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Page added on August 3, 2015
Saudi energy consumption is highest in MENA
The widely reported fall in Saudi Arabia’s crude oil exports in May — the first time in five months — led many to assume that this may counter the fall in crude oil prices.
This is not the case. To start with, the fall in Saudi Arabia’s crude oil exports was reported by Saudi Arabia itself to the Joint Oil Data Initiative (JODI), a global organisation that includes Opec, IEA and many other energy organisations and individual nations.
The fall in crude exports hides the rise in domestic refining and product exports in addition to the seasonal rise in direct crude oil burn for power generation.
While Saudi Arabia’s production in May stood at 10.333 million barrels a day (mbd) slightly higher than April’s, its exports were 6.935 mbd, down from 7.737 mbd a month earlier, domestic refineries ran 2.4 mbd, up from 2.2 mbd in April and 20 per cent above a year earlier.
Direct crude oil burn rose to 0.677 mbd in May from 0.358 mbd. The difference went into domestic stocks as Saudi Arabia’s huge system perhaps needs a bigger buffer than the current 300 million barrels spread all over the fields, terminals and refineries, to counter changes in domestic refinery runs, rough weather at the loading ports and other eventualities.
Reuters reported that “Analysts said the Saudi build-up most likely reflects the changing domestic oil market, not a global imbalance.”
The downturn in Chinese refineries in May for maintenance may have been a factor in declining exports, but the Saudis are most likely to make up in the higher demand season of the third quarter.
With the advent of new and large refineries, the country’s capacity is now over 2.9 mbd and is becoming a large exporter of products to international markets at a time when refinery margins are reported to be good. As a company, Aramco ranks fourth in the world in refining capacity jointly with Shell.
Subsidised prices
In its Country Analysis Report, the American Energy Information Administration (EIA) said, “Saudi Arabia is the largest oil-consuming nation in the Middle East. Saudi Arabia consumed 2.9 million barrels per day of oil in 2013, almost double the consumption in 2000, because of strong industrial growth and subsidised prices.”
One important contributor to Saudi oil demand is the direct crude oil burn for power generation. There is not just enough fuel oil and natural gas to meet the demand and hence the resorting to crude oil.
In the period 2009-13, the average daily use of crude oil for this purpose was about 0.5 mbd, where the January consumption of about 0.3 mbd rises steadily to about 0.7 mbd between June to September. The peak is usually around 0.9 mbd during August.
But in July 2014 crude burns were 0.9 mbd, the highest ever reported, according to EIA, and this year if the current trend goes on, we may even pass the historical numbers not only due to higher temperatures but because of rising electricity demand where “net electricity consumption has more than doubled since 2000, reaching an estimated 232 billion kilowatt-hours (kWh) in 2012” and rising.
Power generation capacity is expected to rise from 58GW to 120GW by 2032.
Surely Saudi Arabia cannot go on burning rising crude oil volumes for power generation. In spite of the fifth largest natural gas reserves in the world, it does not produce sufficient gas for power generation and for its vast petrochemical industry.
Reducing crude burn
Its dry natural gas production and consumption was 3.6 trillion cubic feet in 2013 where more than 70 per cent is associated gas from crude oil production. Efforts to increase natural gas from free gasfields were successful but just not sufficient.
More effort is needed to reduce gas flaring where “the World Bank Global Gas Flaring Reduction partnership estimates that in 2011, Saudi Arabia lost 131 billion cubic feet (bcf) of gas production to flaring”.
The Wasit Gas Programme is to develop two offshore gasfields of a combined capacity of 2.5 bcf a day which will go a long way in reducing crude burn and feeding other industries.
Because of the implication of rising crude burns and even fuel oil in addition to the limitations of natural gas production, Saudi Arabia is proceeding with “plans to add 41GW of solar power, 18GW of nuclear power, and 4GW from other renewable sources to expand electricity supply” in addition to its attempts to improve energy efficiency.
But the question remains why Saudi Arabia never considered gas imports at least until other resources materialise and to make sure of saving so much liquid fuel for export that may generate far more revenue than the cost of gas?
18 Comments on "Saudi energy consumption is highest in MENA"
Kenz300 on Mon, 3rd Aug 2015 10:45 am
“In its Country Analysis Report, the American Energy Information Administration (EIA) said, “Saudi Arabia is the largest oil-consuming nation in the Middle East. Saudi Arabia consumed 2.9 million barrels per day of oil in 2013, almost double the consumption in 2000, because of strong industrial growth and subsidised prices.”
One important contributor to Saudi oil demand is the direct crude oil burn for power generation. There is not just enough fuel oil and natural gas to meet the demand and hence the resorting to crude oil.”
Diversify, diversify, diversify, even KSA needs to diversify.
Seems like a desert would be a good place to put up a SOLAR ENERGY plant to generate electricity.
