Juan Cole / Nation of Change & Jon Jensen and Tom Page / CNN – 2017-06-27 23:27:44
https://www.juancole.com/2017/06/trumps-worthless-commodity.html
Oil Is a Worthless Commodity and
Saudi’s Crown Prince Knows It
Juan Cole / Nation of Change Op-Ed
(June 27, 2017) — Crude oil prices are cratering, down 20% this year, in the biggest 6-month free fall in years. Muhammad bin Salman is in a hurry to find something else for his kingdom to do for a living.
As Annie Pei of CNBC notes, Investment guru Dennis Garten admitted in an interview with the network that petroleum is “a worthless commodity.”
Garten said that prices could rally a bit in a couple of weeks, but added: “I’ll tell you one thing: in the long run, crude oil is heading egregiously lower. . .” Egregiously here means like shockingly.
Of Saudi Crown Prince Muhammad bin Salman, Garten said, “He understands that crude oil, over the course of the next 20 to 40 years, is going to be a worthless commodity . . . It will be supplanted by something else.”
Garten is referring to the prince’s Vision 2030 plan for the kingdom, which hopes to get it off dependence on oil imports in only 4 years. That is, the crown prince knows that he is holding lakes worth of a stranded asset.
Some 70% of petroleum is used for transportation. Its use for electricity production in industrialized countries is rare. The future of transportation is mass transit and electric vehicles. It took a decade for electric cars to reach 1 million on the road, in 2015. But in 2016 they doubled to two million, in just one year.
India, which has very little petroleum of its own, wants to cut down on its import bill, and avoid the kind of mega-smog now blanketing New Delhi. Its environment minister has therefore announced that he would like to see the Indian private automobile fleet be 100% electric by 2030!
India has about 70 million vehicles on the road. To replace them on this schedule, they’d have to buy about 5 million EV’s a year, 5 times more than were bought in the entire world last year. The Indian government says it will subsidize the process.
If the Indian government subsidizes the engineering of an inexpensive Indian electric vehicle as well, it could take over the entire Asian market, tout de suite. Chinese EVs are already popular — the Chinese bought half a million of them last year (that is, half of all the EVs bought in the world).
Government incentives work. Norway is transitioning to EVs faster than any other country on earth (despite being an oil state itself), largely through government programs.
Insiders know all this, which is why Muhammad bin Salman is in such a hurry to find something else for his kingdom to do for a living.
Dubai, part of the United Arab Emirates — one of the world’s major oil exporters — had serious plans for a green future. One of the major solar energy concerns is Masdar, based in Abu Dhabi, also part of the UAE. New bids for solar installations in the UAE are being let for 2.4 cents per kilowatt hour.
That’s a fossil-fuel killer.
The Sustainable City:
Is Off-grid Living the Way Forward for Dubai?
Jon Jensen and Tom Page / CNN
(June 14, 2017) — The United Arab Emirates (UAE) will not run out of oil any time soon. According to the most recent data set available, the Emirates has proven reserves equivalent to 98 billion barrels — enough for the nation to rank seventh globally.
According to World Bank figures, the UAE consumes 18.4 tons of CO2 per capita per year — nearly four times higher than the global average. But the nation is moving away from crude solutions and swapping them for ones of the eco variety.
In January, Sheikh Mohammed bin Rashid Al Maktoum, the ruler of Dubai and UAE vice president, announced a new energy strategy and $163 billion of investment in alternative energy over the next three decades.
These changes, taking place on a macro level, will gradually transform Dubai. The Emirates’ aim is to produce 50% clean energy by 2050 — 44% of that from renewables — and increase energy efficiency by 40%.
The UAE has already embarked on huge government-funded green housing projects — Masdar City in Abu Dhabi, for example, has funding commitments of $15 billion. But private companies are also playing a part.
Dubai-based developer and civil engineer Faris Saeed is already working on a model of what future “green” communities might look like. His company Diamond Developers has constructed The Sustainable City, a 5-million square foot complex built to consume zero net energy with the potential to go off-grid — the first of its kind in the emirate, the company claims.
Sunshine City
The Sustainable City’s 500 homes, located 18 miles from Dubai City, are powered by solar panels capable of achieving 10 mega-watts at their peak.
Regional expert and author Jim Krane says Dubai’s “300-plus sunny days a year” make solar energy a “very predictable resource.” Yet while the rooftops soak up rays, houses are orientated to avoid direct sunlight inside, keeping interiors cool.
As part of the community’s award-winning model, all water is recycled on site, the complex is car-free, and the community grows its own vegetables between 11 biome greenhouses. On top of this, the site features a 161,000-square foot plaza with retail space, offices and eateries.
“We created . . . a DNA for sustainability where we deal with the social, environmental and economical (at) the same time,” says Saeed.
Global Inspiration
Saeed says that Dubai’s 2009 financial crisis — in which the city was almost insolvent — was a turning point for Diamond Developers. Subsequently, he decided to build a green development, which also made good business sense, launching his concept in 2013. To do so he borrowed from best practises around the world.
He cites Fujisawa Sustainable Smart Town in Japan, 50km west of Tokyo, where 18 companies have collaborated on the 60 billion yen ($544 million) project, which began to populate in November 2014. The site includes residences, parks and commercial facilities and is also powered by solar panels, with energy distributed via a localized smart grid.
Still in progress, it will complete in 2018 with 1,000 households, designed and built by Panasonic’s PanaHome division, as part of a 100-year sustainability plan.
“We have never claimed that we invented anything here,” Saeed adds of The Sustainable City. “It’s the way of thinking, the creative way of linking things together.”
Going Green
To succeed, citizens need to commit to such projects. But it’s possible, even in places that were not built from the ground up to be eco-friendly. Places like Sonderborg, Denmark.
The city has implemented ProjectZero, a plan to transform itself into a zero-carbon locale by 2029. Using 2007 as a baseline, the 76,000-strong population has already cut emissions by 35% by introducing high-tech solutions including electric vehicle charging points, but also education programs to help citizens make greener choices.
Education is also one of Saeed’s goals. He plans to build a school at The Sustainable City to teach future generations about the impact of sustainability. “We developers have a lot of things to do and we have a huge impact we can make,” he argues.
Buying a slice of sustainable living in Dubai isn’t cheap. House prices at The Sustainable City start at $1 million, but so far two thirds of the properties have been sold, while others are rented.
“Developers are afraid always from the extra cost, and people will not afford or people won’t buy their products,” Saeed argues.
“We’re trying to prove here that you can make your profits . . . and still you can do something which you will be proud of, your kids will be proud of, and all the world will like it.”
Chris Giles contributed to this report.
Posted in accordance with Title 17, Section 107, US Code, for noncommercial, educational purposes.
