Business Week has an article quoting a Citibank analysis of Saudi Arabian oil export capacity - Saudi Arabia May Become Oil Importer by 2030, Citigroup Says.

Saudi Arabia, the world’s biggest crude exporter, risks becoming an oil importer in the next 20 years, according to Citigroup Inc.

Oil and its derivatives are used for about half of the kingdom’s electricity production, which at peak rates is growing at about 8 percent a year, the bank said today in a an e-mailed report. A quarter of the country’s fuel production is used domestically, more per capita than other industrialized nations, as the cost is subsidized, according to the note.

“If Saudi Arabian oil consumption grows in line with peak power demand, the country could be a net oil importer by 2030,” Heidy Rehman, an analyst at the bank, wrote. The country already consumes all its natural-gas production and plans to develop nuclear power, which pose execution risk amid a lack of available experts, safety issues and cost overruns, Rehman said.

Saudi Arabia, which depends on oil for 86 percent of its annual revenue, is accelerating exploration for gas and is planning to develop solar and nuclear power to preserve more of its valuable crude for export. The kingdom has refused to import gas, unlike neighboring producers such as Kuwait, and the United Arab Emirates that also lack fuel for power generation.

Some peak oil observers view the "export land model" as a harbinger of doom, but it appears that some oil exporters would rather have income than consume all their oil internally. Giles Parkinson has a look at the adoption of renewable energy in the gulf states - How solar can save Gulf oil exports.

Something rather unexpected is happening in the Middle East. The oil-rich Gulf states, which have earned trillions of dollars in the past few decades exporting crude to the east and west, find they can no longer afford to consume their own oil. They are consuming ever increasing amounts at home, at a huge cost to exports, and are being forced to turn to renewables as a cheaper source of energy.

The Gulf state of Kuwait, the fifth biggest producer in OPEC, has announced it aims to supply 10 per cent of its electricity supply with renewables by 2020 – double what it contemplated less than a year ago. It may not seem a high percentage, but considering that the entirety of its renewable energy generation consists of a single 50kW turbine operated by an environmentally-minded former army engineer, and its energy demands will more than double over the period, this would be quite a feat.

It is a decision driven by necessity. Kuwait's domestic energy consumption has already more than doubled in the past 10 years – compared to a mere 14 per cent growth in production over the same period. It now consumes nearly one fifth of its production and, with consumption predicted to continue at 10 per cent a year, it could be consuming nearly half its production by the end of the decade. The increased domestic consumption has already cut its export income by around $4 billion a year, and that could rise to $20 billion by the end of the decade – at current prices – unless action is taken.

Kuwait is not the only OPEC nation in the Gulf region thinking along these lines: The figures on consumption growth and production growth are nearly the same for Saudi Arabia, which is estimated to be losing more than $7 billion a year in lost export income due to increased domestic consumption. It has announced its intention to spend big on both solar and nuclear for the same reason, to protect its export income, and has set a 10 per cent renewable energy target by 2020, or around 20 gigawatts of installed capacity.

Abu Dhabi has set a 7 per cent target and hosts the low-carbon, experimental Masdar City, and has implemented plans for a series of utility scale solar projects; Qatar has said it could construct up to 5GW of solar by the end of the decade, while Oman has established a tender for a 250MW solar plant, and Dubai is about to do the same.

The Gulf is shaping up to become one of the biggest growth areas for solar in the coming decade, driven not so much by its concern about climate change, by a fundamental economic rationale that the states will no longer be able to afford to subsidise oil-based consumption and will want to use cheaper renewables to free up more oil production for export. Gas is also proving hard to come by and more energy is needed to desalinate water and meet soaring peak demand. Nuclear is another option, considered by Saudi Arabia in particular.

Arabian Business News has a report on the spiralling consumption of oil in Saudi Arabia for power generation - Saudi to boost crude burn for power generation in 2011 .

Saudi Arabia, the world's top oil exporter, will step up its use of crude for power generation in 2011, Saleh Alawaji, the country's junior electricity minister, said on Thursday, as the nation balances use of a new oilfield against obligations to oil cartel OPEC.

Saudi oil industry figures showed the kingdom estimated direct use of fuel for power generation to rise to 540,000 bpd this year from 403,000 bpd last year.

"Our main sources are crude oil and natural gas, and the new expansion of power plants this year will use more crude oil," Alawaji told reporters on the sidelines of an industry conference in Singapore.

Using more crude to generate electricity allows the kingdom to utilise fresh output from a major new oilfield while holding firm to its OPEC commitments to curb exports. ...

CRUDE BURN: Saudi Arabia, the world's top oil exporter, will step up its use of crude for power generation in 2011 (Getty Images)

CRUDE BURN: Saudi Arabia, the world's top oil exporter, will step up its use of crude for power generation in 2011 (Getty Images)

Saudi Arabia, the world's top oil exporter, will step up its use of crude for power generation in 2011, Saleh Alawaji, the country's junior electricity minister, said on Thursday, as the nation balances use of a new oilfield against obligations to oil cartel OPEC.

Saudi oil industry figures showed the kingdom estimated direct use of fuel for power generation to rise to 540,000 bpd this year from 403,000 bpd last year.

"Our main sources are crude oil and natural gas, and the new expansion of power plants this year will use more crude oil," Alawaji told reporters on the sidelines of an industry conference in Singapore.

Using more crude to generate electricity allows the kingdom to utilise fresh output from a major new oilfield while holding firm to its OPEC commitments to curb exports. It also helps the kingdom meet stricter environment rules.

Power generation capacity in the kingdom is likely to grow by about 6 to 10 percent this year, while installed power generation capacity, which now stands at 50 GW, would grow to 77 GW by 2020.

Peak power demand for the summer in 2010 was 45,000 megawatts (MW), he added, versus 41,000 MW in 2009.

Although sitting on the world's biggest oil and gas reserves, Saudi Arabia is struggling to keep pace with rapidly rising power demand as petrodollars have fueled a region-wide economic boom as well as rapid population growth.

Bloomberg is reporting that Vietnam is considering limiting coal exports in order to reserve local coal production for soon to be commissioned coal fired power plants. The intersection fo resource nationalism and the export land phenomenon, in action.

Vietnam, China's largest coal supplier, plans to reduce exports by 32 percent this year and gradually eliminate the sales to meet rising domestic demand, a government official said.

Coal exports may drop to a forecast 22 million metric tons from 32.2 million in 2007, Nguyen Khac Tho, vice director of the Ministry of Industry and Trade's energy and petroleum department, said yesterday in an interview in Hanoi. The ministry will recommend Prime Minister Nguyen Tan Dung halt overseas shipments by the world's eighth-largest exporter of energy coal after 2015. ...

``Coal is a resource that can't be renewed,'' the ministry's Tho said in a phone interview. ``Our most important task is to meet domestic demand to ensure national energy security.''