More needs to be done to reduce and then end the flaring of gas.
World Moves Toward 100 Percent Renewable Energy – First Electricity, Then Heating/Cooling, and Finally Transportation – Renewable Energy World
http://www.renewableenergyworld.com/articles/2015/07/world-moves-toward-100-percent-renewable-energy-first-electricity-then-heating-cooling-and-finally-transportation.html
HARM on Mon, 3rd Aug 2015 12:46 pm
As long as the KSA heavily subsidizes oil, which it sells to utilities and its citizens for $.25/gallon, what did they expect to happen? Make something cost vastly less than the cost to produce it and people will be enormously wasteful. And they also won’t care about conservation, energy efficiency or the need to find substitutes, why should they?
Export Land Model is going to land on the KSA like a ton of bricks.
Plantagenet on Mon, 3rd Aug 2015 1:02 pm
KSA thought Ghawar would last forever.
BobInget on Mon, 3rd Aug 2015 1:34 pm
We humans are a mass of contradictions.
1) not a single reference to KSA’s uni directional air war. Not only is KSA supplying jet fuel to its own ‘coalition’
of gulf state and US genociders but Egypt and Turkey as well, now that ISIS deprived Turkey of ‘hot’ Iraqi crude.
Back in the day, when pipelines were blown we kept track of such things. Today, not so much.
2)KSA flares more gas then any other nation but needs to build an 80 mile pipeline to bring CO/2 life back to Gahwar. Good luck with that. This is like misplacing a tool. Rather then search, we go to the hardware store for replacment.
3) All talk and no visible slacking
of oil imports to manage our storied ‘glut'(average 7.5 Million barrels p/d)
4) If China and India, 2.4 billion, are going down for the count at +6.5% growth what does that say for European and US under 2.3%?
peakyeast on Mon, 3rd Aug 2015 1:40 pm
I guess Allahs gifts has an expiry date – and if the faithful havent used them wisely at the time of the reckoning there will no virgins and no heaven for them…
HARM on Mon, 3rd Aug 2015 4:54 pm
2)KSA flares more gas then any other nation but needs to build an 80 mile pipeline to bring CO/2 life back to Gahwar
Again, this is mainly due to the KSA’s enormous domestic oil subsidies and their staggering, colossal mispricing of that commodity. If oik weren’t basically given to Saudi citizens and utilities for nearly free, then instead of flaring that gas, Aramco would have a big incentive to capture and store it, and burn it to produce electricity like we do in the States.
Nony on Mon, 3rd Aug 2015 5:16 pm
I think KSA is sitting on MORE oil than people realize. It’s basically the opposite of the old Simmons-Staniford-Hamilton meme that they were covering up imminent declines. If that country was getting drilled like Texas, we would probably have sub $20 oil on the world market.
Given they have more oil than they admit, the behavior makes sense. Don’t share the info on how much you have, to keep prices up. But liberally consume it internally, since the free competition price would be much lower.
HARM on Mon, 3rd Aug 2015 7:26 pm
@Nony,
perhaps, but considering that half their under-30 adult population is on public assistance, it’s more like they *have* to provide it nearly free of charge or risk mass riots and regime change. Frankly the sooner the violent, authoritarian, jihadi-sponsoring, misogynistic House of Saud falls, the better.
Davy on Mon, 3rd Aug 2015 8:01 pm
Harm, I am no fan of the KSA leadership. Your desire for regime change there will likely not be so clean for any of us. Maybe regime change will be worse than just leaving a sleeping dog well sleep.
Nony on Mon, 3rd Aug 2015 8:16 pm
HARM, yeah. I think the young rebels will be even more misogynistic and anti-Christian. If they screw up the oil fields that will suck for prices too. And then control of Mecca and Medina. Whole thing is a mess. I don’t know a good solution and not advocating stability or rebellion. Just be careful. Look how screwed up Iraq got after we kicked out Saddam.
Makati1 on Mon, 3rd Aug 2015 9:14 pm
Back to camels and goats by 2030 for those who survive the revolt.
rockman on Mon, 3rd Aug 2015 10:01 pm
From Reuters: DISTILLATES MONSTER
Saudi Arabia opened its newest 400,000-barrels per day refinery in Yanbu in April, reaching full capacity within two months. “Yanbu has become a distillates monster,” a shipbroker said, referring to the hike in exports from the Red Sea port.
At least seven long-range vessels have been provisionally booked to load diesel from Yanbu headed for Europe, shipping fixtures showed. One of them is the 120,000-tonne Suezmax tanker Atina, carrying diesel to Europe, an unusually big ship to transport the fuel that showcases the scale of the new Saudi operations.
Exports from the Gulf are expected to rise further as its own demand is set to fall at the end of summer when power generation drops.
