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S06 ORME 7 2016 Analysis 03_Layout 1 26/10/2016 10:54 Page 28

 Analysis

measured in per capita fuel consumption. In 2014, the region consumed 9.2 tonnes of oil equivalent (TOEs) per head, compared to the global average of four TOEs per head. According to the BP database, Qatar (23 tonnes); UAE (12 tonnes); Bahrain (11 tonnes); and Kuwait (10 tonnes), respectively, were ranked amongst the largest energy consumers per head. Comparable figures for the USA, Russia, Germany, France and Japan were 7.5, 6.0, 4.9, 4.8, and 4.5 tonnes per head, respectively, during 2014. Moreover, the GCC region’s energy usage is not only currently high, but has also grown rapidly. For example, energy offtake per person in Qatar, Saudi Arabia and UAE has surged at an annual rate of 2.6, 2.5, and 1.9 per cent, respectively, in the last four decades. The average growth rate for economies with similar income per capita was just one per cent. In fact, advanced economies, notably the USA, Germany and the UK, reported average negative growth, reflecting a steady drop in oil intensity (i.e. the quantity of energy required per unit

Table1: Hydrocarbons data for the GCC countries, 2015 Natural gas Gas output Natural gas Oil Reserves Oil Output

Oil Usage

reserves

Bn bbl

Mn tonnes

Mn tonnes

Tcf*

Bn cu m**

consumption Bn cu m**

Bahrain

---

---

---

6.1

15.5

---

Kuwait

101.5

149.1

23.6

63.0

15.0

19.4

Oman

5.3

46.6

---

24.3

34.9

---

Qatar

25.7

79.3

10.9

866.2

181.4

45.2

Saudi Arabia

266.6

568.5

168.1

294.0

106.4

106.4

UAE

97.8

175.5

40.0

215.1

55.8

69.1

GCC Total

496.9

1,019.0

242.6

1,469.0

409.0

240.1

% of Middle East total 61.8

72.1

57.0

52.0

66.2

49.0

% of world total

23.4

5.6

22.3

11.6

7.0

29.3

* Tcf = trillion cubic feet ** Bn cm = billion cubic metres Source: BP Statistical Review of World Energy, June 2016.

output or activity), and efficiency improvements in the transport sector. Concurrently, excess consumption places GCC countries among the world’s biggest emitters of carbon dioxide per capita, thereby causing environmental damage. Qatar is No.1 emitter (56 tonnes/head),

Table 2: Prices for energy products: GCC and the USA

followed by UAE, Kuwait and Bahrain at 29, 28 and 22 tonnes/head, respectively. In 2014, global average carbon dioxide emissions per capita were around 10 tonnes. Higher emission rates are even more striking since GCC countries (unlike South Africa or China) use negligible coal feedstock in power generation, the most carbon-intensive fossil fuel. Sustained low energy prices have discouraged new investments to improve energy efficiency, as documented by the US think-tank Brookings Institution, in its paper “LowCarbon Energy Transitions in Qatar and the GCC Region (2014).”

Gasoline Diesel 10 Oct 2016 Litre, US$

Natural Gas Electricity Per capita US$ per Mn Btu* US$ per KWh** electricity Sep 2016 (avg.) Jan-July 2016 usage# 2014

Bahrain

0.42

0.31

2.75

0.04

9.0

Kuwait

0.34

0.31

1.50

0.01

19.0

Oman

0.46

0.47

3.00

0.04

6.5

Qatar

0.37

0.38

0.75

0.05

16.5

Heavy fiscal burden

Saudi Arabia

0.24

0.12

0.75

0.10

8.0

UAE

0.46

0.48

0.75

0.12

18.0

GCC average

0.38

0.34

1.71

0.06

12.8

GCC maximum

0.46

0.48

3.00

0.12

19.0

USA pre-tax

0.66

0.63

2.90

0.10

Fuel subsidies impose a significant cost for the national authorities, i.e. payments made to energy producing companies to compensate for the difference between actual production cost and domestic selling price. In 2015, GCC countries, excluding Saudi Arabia, reported an on-budget fiscal cost from cheap energy at US$16.2bn, of which Kuwait and UAE accounted for US$11.6bn. Budget costs, however, do not include the loss of potential revenue or

* Mn Btu = million British thermal units **KWh = Kilowatt-hour # billion Kilowatt-hours per million population US natural gas price was quoted at US$3.27 mn Btu (10/10/2016) Sources: GlobalPetrolPrices.com; EIA, International Energy Statistics

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