Saudi Arabia water needs eating into oil wealth

By Reem Shamseddine and Barbara Lewis; Editing by Daniel Fineren and Sonya Hepinstall
7 September 2011

KHOBAR/LONDON (Reuters) – Long before it understood the value of oil, the desert kingdom of Saudi Arabia knew the worth of water. But the leading oil exporter’s water challenges are growing as energy-intensive desalination erodes oil revenues while peak water looms more ominously than peak oil — the theory that supplies are at or near their limit, with nowhere to go but down. Water use in the desert kingdom is already almost double the per capita global average and increasing at an ever faster rate with the rapid expansion of Saudi Arabia’s population and industrial development. Riyadh in 2008 abandoned what was in retrospect clearly a flawed plan to achieve self-sufficiency in wheat and aims to be 100 percent reliant on imports by 2016. “The decision to import is to preserve water,” said Saudi Deputy Minister of Agriculture for Research and Development Abdullah al-Obaid. “It’s not a matter of cost. The government buys wheat at prices higher than in the local market.” Critics complain the policies are still not joined up, however, and say the risk is that Saudi farmers will turn to even thirstier cash crops. “Many farmers who used to grow wheat start growing fodder (animal feed) instead that generates quick cash. But unfortunately fodder’s use of water is four times more than for wheat,” said Abdulaziz Rabih al-Harbi, professor at the King Saud University and a member of the agriculture committee at the Riyadh Chamber of Commerce and Industry. “Other farmers grow palms instead of wheat and this also consumes huge amounts of water and may not achieve the desired goal of efficient water consumption.” […] “Gold is there but we don’t have water,” Mohammed Hany al-Dabbagh, vice president of precious metals and exploration at state-controlled minerals firm Saudi Arabian Mining Co said. “Water is as precious as gold.” Saudi Minister of Water and Power Abdullah al-Hussayen said in May the nation’s demand for water is rising by more than 7 percent each year and that more than 500 billion riyals ($133 billion) of investment in the water and power sector will be required over the next decade. Consultancy Booz and Company estimates Saudi water use is around 950 cubic metres per capita each year, compared with a world average of 500 cubic metres. Agriculture is the single biggest user, absorbing 85-90 percent of the kingdom’s supplies, according to Saudi’s deputy minister of agriculture for research and development. Of that, almost 80-85 percent came from underground aquifers. With average annual rainfall around 100 mm (4 inches), Saudi’s ancient underground aquifers are its lifeblood. But just as peak oil theorists believe the world’s conventional oil supplies are at or near their peak, proponents of the peak water view have said the resource has been irreversibly drained. Booz and Company has said some of the region’s aquifers — also referred to as “fossil water” as they contain rain that fell thousands of years ago — have become too salty to drink. […]

Saudi Arabia’s water needs eating into oil wealth via The Oil Drum