If the headline doesn't concentrate the world's efforts to find alternatives nothing else will. Saudi Arabia, the world's largest oil exporter, could become an oil importer by 2030, according to analysis by Citigroup's Heidy Rehman.
It appears Saudi Arabia consumes a quarter of all its production. In fact, on a per-capita basis, the kingdom is using more oil than most industrialised nations.
And it's going to gorge itself on even more as demand for electricity soars.
Saudi Arabia could be an oil Importer by 2030 - Saudi Arabia is the world’s largest oil producer (11.1mbpd) and exporter (7.7mbpd)," Rehman wrote.
It also consumes 25% of its production. Energy consumption per capita exceeds that of most industrial nations.
Oil and its derivatives account for 50% cent of Saudi's electricity production, used mostly (>50%) for residential use. Peak power demand is growing by 8%/yr. Our analysis shows that if nothing changes Saudi may have no available oil for export by 2030.
It Already Consumes All its Gas Production - Saudi Arabia produces 9.6bn ft3/day of natural gas. This is entirely consumed domestically. It is looking to raise gas production to 15.5bn ft3/day by 2015E, implying a 2011-15E CAGR of 12.7%. However, peak power demand is growing at almost 8% pa. We believe Saudi Arabia will need to find new sources to meet residential & industrial demand."
As a result of its subsidies we calculate ‘lost’ oil and gas revenues to Saudi Arabia in 2011 to be over $80bn. This could rise to US$400bn by 2035,” Rehman wrote. At the domestic level, we believe the only real way to rationalize energy consumption would be to reduce subsidy levels.”
As with most things in the Gulf states, public-sector workers and most residents don't need to pay for their electricity and (desalinated) water. These are mostly subsidised as is filling up petrol-guzzling 4WDs. That could be costing all governments billions of dollars.
It could be time to rethink such policies although this could be unpopular. But there are ways around this: one-off public sector salaries increases. A little extra inflation is unlikely to destabilise economies in most Gulf states as the indigenous populations are a fraction of the expat communities.
But it's not like the Gulf states have not thought long and hard about their own energy needs. From Abu Dhabi to Riyadh, governments are moving to greener pastures - with solar and nuclear power. They're investing in the manufacture of panels to energy companies that can build power plants.
There may be a shortage of specialised nuclear personnel to run them but for now the Gulf states can pay unmatched salaries to attract the right talent until local people can be trained to meet demand.
It's the rest of the world that needs to worry and cut its dependence on oil - a tough ask when you consider all the byproducts of oil. That could stunt the growth of emerging economies.