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* Correspondence to: Ibrahim Dincer, Department of Mechanical Engineering, King Fahd University of Petroleum andMinerals, Box 127, Dhahran 31261, Saudi Arabia.

R E-mail: [email protected]

Contract/grant sponsor: KFUPM.

Received 30 October 2000Copyright 2002 John Wiley & Sons, Ltd. Accepted 17 November 2000

INTERNATIONAL JOURNAL OF ENERGY RESEARCHInt. J. Energy Res. 2002; 26:263}278 (DOI:10.1002/er.782)

Energy analysis of Saudi Arabia

Ibrahim Dincer*R and Bandar Al-Rashed

Department of Mechanical Engineering, King Fahd University of Petroleum and Minerals, Box 127,Dhahran 31261, Saudi Arabia

SUMMARY

This study provides an energy outlook for Saudi Arabia 's energy resources, their production and consump-tion, as well as their future projections. Crude oil, natural gas and re"ned products, and electricity are themain energy resources of the country. Saudi Arabia is the only country in the world that has the largestcrude oil reserves and this is one of the main energy producers. The high growth rates of Saudi Arabia 's

population and the sectoral energy utilization are the two main factors a!ecting its energy consumptiondramatically. Moreover, Saudi Arabia is not only one of the main energy producers in the world but is alsoone of the world's largest energy consumers per capita. Copyright 2002 John Wiley & Sons, Ltd.

KEY WORDS: energy; energy consumption; energy production; GDP; population; Saudi Arabia; sectoralenergy utilization

1. INTRODUCTION

Energy is considered to be a key player in the generation of wealth and also a signi"cant

component in the economic development (Dincer and Dost, 1997). This makes energy resources

extremely signi"cant for every country in the world. In bringing energy needs and energy

availability into balance, there are two main elements such as energy demand and energy supply.

In this regard, every country should take e!orts to attain such a balance and hence conduct

research and development studies to develop its own energy conservation programmes for the

existing and new energy resources. In conjunction with this, there is an ongoing action for energy

market reform, particularly in the International Energy Agency (IEA) countries. So, energy

market reform during 1998}1999 focused primarily on the electricity sector and to a lesser extent

on gas. Reform in both sectors o!ers strong potential gains in e$ciency through the unbundling

of production, transmission and distribution. The aim was to introduce competition among

suppliers and enhance supplier choices for consumers. In most IEA countries, market reform is

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expected to reduce prices considerably. However, in some countries where prices for consumers

had been subsidized, they have risen to allow the market to function and encourage investment.

Energy use has been a matter of policy concern since the 1970s. After the oil crises in 1973 and

1979, governments intensively promoted energy conservation. Then in the 1980s, the primary

focus shifted to air pollution caused by combustion of fossil fuels. In the recent years, energy use

and associated greenhouse gas emissions and their potential e!ects on the global climate changehave been the worldwide concern. Improving the end-use energy e$ciency is one of the most

e!ective ways to reduce energy consumption in the industrial, commercial, transportation and

residential sectors and associated pollutant emissions. To identify strategies that would improve

the energy e$ciency in the residential sector in an economically and environmentally feasible

manner, a large number of energy demand scenarios should be considered.

During the past decade, the world population reached about 5.3 billion. It has doubled in the

past 40 years, and it is likely to double again by the middle of the 21st century. The "rst

expectation is that the world's population will rise to about 7.0 billion in 2010. Even if the birth

rates were to fall so that the world population became stable by 2050, the total would then be

about 10.5 billion. Population growth is greater in developing countries than in the industrialized

countries, which include the OECD group, and the former USSR and East Europe. In 1960,

developing countries formed less than 70 per cent of the total population. Today, this share hasrisen to 77 per cent , and by the year 2050 it is expected to reach about 85 per cent (Dincer, 1998).

Oil is expected to keep the leadership among the existing energy resources in the next century

and therefore the problems will continue to arise as periodic shocks and #uctuations cause

a demand to adjust within a supply limit. World oil supply is estimated to have increased by 1.2

per cent to 7.52 mbd (million barrels per day) in 1998, exceeding the growth rate of demand.