Nony on Tue, 4th Aug 2015 2:01 am
Saudi Aramco is also actively hiring US geologists with shale experience (they are wanting SA shale gas, not LTO).
http://www.rigzone.com/jobs/postings/839399/Geologist_Unconventional.asp
Kenz300 on Tue, 4th Aug 2015 6:54 am
As long as KSA subsidizes consumption there will be wasteful use of the product.
It is time to dial back the subsidies.
BobInget on Tue, 4th Aug 2015 9:10 am
The following is all about (jetfuel) consumption;
RAF Tornados could be used to bomb ISIS in Syria
In a second stay of execution for the Tornado GR4 fighter bombers, Defence Secretary Michael Fallon announced 12 (Bomber) Squadron – previously designated 2 Squadron – will continue in service until March 2017.
The jets had originally been due to be disbanded last March and replaced with a squadron of Typhoon air defence fighters.
But following the launch of airstrikes against ISIS (or ISIL) in Iraq last September, David Cameron announced they would carry on for an additional 12 months so they could continue in their specialist ground-attack role in the Middle East.
Speaking during a visit to Iraqi capital Baghdad, Mr Fallon said the second extension would ensure the RAF retained “the essential precision firepower, intelligence and surveillance” capabilities needed for operations against the brutal jihadists.
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RAF Tornados have carried out hundreds of strikes
Michael Fallon
He said: “RAF Tornados have carried out hundreds of strikes, helping Iraqi forces push back ISIL from the Kurdish region and out of key towns such as Tikrit and Bayji.”
“We want to ensure we maintain this crucial operational tempo and so we will extend the lifetime of Number 12 Squadron for a further year to March 2017.
“This will allow us to sustain our effort, helping the Iraqis lead the fight on the ground.”
Mr Fallon told BBC Radio 4’s Today programme: “It’s not the number of aircraft, it’s where they are and what the rest of the coalition – and there are some 16 other countries involved in strikes against Isil – would welcome is certainly the participation of Tornado in strikes against Isil headquarters in northern Syria.
“But to do that obviously we need the authority of Parliament, we have a new Parliament now, and at some point I think the new Parliament will have to reflect on the illogicality of our planes turning back, if you like, at the border while other countries fly on to deal with Isil’s headquarters.”
Mr Fallon welcomed Turkish airstrikes against IS and called for them to do more, including sealing the border to stop foreign fighters entering Syria and allowing greater use of Turkish airbases and airspace
The decision could also open the door for an expansion of the RAF’s role to launch airstrikes against ISIS in neighbouring Syria, as well as Iraq.
ISIS supporters with flagsAP
ISIS could get bombed in Syria
Mr Cameron’s previous bid to secure House of Commons’ backing for intervention in Syria’s bloody civil war was derailed by his failure to win the support of Labour MPs in a vote in September 2013.
“Saudi Arabia is said to be the world’s largest source of funds and promoter of Salafist jihadism, which forms the ideological basis of terrorist groups such as al-Qaeda, Taliban, ISIS and others. Donors in Saudi Arabia constitute the most significant source of funding to Sunni terrorist groups worldwide, according to Hillary Clinton.
According to a secret December 2009 paper signed by the US secretary of state, “Saudi Arabia remains a critical financial support base for al-Qaida, the Taliban, LeT and other terrorist groups.”
The violence in Afghanistan and Pakistan is partly bankrolled by wealthy, conservative donors across the Arabian Sea whose governments do little to stop them. Three other Arab countries which are listed as sources of militant money are Qatar, Kuwait, and the United Arab Emirates, all neighbors of Saudi Arabia. Taliban and their militant partners the Haqqani network earn “significant funds” through UAE-based businesses. Kuwait is described as a “source of funds and a key transit point” for al-Qaida and other militant groups.
The Pakistani militant outfit Lashkar-e-Taiba, which carried out the 2008 Mumbai attacks, used a Saudi-based front company to fund its activities in 2005. According to studies, most of suicide bombers in Iraq are Saudis.
15 of the 19 hijackers of the four airliners who were responsible for 9/11 originated from Saudi Arabia, two from the United Arab Emirates, one from Egypt, and one from Lebanon.
Osama bin Laden was a Saudi by birth. His family is a wealthy one intimately connected with the innermost circles of the Saudi royal family.”
_________
So that’s my plan but whom to trust to carry it through?
Well I don’t trust anyone with my plan except myself, so I volunteer to be appointed NATO Supreme Allied Commander Europe (or Deputy SACEUR) to carry my plan through to victory in short order.
For my political superior, I want to report to Condoleezza Rice. So please appoint Condi as NATO Secretary General (I don’t know if she will accept this office or similar but NATO governments could ask her).
Anyway we need Condi, that’s clear. So long as I report through Condi to the NATO North Atlantic Council, no problem.
