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Saudi Arabia to Seek Financial Aid if World Reduces Oil Dependence

| Friday October 9th, 2009 | 27 Comments


Mohammad S. Al Sabban - Saudi Arabia

Saudi Arabia may join the list of countries seeking financial aid over the UN climate deal. According to a Forbes.com report, during the UN’s recent greenhouse gas talks in Bangkok, Saudi Arabia campaigned quietly for financial compensation should a climate deal substantially reduce the world’s use of fossil fuels. The country appears to be motivated not by a need for assistance adapting to the impact of global warming but rather by a desire for compensation for decreased oil profits. Will the Saudis’ stipulation impact the development of an international climate treaty?

The Saudis’ campaign comes despite a recent International Energy Agency (IEA) report, which demonstrated that oil-rich nations would likely still profit with emissions regulations (sufficient for curbing climate change) in place. (According to the report, OPEC revenues would increase by $23 trillion between 2008 and 2030. This would be a fourfold increase in OPEC revenues’ growth rate between 1985 and 2007.)

Saudi delegation head Mohammad S. Al Sabban reportedly claimed that the IEA figures were biased and conflicted with OPEC’s own calculations (which he said showed a potential $19 billion-per-year loss [starting in 2012] for Saudi Arabia under a new climate deal.) Al Sabban also emphasized the nation’s dependence on oil (emphasizing a lack of other resources) and accused Western nations of working against oil producers under the pretext of climate change negotiations.

While Saudi Arabia’s economy has suffered from the global recession, some analysts believe it is better equipped than many other nations to cope with the crisis and with a climate deal’s requirements. Moreover, several environmental groups have criticized Saudi Arabia’s apparent prioritization of oil profit over climate change. Most countries, rich and poor, have agreed that a new climate deal should be implemented in order to decrease temperatures and greenhouse gas emissions to safe levels.


▼▼▼      27 Comments     ▼▼▼

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  • http://dreamsofgreen.wordpress.com DreamsofGreen

    Well said. I find it maddening that after grinning their way through the boom years of sky-high oil, and frittering it away on some of the most ridiculous mega-construction projects on earth they actually have the gall to demand financial assistance.

    It defies rational cognition. Then again, the oil sheiks and their ilk have never been 100% grounded with reality to begin with. Absolutely awesome power corrupts awesomely.

    • exmachina

      Seriously they have been screwing us for years and now they want us to help pay them. The simple idea pisses me off, not to mention ya I would love to see the oil producers suffer from the climate change movement. They have done a lot of questionable things in the name of profit and deserve whatever they have coming.

  • Nick Aster

    You’ve got to be kidding me! These guys have a lot of gall to pull a stunt like asking for aid over the inevitable and eventual end of their oil profits. Regardless of what happens with any climate change legislation, Saudi Arabia will have decades of riches flowing in and is in no position to ask for aid. If they spend and invest that money wisely, they’ll be just fine.

  • Jon Gelbard

    Hang on a moment while I take out my (extra) little fiddle (made of FSC-certified wood) and a box of tissues (100% tree-free material of course).

    Ok, I am crying you a river. And playing a wonderful swan song for Saudi Arabia. Cannot believe their gall!

    Why doesn’t the royal family just sell off some of their gazillion dollar castles and fleets of Rolls and Bentley’s and yachts?

    Or invest that oil money (or a castle or two) into developing new clean-tech industries…

  • Macky

    Give me a break. Their neighbors (UAE) have not only become models of sustainability, but they have been willing to provide all the ‘lessons learned’ to the world.

    Kingdom of Saudi Arabia has a choice: complain about change or innovate to embrace it.

    • Phild3v1ll3

      UAE a model of sustainability? Ha, to quote a recent documentary: “Dubai has endless sun, yet no solar panels to harness that energy”. Most of the UAE is wasteful beyond belief.

  • http://you-read-it-here-first.com Blue Swan

    Can’t they sell off all the unused cocaine and disco equipment they bought back in the 70s?