Supply by OPEC countries increased by 2.7 per cent to 30.7 mbd (including 2.85 mbd NGLs),

while that of the non-OPEC countries rose by 0.5 per cent to 44.6 mbd during 1998. Supply by the

non-OPEC countries is projected to remain unchanged during 2000. In 1998}1999, oil prices

dropped sharply, then rose again. They fell to their lowest levels in 1998 since the 1970s, with real

prices dropping back to where they stood just before the Arab oil embargo and nominal prices to

post-embargo levels. Average wellhead crude oil prices in the U.S.A. bottomed in December 1998

at levels not seen since the great depression of the 1930s (only U.S. data are available that dates far

back) (IEA, 1999).

Under these circumstances, the OPEC members and non-OPEC countries were motivated to

make cuts in their production in an attempt to restore equilibrium in the oil market. The OPEC

members and non-OPEC countries agreed to a reduction in production aggregating 1.635 mbd

e!ective from the beginning of April, 1998, with OPEC's share amounting to 1.245 mbd, or 76.1

per cent of the total amount. Nevertheless, the oil market remained in a state of instability, and oil

prices did not record any remarkable improvement. Saudi Arabia, Venezuela and Mexico took

a joint initiative and reached an agreement to cut down oil production by OPEC and non-OPEC

countries by a total of 1.355 mbd with e!ect from the beginning of July 1998. As a result of

a continued imbalance at the beginning of 1999, OPEC and some non-OPEC countries reached

an agreement to cut down production by 2.029 mbd as of the beginning of April 1999, with theshare of OPEC countries amounting to 1.716 mbd, or 84.6 per cent of the total. This last

reduction had a favourable e!ect on the world oil prices (IEA, 1999).

Among the energy producing countries, Saudi Arabia's position is crucial with the largest oil

reserves and, therefore, is considered to be one of the major producers of energy. Crude oil,

natural gas, and electricity are the primary energy resources in Saudi Arabia, especially from the

264 I. DINCER AND B. AL-RASHED

Copyright 2002 John Wiley & Sons, Ltd. Int. J. Energy Res. 2002; 26:263}278

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energy sector point of view. In this regard, energy analysis of the country appears to be very

signi"cant for both itself and the rest of the world.

In energy analyses, three methods are currently used to model energy demand and supply at

the national level: the engineering method (EM), the conditional demand analysis (CDA) method,

and the neural network (NN) method (Guler et al., 2000). While the use of the "rst two methods

has been established over the past decade, the NN method is still in the development andveri"cation phase. The EM involves developing a housing database representative of the national

housing stock and estimating the energy consumption of the sectors in the database. CDA is

a regression-based curve "tting method in which the regression attributes consumption to

end-uses. The NN method models the energy consumption as a neural network, which is an

information-processing model inspired by the way the densely interconnected, parallel structure

of the brain processes information. The CDA method "nds considerably high applications in

energy analysis due to simplicity, e!ectiveness, applicability, cost, etc. However, it may provide

less accurate results for some speci"c, more #uctuating cases.

A bene"cial side e!ect of the rapidly growing concern with the problems of energy is the

impetus provided for quantitative research addressing the analysis of supply, demand,

environmental e!ects, policy issues, risk analyses, etc. In this respect, energy forecasting is

a subject of widespread current interest among economists and other professionals concernedwith the problems of energy supply and demand (Dincer and Dost, 1996). This interest is

simulated by such factors as the apparent end of the era of abundant low-cost energy, the

apparent need to depend on foreign sources for a much larger share of energy supply, increasing

governmental involvement in energy supply and the rise of environmental quality concerns. In

this paper, a broad perspective on the energy issues that challenge Saudi Arabia today is

presented by reviewing and evaluating, as well as projecting the critical and important character-

istics of Saudi Arabia's energy resources and energy production and consumption in various

sectors.

2. POPULATION

Population growth in Saudi Arabia has been recording high rates as trends around the world,

grown by an average of 2.6 per cent per annum over the period 1977}1998, rising from 8.060

million in 1977 to 20.33 million in 1998. The factors that contributed to the rise in the population

of Saudi Arabia included a marked improvement in the standard of living, health and social

conditions during the last three decades, a rise in per capita income and large in#ux of non-Saudi

labour force who participated in the implementation of development programmes. These factors

a!ected the population structure in favour of more population migration from rural to urban

areas, a rise in fertility rates, a decline in mortality rates among children and an increase in the

ratio of the youth to the total population.

