Alternative energy and alternative facts

If countries that have relied on fossil fuels for the last fifty years are changing course, why is the US insistent on regressing towards coal?

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The smock mill Goliath in front of the wind farm Growind in Eemshaven in the Netherlands

WASHINGTON, March 7, 2017 – That someone would use the word “clean” to describe coal sounds like an oxymoron, and yet Donald Trump has continually called coal “clean” as both candidate and now President. In doing so, he is signaling to the world that the US under his leadership will be on the wrong track when it comes to energy and the economy.

For evidence of just how retrograde Trump’s positions on energy and climate really are, look no further than the oil producers of the Persian Gulf. On the other side of the globe from Washington, more than one oil-rich Gulf state is moving in another direction at the same time the US turns its back on the green energy revolution. At the same time Trump ponders scrapping the Paris climate agreement, the United Arab Emirates (UAE) is investing in clean technologies even while its lucrative oil fields continue to produce.

At the same time Trump ponders scrapping the Paris climate agreement, the United Arab Emirates (UAE) is investing in clean technologies even while its lucrative oil fields continue to produce.


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Elon Musk and Tesla recently became the poster children of this forward-thinking stance, with Musk traveling to the country to announce he would start selling luxury electric cars in Dubai. California-based Tesla is accepting online orders from customers in the UAE alongside a pop-up store in the Dubai Mall and a Tesla service center in Dubai that will open in July. This, coupled with the UAE’s plans to go green, marks a shift in how the world’s fossil fuel giants are thinking about energy. In January, the Emiratis announced their plans to invest $163 billion in alternative energy use over the next three decades.

In January, the Emiratis announced their plans to invest $163 billion in alternative energy use over the next three decades.

From Musk’s perspective, the move makes perfect business sense. The UAE market, with high incomes and high demand, is perfect for Tesla. The Model S and Model X will go on sale from this summer, marking the company’s first foray into the Middle East. Clean energy-based initiatives in the region can’t be limited to just Tesla or just the UAE, however. They are part of a larger trend in the Persian Gulf.

That trend is the byproduct not of altruism but of an urgent need to hedge bets against oil exports. After the shale boom in the US cratered oil prices, the neighborhood felt the crunch: Saudi Arabia has seen slowdowns in its once-booming construction market and has been faced with major deficits to fill, while Dubai’s economy also had to handle the potential for a slump.

These regional economies are now trying to diversify their markets in haste.


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What those new markets will look like is a matter largely to be determined by outsiders. These states are trying to attract foreign investors and producers to generate jobs and stimulate local non-oil industries. Saudi Arabia, for its part, is teaming up with Japan’s tech giant Softbank to launch a tech fund in London. The SoftBank Vision Fund will step up investments in technology companies globally and become the biggest investor in the sector; Saudi Arabia has a majority share in the venture ($45 billion out of a total of a $105 billion announced in January 2016).

As it turns out, a substantial part of the regional diversification drives will unfold in London: Saudi Arabia’s state-owned oil producer, Aramco, is looking closely at the city to host its awaited IPO next year. With the Gulf states seen as a major trade partner for the UK after it exits the European Union, British Prime Minister Theresa May joined Gulf Arab leaders at their summit in Bahrain in December to push forward discussions of free trade arrangements with the six Gulf Cooperation Council (GCC) states – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE.

Ironically, an important facet of post-oil economies in the Gulf will entail freeing up as much of the stuff as possible for export by cutting domestic consumption. That makes alternative energy a logical sector to invest in for both sustainability and profitability. The UAE, in its The State of the Future report released at the World Economic Forum Summit in Davos in January, stated that solar power, electric, and self-driving cars would become integral parts of global transport and lifestyle systems. Following the trend, Dubai is currently working on $13.63 billion Solar Park, driverless cars in Dubai, and a Hyperloop connection between Dubai and Abu Dhabi.

Incredibly, a Dubai Future Foundation (DFF) report suggests that electricity generated from renewable sources in the UAE will be greater than the current combined demand of China, India, and Brazil – the world’s most populous countries. Additionally, 15 percent to 20 percent of households will run on solar energy by 2025. Electric, driverless cars will make up 90 percent of vehicles by 2035—which is music to Tesla’s ears. All that energy capacity means that locals will no longer burn through the country’s fuel reserves, helping it maximize profits as it builds the economy that comes after.

In all this, there is a lesson for the Trump administration. If countries that have relied on fossil fuels for the last fifty years are changing course, why is the US insistent on regressing towards coal? Beyond its emissions, coal is being outcompeted by shale in America and renewable sources all over the world. Half a dozen coal mining companies in the US have filed for bankruptcy in the past two years, and technical advances in fracking have made natural gas production more economical than coal mining.

Trump, of course, responds to all this with his own patented brand of alternative facts, but the Emirates and their neighbors have a much better sense of which way the winds are blowing.

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