    • Porco Dio

      This Comment is genius!

  • Tim

    “Their neighbors (UAE) have not only become models of sustainability” — you’re kidding right? Dubai a model of sustainability? They built a ski resort in the middle of the desert, Hummers are still popular there, and, oh yeah, they are builing islands to represent the entire earth. 40% of there ridiculous construction projects are on hold…must I go on? They are like the Islamic Las Vegas.

  • Mr. Dave

    I hate to say it, but I’m sure the U.S. Government will end up capitulating to the Saudi’s demands. I don’t see our politicians resisting their requests for financial assistance as long as the U.S. remains a net importer of foreign oil. So sad, but I believe it to be true. Nothing would be a bigger blow to state-sponsored terrorism than to let the price of oil fall. the Saudis, having been an ally in the region for a very long time, will get what they ask for.

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  • http://www.zaytuna.org Kazazic

    What makes Saudi so nervous? Indians & Chinese must be more nervous of the new legislation.

    The story is again an example of political spin: What the Saudis have asked for is that the WEST must compensate them if they want them to comply with the new rules on Green House Gases. The western nations created the problem by crass Industrialization and now want to stop the development of emerging countries.

    It is at the moment not possible to develop industrially & technologically without emissions. India and China have been given compensation! Why this discrimination against Muslim Majority countries?

    India nuclear deal is part of this. The nuclear deal is unprecedented in the history of the world in that India is nuclear weapons state and has not signed NPT, CTBT yet advanced sensitive technology was given to it which will be for sure diverted to weapons program as well.

    SHAME SHAME SHAME!

    • Phild3v1ll3

      You’re kidding right? Discrimination of Muslim countries?! We’re talking climate problems and Saudi Arabia here, not Pakistan/India conflict. The oil rich Muslim countries will have rising demand and therefore rising profits from oil until they run out anyways. They’re destroying their own future by pumping the money, they could be invest in a sustainable and highly profitable future, into the Western style consumerist lifestyle, they pretend to so despise.

      Getting back to your India reference, India is a stable nation unlike the also nuclear Pakistan. India was one of the countries both actively involved in proposing and drawing up the NPT, CTBT but decided not to agree to the two since all they do is legitimize keeping nuclear arsenals intact. If a countries government is stable and does not threaten the integrity of other countries then there is no clear argument to discriminate them and stop them from developing a civil nuclear programme and if under threat even a military one. So if you consider discrimating against aggressive behaviour or the danger of aggressive behaviour to be the equivalent to the discrimination against Muslim nations – then you yourself argue that Muslim = aggressive, which I in no way think to be true.

    • anotherhuman

      “Why discriminate against Mulsim countries?”

      Becuase they are not investing in knowledge which they are still capable of with their money in the next 30 years, but in narrow ancient dogma which they exported along with their oil while despising any activities of enlightment as ‘western’, of course, not forgetting to mention that this was supported by ‘the west’. But those who comments against this are definitely not the lay consumerists whom you blame.

      Embrace change or pay the price for anti-itellectualism, don’t collectivise and blame the West for everything.

      India didn’t sign the CTBT becuause it was discriminatory for a large democratic secular country with hostile nuclear armed neigbours(China being a ‘have’ country where the discrimination was made between ‘haves’ and ‘havenots’) with which it had a handful of border wars.

      And, despite its numerous problems, India is way much progressive when compared to “Muslim countries”, even while occasionally suffering from their exports.

  • Graham

    Oh Saudi Arabia will never want for consumers of their oil. Even if G7 or G20 nations drastically cut back on oil consumption, there are hundreds more nations in the world that will soon find that oil is now cheap, and abundantly available. China and India, alone, will ensure that Saudi Arabia never sees slacking demand for their oil, due to the explosion in economic growth going on in both countries.