The total population of the country in 1998 was 20.33 million, denoting an annual growth rate

of 2.2 per cent . The annual population growth rate of 2.2 per cent during 1998 made Saudi Arabiaone of the fastest growing countries in the world, while the average growth rate of the world

population stood at 1.7 per cent. Developing and industrial countries' population growth rates

were 1.7 and 0.7 per cent, respectively, during the same year.

Actual population data of Saudi Arabia available for the period from 1977 to 1998, which were

taken from SAMA (1999), were regressed to obtain projections for the future, as shown in

ENERGY ANALYSIS OF SAUDI ARABIA 265


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Figure 1. Population of Saudi Arabia.

Figure 1. Based on this regression, the following correlation is obtained with a correlation

coe$cient of 0.99:

TP"0.5865>!1151.5 (1)

where TP represents the total population and > represents the years.

According to our analysis, Saudi Arabia's population is expected to rise to 21.5 million by the

end of the year 2000, to 24.43 million in 2005 and to 27.36 million in 2010, denoting annual

growth rates of 3.6, 2.7 and 2.4 per cent, respectively, for each of the "ve-year period. Such

increments in the population will have a crucial e!ect on the energy demand and supply.

3. GROSS DOMESTIC PRODUCT (GDP)

The growth of gross domestic products of the country (at constant prices) became lower with an

increase of 1.5 per cent during 1998 as compared with a growth rate of 2.7 per cent in 1997. The oil

sector recorded a growth rate of 2.1 per cent as against 1.4 per cent in the preceding year. The

growth rate in the non-oil sector in 1998 was 1.2 per cent, while it was 3.4 per cent in the preceding

year. The private sector accounted for 72.8 per cent of the GDP (at current prices). This had

a negative growth rate of 12.4 per cent during 1998 to 126.1 billion U.S. dollars as compared to

a positive growth rate of 3.7 per cent in the preceding year. This was attributable to a decline in

the oil sector by 33.3 per cent as against a rise of 0.7 per cent in the preceding year. The non-oil

sector grew by 1.4 per cent as compared to a growth rate of 5.8 per cent in the preceding year. The

non-oil GDP de#ator increased at a marginal rate of 0.1 per cent during 1998 as against a rise of2.3 per cent in 1997. A breakdown of real GDP by major economic activities showed that all

sectors of the economy, excepting &manufacturing (including re"ning)', recorded an increase in the

agriculture sector that grew by 1.0 per cent in 1998 as compared with 2.7 per cent in the preceding

year. The public utilities sector (electricity, gas and water) resulted in a growth rate of 2.1 per cent

as compared to 3.2 per cent in the preceding year. The construction sector grew by 0.9 per cent



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Figure 2. GDP of Saudi Arabia.

against 3.0 per cent in the preceding year. The &wholesale and retail trade, restaurants and hotels

sector' recorded a growth rate of 0.5 per cent against a rise of 3.5 per cent in the preceding year.The &"nance, insurance, real estate and business services sector' grew by 1.1 per cent as against

3.7 per cent in the preceding year.

Actual GDP data of Saudi Arabia available for the period 1968}1998 (CDS, 1999) were

regressed in a linear form by means of the curve "tting technique to provide the projections up to

2030. In this regard, Figure 2 presents Saudi Arabia's actual and projected data. The following

correlation is, therefore, found to have a correlation coe$cient of 0.90 for such a forecasting

purpose:

GDP"1489.20>!2906560.34 (2)

where GDP represents the gross domestic products and > represents the years.

As shown in Figure 2, Saudi Arabia's GDP is expected to increase to 86731.66 million US$ in2010, to 101623.7 million US$ in 2020 and to 116515.7 million US$ in 2030, recording an annual

increase rate of 23.3, 34.6 and 43.0 per cent, respectively, as compared to 66486.00 million US$

in 1998.

