibility studies being conducted offshore.

Other countries in the region are also interested in expanding their energy portfolios. Officials from Jordan have suggested that the country has the potential to leverage its vast solar energy potential to attract leading technologies from Europe. Egypt is planning a 150 megawatt (MW) combined solar-and gas-powered electric plant near Cairo, using CSP technology.

There are even suggestions that the vast deserts of the Middle East and North Africa could be used to supply solar-powered electricity to Europe and Asia, with only a small fraction of the regions’ lands needed to provide a significant amount of energy.

Capturing the carbon market

One area of vast potential that is so far untapped in the Middle East is the carbon market. Emissions intensive industrial and oil-based economies such as Saudi Arabia, Iran, Iraq, Qatar and the United Arab Emirates are all signatories to the Kyoto Protocol, and could be eligible to earn huge amounts of ‘carbon credits’ by participating in projects to reduce greenhouse gas emissions.

CO2 capture and storage, renewable energy, energy efficiency, reduced gas flaring, solid waste management and industrial process improvements represent huge areas of opportunity for emissions reductions and carbon credits.

The region’s depleted oil wells could store huge amounts of carbon dioxide captured from oil production and refining, reducing greenhouse gas emissions while allowing for further oil extraction. The technology to isolate, capture and safely store CO2 has been pilot tested in a few locations worldwide, including at the Weyburn field in Saskatchewan, but has so far not been applied in the world’s top oil producing region. The Abu Dhabi Future Energy Company has selected Canadian firm SNC-Lavalin to perform a feasibility study to evaluate options for the capture of carbon dioxide emissions for enhanced oil recovery.

The United Nations climate change body has not yet agreed on including carbon capture and storage in Kyoto’s Clean Development Mechanism (CDM), but the technology is expected to be a key part of the global effort to reduce greenhouse gas emissions. Energy officials from the region have discussed the possibilities of carbon sequestration with their counterparts in other industrialized countries, and have expressed support for demonstration projects.

This week, the state-owned Dubai Multi Commodities Centre (DMCC) and London-based EcoSecurities announced an agreement to turn Dubai into a hub for the Middle Eastern carbon market. Among the ventures lined up is a project to cut gas flaring in Qatar to reduce emissions by around 2 million tonnes of CO2 annually, representing a yearly carbon market value of close to 30 million Euros. The group hopes to earn Certified Emissions Reductions (CERs) under Kyoto, a sign that the Middle East could become home to a booming carbon market, either during the current Kyoto period or as part of a replacement regime post-2012.

Desert thirst

While possessing tremendous fossil fuel reserves, the Middle East is bereft of an even more vital resource: fresh water. Natural aquifers are being depleted and rainfall is inadequate to meet the needs of rapidly developing areas. Attention has turned towards water conservation, and will increase the already enormous demand for seawater desalination.

Desalinated water currently costs up to three times as much as groundwater, and accounts for around half of domestic water use in the Middle East. At a recent conference, Jeff Stephenson, Vice-President and Chief Operating Officer of Oryx, a Qatar-based construction company, projected that between 2005 and 2015, Middle Eastern and North African countries will spend $24 billion on desalination. Saudi Arabia and UAE are predicted to account for nearly $13 billion.

Desalination is energy intensive, and so one of the principal opportunities available is to power seawater plants with renewable energy. GE is one company that has pursued wind powered desalination, and solar powered water purification is likely to be seen in the Middle East in the future. Energy and cost-effective desalination techniques are also being sought, as the water supply and demand gap is not expected to narrow.

This has also led to calls for improved water conservation and collaboration between countries to preserve groundwater. Governments have been urged by environmental and industry groups to upgrade and develop national standards and specifications for water uses of various kinds.

The Jordanian Minster of Water and Irrigation recently echoed calls for cooperative solutions to increasing competition for scarce water resources, advocating advanced irrigation techniques, increasing the volume of investments in the field of water treatment and improving water infrastructure. He also announced that his ministry will implement a pilot project in cooperation with donor countries to develop water-harvesting techniques, through dams as well as through collecting rainwater from roofs of houses and buildings.

Building design for water efficiency and reuse will also be supported by the recently formed Emirates Green Building Council (EmiratesGBC), which will launch the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) green building rating in U.A.E. in the next few months. The formation of the Council is a significant sign that sustainable development theories are gaining traction in the Middle East, and should soon result in practical applications of clean technologies.

A worldwide sea change

The fact that some of the world’s most prominent oil producing countries are investing in renewable energy and other environmental technologies is yet another sign that the clean technology revolution is underway. As cheap and easy access to fossil fuels allowed for rapid industrialization over the past 100 years, finding solutions that preserve natural resources and protect the environment will dictate success in the future.

If countries that are awash in oil can turn to renewable energy and energy efficiency to bolster their economies, nations that possess a different mix of natural resources can also seek clean technology. Trillions of dollars will flow into the environmental sector over the next several decades, and the Middle East region may attract more than its fair share, providing a multitude of opportunities for the private sector.

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