  • Responder

    Many of the comments here appear to based on an external understanding of the Saudi economy, one which cannot be blamed on except for an over reliance on easily accessible information. To that end I will point to the fact that the Kingdom is right to be concerned because nearly 90% of its revenue in terms of GDP is reached through oil exports, and because its citizens are blessed to live tax free, these revenues are crucial for public expenditures. With the highest population rate in the Middle East, it adds greater budgetary pressures on the Kingdom, which is one of the reasons major infrastructure projects are being implemented now. Furthermore, the attempt by the delegation is to increase planning measures that divert volatility shocks, an effect that all world consumers will benefit from.

    • Phild3v1ll3

      Well even without a UN climate the Saudis have known that they’d run out of oil some time mid- to late 21st century, which means they should have started to diversify their industries ages ago, therefore averting volatility shocks caused for whatever reason.

    • Sue

      Saudi Arabia is an utterly undeserving country whose backwards people would still be living in tents and herding camels if they hadn’t lucked out to vast oil reserves. They used the power that came from oil to unabashedly manipulate the world, and now we are to cry when it’s running out, and save them from what? The monumental stupidity of having all that wealth and not investing it intelligently? Whether Dubai is successful or not, credit them with understanding that oil revenue was finite, and attempting to use it to invest in assets that are not. Saudi Arabia would rather whine and ask for handouts. Is there a violin small enough? I LOVE the comment on here which implies that somehow they have a right to a tax-free prosperous society, with unlimited population growth, and deserve our money to support it when their own runs out. Why should we,who control our population so that we can feed all our people, and invest intelligently for the future, indulge and support a completely self-indulgent society? How about instead, we give our money to poor countries that *didn’t* have trillions of petrodollars pouring into them for fifty years. They deserve our help. The Saudis deserve only scorn.

  • Captain Obvious
  • Thomas

    Dubai is being built for one reason: To prepare for the fact that oil reserves will be depleted and oil production will go to virtually zero, in about 25 years.

    25 years.

    You wouldn’t know that from listening to the US oil companies, but it’s true. Hurry up green/clean technologies. All it takes for new business startups to invest and develop new tech, is a clear signal from government that they’ll support and protect those investments through tax credits and carbon exchanges.

    I’ll hold my breath for that one.

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  • Steve

    We shouldn’t be crying for the Saudi’s, as they are but one of the many people’s who’s inability to grasp western thinking leads them to drown on ‘that’ era’s firewater exchange mechanism.
    No, Instead cry for Exxon, Shell et,al. who have been so successful at scaring people with the green message that oil demand might dip before the last of the cheap oil is pumped. What will those overpaid crooks do then?

  • Porco Dio

    So, if I understand this correctly – “all the money in the world” couldn’t get Saudi Arabia out of the theocratic stone age.

    Even knowing for decades the oil would run out, and still possessing 20% of the world’s oil reserves today, they come, arms outstretched, for hand-outs. This is a scandal, to be sure.

    They continue to bite their thumbs at the rest of the world while refusing to liberate their country from a backward religion. Their human rights abuses which are driven by a stupendously retarded world view will never be addressed – not even if the loss of oil leads them into poverty.

    If they become poor their Islamic leanings will get only stronger. They are human beings and creations of sperm and ova, just like the rest of us. They are not children of Allah as they so arrogantly profess.

    They should take their responsibilities seriously and use every last penny of the oil revenues they have left to lift themselves out of the bigotry, hypocrisy and the general retardation that sickens their country and rots it to the core.

    Begging for money like uncle Frank, the alcoholic, who lost his job and beats his wife aint gonna help, not one little bit…

    • anotherhuman

      “If they become poor their Islamic leanings will get only stronger. ”

      I hope not. There seems to be some intelligent people in Saudi who could possibly get them out of their mentality before their oil runs out.

  • Alex

    They shouldn’t have started price gouging ten years ago we wouldn’t have enough support to move on to other technologies. Screw them I hope they go bankrupt..

    • Otter

      If you don’t like the price of gas, stop driving or get a more efficient vehicle. Better yet, demand better standards from the US gov. It’s got nothing to do with “price gouging” Saudi Arabia can charge anything they want because they own the supply.