4. ENERGY RESOURCES

Crude oil, natural gas and electricity are the main energy resources of Saudi Arabia. A series of

projects have been conducted in Saudi Arabia in order to develop, protect and improve these

essential resources. The energy resources are considered here to be the most important ones for

Saudi's economy and the world economy as well. These energy resources are discussed and

explained here in detail.

4.1. Crude oil

Crude oil is the most signi"cant energy resource not only for Saudi Arabia but also for the rest of

the world. It is also signi"cant to mention that Saudi Arabia is one of the biggest crude oil



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producers with the largest crude oil reserves in the world. By looking into the oil markets, it can

be seen that the oil markets witnessed a sharp decline in price during 1998. The average price of

Saudi Arabia light oil, for example, went down by 34.9 per cent, from US$18.80 a barrel in 1997 to

US$12.24 a barrel in 1998. The fall in prices re#ected the excess of supply over demand. Average

crude oil supply went up by 1.2 per cent, from 74.3 mbd in 1997 to 75.2 mbd in 1998, while the

average demand went up by 0.5 per cent from 73.5 mbd in 1997 to 73.9 mbd in 1998, resulting inan average surplus of 1.3 mbd in oil supply. The increase was due to a rise in the total demand

of non-OECD countries by 1.1 per cent and an increase in demand of OECD countries by 0.2

per cent. The total demand of OECD countries amounted to 46.8 mbd during 1998, rising slightly

by 0.2 per cent from 46.7 mbd in 1997. The total demand of non-OECD countries rose by 1.1 per

cent during 1998 from 27.1 mbd in the preceding year (IEA, 1999).

In addition, the world's average crude oil supply rose by 1.2 per cent during 1998 from

75.2 mbd in 1997. The share of OPEC in the world production during 1998 amounted to 40.7 per

cent or 30.7 mbd, recording a rise of 2.4 per cent as compared to 29.9 mbd in the preceding year,

while the share of OECD countries was 29.0 per cent or 21.8 mbd, declining by 1.0 per cent as

compared to 22.1 mbd in the preceding year (BP-Amoco, 1999).

According to IEA (1999), among the major non-OPEC producing countries during 1998, the

average production of U.K. rose by 4.0 per cent to 2.9 mbd and that of the former Soviet Unioncountries by 1.3 per cent to 7.3 mbd. The production of China remained at the same level of 1997

which amounted to 3.2 mbd. The average production of Norway and U.S.A. declined by 4.3 and

3.7 per cent to 3.1 and 8.3 mbd, respectively.

Saudi Arabia's crude oil production stood at 3,022 mbd during 1998 as compared to the 1997

production of 2924 mbd, denoting a rise of 3.4 per cent. Thus, its daily average production in 1998

became 8.28 mbd.

Actual data for the world's total crude oil production from 1973 to 1998 (BP-Amoco, 1999;

EIA, 1999) were regressed in a linear form by means of the curve "tting technique to provide the

projections up to the year 2030. The correlation obtained is as follows with a correlation

coe$cient of 0.92:

TCOP"20.24>!36608.89 (3)

where TCOP represents the total crude oil production of the world and > represents the years.

Thus, Figure 3 presents the actual data and projection, indicating a steady increase in the next

few decades. From our projections, it can be expected that the world's annual crude oil

production would rise to 4071.25 mega tons (Mtoe) in 2010, to 4273.64 Mtoe in 2020 and to

4476.03 Mtoe in 2030, denoting annual increase rates of 0.78, 4.81 and 9.11 per cent, respectively,

for each ten-year periods as compared to 4068.1 Mtoe in 1998.

Let us now look at the crude oil production in Saudi Arabia. The oil production and the

consumption data of Saudi Arabia (CDS, 1999; SAMA, 1999) were regressed in the linear form to

get the future projections (Figures 4 and 5) with the correlation coe$cients, i.e. 0.74 and 0.90. The

correlations obtained are

TCOP"162.52>!316004.15 (4)

TCOC"0.7036>!1349.5 (5)

where TCOP represents the total crude oil production of Saudi Arabia, TCOC represents the

total crude oil consumption of Saudi Arabia and > represents the years.



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Figure 3. Total crude oil production of the world.

Figure 4. Total crude oil production of Saudi Arabia.

