A West Asia without oil!
View(s):When the world came together at climate change talks titled COP28 in November 2023 in Dubai in the United Arab Emirates (UAE), the focus was on cutting fossil fuel (coal, oil, and natural gas) to reduce emissions which harm the environment.
Ironically while experts were seen thrashing out an agreement to see this happen amidst a reduction in oil production across the world, the host of the conference – the UAE and its state oil firm Adnoc was targeted to drill 42 per cent more oil by 2030, according to market analysts.
So how do you cut production when one of the world’s biggest oil producers was ramping up output while a conference at its doorstep was proclaiming to cut oil production with suggested timelines?
This is also where the emergence of the electric vehicles comes into play and as I was reaching out to Ruwanputha, my young economist-buddy, for his thoughts on electric vehicles and an era where oil dries out in West Asia, my Thursday morning was disrupted by the conversation by the trio who were at the gate where Aldoris, the choon- paan karaya, had arrived in his mobile bakery tuk-tuk.
While dishing out maalu-paans, Aldoris said he had, for the first time, seen an electric vehicle on the road. “Kisima saddayak thibbene ney vahanen (There was no sound from the vehicle as it moved),” he said, sounding amazed. “Mae wagey vahana godak thiyena-wada? (Are there many of these vehicles?)” asked Serapina. “Mama mae wagey vahana dekala nae mokada pita ratin gennana vahana adu nisa (I have not seen any, maybe because there is a restriction on vehicle imports,” noted Kussi Amma Sera. “Mae wagey vahana parey thiyenawanam mokada saddey adui (It would be wonderful if there are more of these vehicles on the road. There would be less sound),” added Mabel Rasthiyadu.
Just before calling Ruwanputha, I checked the Internet for information on the world’s largest producers of oil and accordingly the 10 largest producers are the United States, Saudi Arabia, Russia, China, Canada, Iraq, Iran, UAE, Brazil and Kuwait. While we were prone to believe that West Asia was the largest producer (in terms of total production and putting together the West Asia countries, it might be the biggest) it appears that the US is the single largest oil producer and when other environment-friendly fuels take charge of the source of fuel for everyday needs, the US, unlike the dependence on West Asian countries, won’t be affected as it has a vastly diversified economy and doesn’t depend solely on oil income. In fact according to 2020 data, non-fossil fuel sources accounted for 21 per cent of US’s energy consumption.
“How do you think the Middle East (West Asia) will survive when their oil wells run dry in the next 50 years?” asked Ruwanputha. “It seems these countries are preparing for such a period but I wonder, at the same time, whether this region will still be a source of employment for millions of workers from Asia, Africa and Europe,” I said.
“While some countries in that region seem to be prepared for such an eventuality, it might come as a shock for others particularly for countries like Sri Lanka that sends at least 250,000 workers every year to West Asia for employment,” he said.
“So how should these (labour-source) countries face the future?” I asked. “Well they have to gear their economies with foreign investment, exports, tourism and sources of income. Whether they are preparing for such a future remains to be seen,” he said.
In terms of the usage of fossil fuels, the world is changing more rapidly with the development of electric vehicles and those that can run on non-fossil fuel sources, especially solar power. The five major renewable energy sources are solar power, geothermal energy, wind energy, biomass from plants and hydropower.
According to recent official reports, Sri Lanka has announced plans to replace all state-owned vehicles with electric or hybrid models by 2025 that would eventually extend to private vehicles by 2040. Whether this is doable by next year is anybody’s guess given the level of the state financial resources, in a very precarious state as at present.
The transition to electric-powered vehicles from fossil fuel is gaining momentum across the world primarily for two reasons, due to climate change brought on partly by fossil fuel emissions and secondly when oil output runs out. Leading this change is Norway which is poised to end the use of petrol and diesel vehicles from its roads by around 2025.
Picture a future of soundless vehicles on the roads when all vehicles are powered by electricity with charging stations across the country? Is that possible? Well 40 years ago, there were no mobile phones and, in particular, elderly citizens were perfectly happy. Now even with smart phones which serve as a communication tool, a clock and alarm clock, a radio, a music box, a book and many more add-ons, we are looking for more features and updates.
Today two of the biggest electric vehicle producers are billionaire Elon Musk’s Tesla and China’s BYD. According to available information, in the last few months of 2023, BYD overtook Tesla to become the world’s largest electric vehicle manufacturer with more electric vehicle sales in multiple locations.
Thus from fuel guzzling vehicles, to hybrids and now completely electric, brace yourself for a future of soundless vehicles on the road.
So how are the fuel-income-dependent economies of West Asia preparing for a future sans oil? And in the same context, how is Sri Lanka and other countries dependent on West Asia as a labour-generating destination preparing for an era where there may be less jobs to offer in that region?
Dubai, in fact, was first off the blocks in realising that it cannot survive on oil income alone and has intelligently created an economy based on oil and gas exports, followed by tourism, real estate, trade and logistics, and financial services. With one of the largest airlines in the world – Emirates, this city in the UAE, is fast becoming a growing business and tourism hub in the world.
Saudi Arabia, Abu Dhabi, Oman … they are also developing and putting together similar plans to face a future without oil. Vision 2030 Saudi Arabia was launched in 2016 aimed at attracting foreign investment, reducing the country’s dependence on oil revenues, facilitating growth across various sectors like entertainment, logistics and tourism.
As I neared the end of today’s column, sipping my second mug of tea, I was left wondering what Sri Lanka’s plans would be when we would be confronted with a sharp drop in job opportunities in a market that catered to about 1.5 million jobs annually? Are we prepared for such a future?
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