How Oil-Rich Economies Now Switching Towards Sustainability?

How Oil-Rich Economies Now Switching Towards Sustainability?
How Oil-Rich Economies Now Switching Towards Sustainability?

The Middle East or the Gulf region has been basking on the oil-rich economy for ages. Since the discovery of oil (around 1908) in the region, the entire province has gone rags to riches. This development did not happen over the night as the first motor vehicles didn't roll off the assembly line until 1908. There was a dearth of vehicles on the highway. Many ships and power stations used coal. The Middle East's transportation, water, and sewage infrastructure were severely lacking or nonexistent in 1945. Many roads were barely dirt trails, and there were no deep sea ports for ships to offload their cargo. Many Middle Eastern nations were able to afford better infrastructure thanks to the rising demand for oil. Because of hundreds of engineering projects that were completed in the 1950s and 1960s, entire populations' lives were changed. This was reminiscent of the work done in the 19th century by British engineers known as the Victorians. But things are changing again now that everyone is aware that the globe will quickly reach day zero if oil consumption continues at its current rate. The whole globe is on the lookout for long-term alternatives to oil in order to fight this trend. The Middle Eastern countries are likewise racing to be the first to achieve a sustainable and environmentally friendly economy.

The oil and gas industry is seeking cleantech innovations to help them transition to the energy of the future, as governments around the world are aiming for reduced carbon emissions and a larger share of renewables in their energy mix. According to a report by the International Monetary Fund (IMF), an organization that works to achieve sustainable growth and prosperity for all of its 190 member countries, It seems like major economies are dead set on finding alternatives to fossil fuels, and in response, major automakers have pledged to switch from gas-powered to electric vehicles in the not-too-distant future. An unstable adjustment may be in store for oil-dependent economies as a result of this change, which will bring the oil market in line with climate goals but may have far-reaching consequences that extend beyond their boundaries.

Mordor Intelligence projects a renewable energy industry in the Middle East with a yearly growth of 13.43% from 2023–2028. The use of more renewable energy sources is the goal of multiple government programmes. One example is the goal of the United Arab Emirates (UAE) to have half of its energy come from renewable sources by the year 2050.

MENA Region All Up For Energy Storage Race
The Domestic Impact Of The Climate Catastrophe Is Substantial
Diversification Will Come With A Price Tag

Where the Black Gold Flows: Top 10 Oil-Rich Countries

MENA Region All Up For Energy Storage Race

The magnitude of the energy revolution necessitates massive quantities of raw materials such as copper, lithium, nickel, graphite, and others. Electric cars, wind turbines, solar panels, batteries, and other vital technologies that are reducing our reliance on fossil fuels need materials extracted from the Earth's core.

Worldwide, nations are grappling with the issue of the supply of essential resources for the energy transition being woefully inadequate in comparison to the expected demand. The World Bank's Climate-Smart Mining team predicts that the demand for lithium, cobalt, and graphite will climb by 500%, while the demand for nickel and copper will increase by 100% and 7%, respectively.

The energy system transformation is a worldwide undertaking. Substantially important materials for decarbonisation will come from Africa. Whatever the case may be, interest in potential new mining sites is on the rise due to the global quest for zero pollution.

Starting in western France and continuing eastward through the Middle East and "Daylighting" in Malaysia, the Tethyan mineral belt spans two continents and 33 nations, providing a geological basis. The area is rich in base metals. Regardless, a lot of it has been under-investigated thus far, which makes it perfect for discovering anything new.

According to Quayle Resources’ MD Darryn Quayle,  "The Belt" is a mostly uncharted region of the earth, in contrast to mining zones in Africa and the Rockies. Our research, however, points to the existence of substantial underground reserves of energy transition essentials like copper and lithium.

Leading Oil-Producing Countries Worldwide
Leading Oil-Producing Countries Worldwide

The Domestic Impact Of The Climate Catastrophe Is Substantial

As reported by Deutsche Welle, Germany's international broadcaster, keeping oil exports going will bring substantial money for the region, but it might endanger its very survival. Rising global temperatures are an inevitable consequence of other nations' continued use of fossil fuels sourced by Saudi Arabia and its neighbours. Particularly hard hit will be the Gulf region.

Assuming a 1.5 °C (2.7 °F) increase on a worldwide scale by 2050, the Gulf region could see a 4 °C increase. Already, the area has experienced heat waves with temperatures above 50 degrees Celsius, and the average temperatures are significantly higher than the global average.

In certain climate change scenarios, the Gulf's average summer maximum temperatures will surpass what is considered survivable. Dust storms will become more intense as a result of planetary heating, and low-lying regions may be impacted by higher sea levels.

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Diversification Will Come With A Price Tag

You should know that the money tap will be turned off eventually. There are plans to develop new sources of income because the International Monetary Fund has warned that the region's treasuries would be emptied in fifteen years due to falling oil demand.

The Saudi government is putting its money into green hydrogen production and, in tandem with the United Arab Emirates, is establishing a renewable energy industry to produce commodities like aluminium. Less environmentally friendly, it is also beginning to produce plastic and petrochemicals using its hydrocarbons.

There has been a lot of talk about the enormous economic potential of exporting solar power. Solar panels installed on one square metre of land in a Gulf country might replace 1.1 barrels of oil in annual energy production.

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What is the Tethyan mineral belt, and how is it relevant?

  • This belt stretches from western France to Southeast Asia and is rich in base metals.
  • It's a largely unexplored region with potential for new discoveries of minerals needed for the energy transition.

What are the challenges of the energy transition for the Middle East?

  • The region faces extreme heat and water scarcity, which could be exacerbated by climate change.
  • A rapid shift away from oil could cause economic instability.

Why is the Middle East looking to move away from oil?

  • The global push for reduced carbon emissions and a shift towards renewable energy sources is putting pressure on the Middle East to diversify its economy.
  • Declining demand for oil due to the rise of electric vehicles and alternative energy sources could lead to financial difficulties for oil-dependent economies.

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