Never say the desert can’t bloom. From oil and gas engineering advances to solar panels outside the world’s richest cities, tech is taking root in the sand.
Last week, Japanese Prime Minister Shinzo Abe visited the United States. He spoke with President Bush about the need for a peaceful resolution to the North Korea nuclear dispute, Iran’s own itchy atoms, and of course Iraq.
Yadda yadda yadda.
Don’t get me wrong, these are all very pressing issues that must be dealt with, but they come nowhere close to the importance of this week’s itinerary for Abe. Subject: oil.
Japan gets 70% of its oil and gas from the United Arab Emirates, Kuwait, Qatar and Saudi Arabia. So that’s where he went straight after he left Washington, on the second Middle Eastern junket in a year by a Japanese premier.
On all of his stops, Abe urged the dishdashah-wearing emirs and kings to do their utmost to secure "steady and stable supplies" of fossil fuel to Japan. He offered the emir of Kuwait, Sheikh Sabah al-Ahmad al-Sabah, the use of facilities on the southern Japanese island of Okinawa for stockpiling oil.
In other words, Japan wants to get Persian Gulf oil away from the Persian Gulf lickety-split, and holding the hydrocarbons closer to home makes the most sense in case of an Iranian blockade on the chokepoint at the straits of Hormuz or any skirmish in the shipping lanes.
But Japan, an industrial dynamo with no oil and gas, has to be frustrated by the Gulf petrocracies and the tax-free la-la land they have created.
Take Dubai and Abu Dhabi, two of the United Arab Emirates.
Since 1963, the US has logged 46 patents from the UAE. Compare that to resourceless regional pariah Israel, with over 14,000 in the same period, or Japan’s more than 658,000!
Saudi Arabia hasn’t done much better, with 260 US patents since 1963. The post-WWII legacy of oil wealth for these countries has been a dearth of intellectual capital, in contrast to Germany and Japan, two vanquished countries that rebuilt and built something better.
Shinzo Abe offered Saudi King Abdullah a "multi-layered partnership," talking about technology and strategic investment from the Bank of Japan. He came with a contingent of 180 businessmen, compared to just 100 Saudis who showed up.
Though it may seem like a farce for Japan to supply money to the states of the Gulf Cooperation Council that are already swimming in petrodollars, Japan’s money is talking. In Abu Dhabi, Abe committed $1 billion to the Abu Dhabi National Oil Corporation for maintenance of and upgrades to oil export infrastructure.
This certainly benefits Japan, but it is not a truly "multi-layered partnership" if it continues to funnel all of the attention to oil and gas.
As Japan aims to establish a free trade agreement with the Gulf Cooperation Council (GCC), Abe could look to the edge of Abu Dhabi for a new horizon of cooperation and trade.
A century ago, both Dubai and Abu Dhabi had economies focused on fishing, pearl-diving and camel-herding. But then the rush started for the Persian Gulf’s abundant oil supply, and the mud huts turned into banks while the people got very, very rich.
With the world’s number five oil and number four gas reserves, the UAE may have enough fossil fuel for the next 150 years, according to the Gulf Times newspaper. But in order to maximize export capacity and sustain the shopping malls, luxury hotels and indoor skiing facilities they fancy, UAE emirs (as the leaders are called) are turning towards the inescapable desert sun for fuel.
The Abu Dhabi Future Energy Company has launched a government-backed project to install solar arrays around the city, the first step in a new strategy called Masdar (meaning "source" in Arabic).
As Sultan al-Jaber, CEO of the Future Energy Company and himself a member of the ruling family, told Agence-France Presse last week, "In the UAE we do not suffer from a lack of energy security, but we never want to suffer from it. We are thinking ahead of ourselves."
I say it is impossible to think ahead of yourself. You can only think ahead of others.
"It is time for Abu Dhabi to start positioning itself as a [solar] technology developer," Jaber said, explaining that ADFEC’s initial $350 million investment in a 100 MW solar plant would be expanded to build 500 MW of eventual capacity on six square kilometers (2.5 square miles).
In terms of technology, Masdar will use concentrated solar power (CSP). This science has already been used in Israel, and while the UAE and Israel do not have official relations, the sun-rich Arab states could all benefit from knowledge-sharing with the high-tech advances of Israel’s various technological institutes, which churn out more US-listed companies than any foreign country but Canada.
Masdar will in fact partner up with the Massachusetts Institute of Technology to cultivate the local knowledge to build a start-to-finish product chain in the area. And it doesn’t stop with the sun.
Jaber says that a wind atlas of the UAE will be available around the beginning of 2008, charting another vast regional resource as the Emirates consider offshore wind projects up to 15 kilometers (9 miles) offshore.
Of course, creating new sources of domestic energy means that Abu Dhabi and other smart oil states will maximize their oil exports, while creating new industries in the process. Will the House of Saud, the Sabah family of Kuwait, and other regional royals shudder if the participants in a truly evolved economy start demanding representation?
Maybe this vision of a new Persian Gulf is just a mirage, but I’m betting that as oil wealth wanes we will see a proliferation of public companies from the Persian Gulf.
Regards,
Sam Hopkins
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