Supreme Allied Condista
Reply
6 replies
-1
Cookyz4 hours ago
Wasn’t it “Regime change” that started all this rubbish in the first place??????????????
Reply
3 replies
+3
Supreme Allied Condista4 hours ago
No. The idea of regime-change is to change a rubbish regime, like Saddam’s into a democratic regime like the democratic Iraq we were trying to establish before the rubbish regimes of Saudi Arabia and Iran destabilized it by sponsoring terrorism.
Reply
2 replies
-1
the fatch2 hours ago
First you have to somehow get Arabs to understand democracy.
+1
Supreme Allied Condista3 minutes ago
@the fatch
Jeremy Corbyn doesn’t understand democracy.
If we are all together naked in the gas chamber waiting for the poisonous gas to be dropped in and for us all to choke to death before our bodies are burned in furnaces, Nazi-style, Jeremy Corbyn pops up and says “HANDS UP ALL THOSE WHO THINK THIS IS UNFAIR?”
We vote YES it is unfair and Jeremy is happy just before we are all killed because that’s his idea of democracy
– Have a vote, respect the vote then accept your fate be that extermination or whatever, in peace.
Sure first we have to get the Arabs to understand that to get a democracy you must be able to defend yourself against the likes of ISIS who will take away your democracy. That’s not too hard to understand, for everyone except peaceniks like Jeremy Corbyn.
0
Kingrollo4 hours ago
You have missed one BIG choice in defeating ISIL ! , that’s the Syrian Army who have been fighting these Islamic Exstremists for over 4 years, all the while enduring Sanctions imposed by the West.
So how about a change of tack and start helping secular Syria ?.
Reply
1 reply
0
Supreme Allied Condista3 hours ago
Well the NATO and Western countries are allied with the Syrian Kurds in the YPG / YPJ and they have an understanding with the al-Assad regime I believe.
The problem with al-Assad regime is not that it is “secular”, though Russia supports it, but that the problem with al-Assad is he ran a hated police state BEFORE his Syrian regime started bombing anyone who wanted any kind of reform, even democratic reform as per the Arab spring.
So not only were the Syrian army fighting “Islamic Extremists” but also moderate reform groups that supported the Free Syrian Army too. That’s why they got sanctioned, because al-Assad was trying to impose a fascist dictatorship. He didn’t seem to want to negotiated a democratic transition but simply went all out to exterminate anyone who didn’t take his orders.
The only people not oppressed was al-Assad’s Alawite religious group allied to Iran, and they are not secular.
So al-Assad – and the Syrian army he commands – are not politically correct people whom we really want to be seen to help in their frankly fascist aims to turn Syria back into the police state it always was because we support the aims of the Arab Spring for democratic reform, but not the way the anti-Assad campaign has been hijacked by the jihadis.
I did write the following in an earlier comment about a change ot tack to support a secular state in Syria, but I had in mind a partition of Syria, rather than a unitary state.
_________
A solution for SYRIA too
We should support the rights of Sunni-majority areas to establish a Sunni-majority state, partitioned from Iraq and / or Syria but modelled not after Saudi Arabia’s oppressive religious police Sunni state but rather as a secular, democratic state (approximated imperfectly by Turkey with its majority Sunni population), which could be part of a stable solution, acceptable to world powers.
However, to get there, we must first defeat ISIS and al-Qaeda and put irresistible pressure on Arab states to support a peace solution for Iraq and Syria, perhaps with Arab state regular armies invading Syria and Iraq to enforce a peace settlement along partition lines agreed at the United Nations with NATO acting as a military police force, directing Arab armies here and there.
BobInget on Tue, 4th Aug 2015 10:05 am
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US factory orders rebound on strong demand for aircraft
Posted note: Aircraft and auto sales
are strong. Strongest however, used cars.
Reuters – 48 minutes ago
WASHINGTON New orders for U.S. factory goods rebounded strongly in June on robust demand for transportation equipment and other goods, a hopeful sign for the struggling manufacturing sector.
US Factory Orders Advance 1.8 Percent in June ABC News
US factory orders advance 1.8 percent in June, while business investment posts … Washington Post
RTT News
peakyeast on Wed, 5th Aug 2015 7:36 am
With a KSA regime change there is good breeding ground for ISIS to expand onto.
I suppose ISIS oil is cheap – and since it is sold it is providing the market with cheap oil.
Its a win-win situation (for the rest of the world) – as long as they sell oil and murder as many as possible in their neighbourghood – aka demand destruction and thus mitigating the ELM.
Davy on Wed, 5th Aug 2015 8:17 am
Peaky, if KSA collapses so will the world. The oil complex there will likely suffer dangerous setbacks similar to Libya and Iraq. The world in its current arrangement cannot survive a KSA in that kind of turmoil. I imagine the powers to be will prevent it. It may not be preventable though in that case BAU shelf life is limited.