      I agree, however, that asking for aid is hilarious.

  • Keith Elliott

    Wow! Some of you fine folks have no idea what you are talking about. Please don’t misunderstand me, I have zero sympathy for the Saud family. The only reason they live tax free is due to the massive influx of cash from around the world, not the least of which is provided by the U.S. If U.S. citizens weren’t so greedy themselves, and had better negotiators, this situation would not be as bad as it is today.
    Some of the Dubai comments are a bit out in left field. The UAE own 9.5% of the world’s oil reserves and 3.5% of the natural gas reserves. If you think they are doing nothing about going green, just Google Masdar, UAE and then visit their website. If that doesn’t blow you away, then nothing will. A 100% carbon neutral city of 40,000 using renewable energy. Would anyone in the U.S. care to show me where you have done anything remotely similar? Even on the drawing boards? No, it doesn’t exist in the U.S., mainly because of the all powerful fossil fuel lobby, which is still getting money for subsidies it does not deserve. The end user should be paying the real cost of energy, not some artificially low figure. Is it any wonder that fossil fuel power is cheaper? Not to mention that it has a 100+ year head start. It WILL run out you know, and it will do so before you even realize what is happening.
    All of us, and that means me too, need to start paying far more attention to our energy consumption. It has got completely out of hand.
    And as for the Saud family crying “broke”, what a crock.

  • change now

    Saudi Arabia needs to compensate me for ruining my air, cheap oil allowing rednecks to buy bloatmobiles not pay true cost of gas for decades flooding us w/cheap oil..ruining our roads, by not paying true cost, not allow for alternative fuels, alternative energy to be viable, thus, costing me thousands to fill up my vehicle with polluting petrochemicals…destroying the environment…this is even sillier than suing mcds for spilling hot coffee….saudi arabia needs to pay many countries for oil spills, such as exxon valdez, whose effects are still being felt…global warming will cost saudis a lot more than paying for emissions cuts….it is greed greed greed…U.S. taxpayers should bail them out as well…isnt GMs pieces of junk w/horrible gas mileage subsidizing saudis enough??? by bailing out GM/Chrysler, aren’t we helping saudis enough, US taxpayers will be footing the bill for decades……saudis have only had a century since industrial revolution to diversify their economy…away from oil…ignorant excuses are apparently not the monopoly of apathetic backwards americans…why do americans care anyway??…after saudis’ culpability for 911….I guess once we are off oil, we can just boycott them, right now we are beholden to chinese saudis, etc…so called neocons are so “patriotic” they keep us dependent on these bozos..it it wasn’t so ignorant it would be laughable…if we are going to lay blame where blame is due, as china and india blame us rightfully for all our emissions…then we should turn around and blame saudis….for tempting us with cheap “inexhaustible” oil…saudis’ whiny behavior is defenseless….we first need to pay poor starving africans whom we purposely keep poor for raw materials…and if we are going to just outsource u.s. jobs to china…we should subsidize china to pay poor chinese living wages….since we cant produce a da*( toothpick ourselves…support china shop at walmart!!! China needs our help!!! our prez needs to get some cojones and a spine since our last had neither…and finally get something done NOW and for our childrens’ sake!!! support emissions cuts now across the board…as by not doing so, we are just emboldening china and india…we need to promote green jobs here in the USA and bring manufacturing back…not support ancient GM but be progressive…we are not first world anymore, we are periphery at best and sinking fast….

    UAE is making progress, just another example of even supposedly backwards middle east racing past US, we shouldn’t let saudis blackmail us…when did we let other countries like china saudis rule our decision???? maybe since they own our entire debt…wait until dollar drops to zero and intelligent countries diversify from dollar….then saudis’ pseudo-problem will be miniscule…

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  • Goldcoaster

    hey everyone, your forgetting that the saudis are spending boatloads of money supporting terrorists planetwide!
    come on, lets have a little sympathy here!