From the regression analysis, the annual crude oil production of Saudi Arabia is expected to

rise, based on the trend, to 648.55 Mtoe in 2010, to 747.42 Mtoe in 2020 and to 846.29 Mtoe in

2030, recording an annual increase of 22.3, 32.6 and 40.5 per cent, respectively, as compared to503.71 Mtoe in 1998. Furthermore, the annual crude oil consumption will rise to 64.82 Mtoe in

2010, to 71.85 Mtoe in 2020 and to 78.89 Mtoe in 2030, denoting annual increase rates of 8.8, 17.7

and 25.0 per cent, respectively, as compared to 59.10 Mtoe in 1998.

Saudi Arabia's crude oil exports totalled 2332.5 mb (million barrels) during 1998 as compared

to 2257.3 mb in 1997, rising by 3.3 per cent. Its exports of re"ned products, on the other hand,



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Figure 5. Total crude oil consumption of Saudi Arabia.

stood at 499.7 mb during 1998 compared to 508.4 million barrels in the preceding year, recording

a decline of 1.7 per cent (SAMA, 1999).

A breakdown of the country's export of crude oil and re"ned products in regions indicates that

the bulk of its exports was accounted for by the Asian region and Far East. These two regions

accounted for 41.6 per cent of the total export of crude oil and 61.9 per cent of its total export of

re"ned products. Western Europe accounted for 27.2 per cent of the total export of crude oil and

0.7 per cent of its total export of the re"ned products. North America accounted for 23.3 per cent

of total crude oil and 3.4 per cent of re"ned products. The Middle East accounted for 3.3 per cent

of crude oil and 10.1 per cent of re"ned products (CDS, 1999).

4.2. Rexned products

Saudi Arabia's re"ned products production rose during 1998 to reach 584.1 mb, denoting a rise of

1.0 per cent over its production of 578.29 mb in the preceding year. Domestic consumption of

re"ned products, crude oil and natural gas stood at 673.9 mb during 1998 as against 636.8 mb in

1997, rising by 5.8 per cent. This increase was due to a rise in public consumption and oil industry

consumption by 6.8 per cent and 1.3 per cent to 566.7 and 107.2 mb, respectively. The increase in

public consumption was largely accounted for by a rise in the consumption of fuel oil, crude oil,asphalt and liqui"ed petroleum gas by 37.9, 12.0, 8.6 and 7.3 per cent to 37.3, 95.15, 6.2 and

10.0 mb, respectively, while the consumption of lubricating oil, jet fuel and kerosene fell by 5.5 and

1.4 per cent, respectively. The bulk of increase in oil industry consumption was accounted for by

a rise in the consumption of crude oil and fuel gas by 61.9 and 17.1 per cent, respectively, whereas

the consumption of diesel and natural gas went down by 2.4 and 2.1 per cent, respectively.



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Figure 6. Total production of re"ned products of Saudi Arabia.

In terms of relative shares, natural gas accounted for 33.6 per cent of total public consumption.

Diesel, crude oil and gasoline accounted for 21.4, 16.8 and 14.8 per cent, respectively. With respect

to oil industry consumption, natural gas accounted for 67.1 per cent of the total consumption

while the shares of fuel gas and fuel oil accounted for 14.6 and 10.2 per cent, respectively

(SAMA, 1999).

The actual data on the total production and consumption of re"ned products of Saudi Arabia

were correlated linearly and the following expressions with the correlation coe$cients of 0.96 and

0.97 were obtained:

TPRP"2.53>!4950.16 (6)

TCRP"4.1188>!8116.5 (7)

where TPRP represents the total production of re"ned products, TCRP represents the total

domestic consumption of re"ned products and > represents the years.

Figures 6 and 7 show the actual total production and consumption values and projections of

re"ned products of Saudi Arabia. As shown in the "gures, the annual domestic production of

re"ned products is expected to rise to 135.14 Mtoe in 2010, to 160.44 Mtoe in 2020 and to185.74 Mtoe in 2030, denoting an increase of 28.0, 39.0 and 47.6 per cent, respectively, as

compared to 97.4 Mtoe in 1998. Also, its annual domestic consumption of re"ned products is

expected to increase to 162.88 Mtoe in 2010, to 203.476 Mtoe in 2020 and to 244.664 Mtoe in

2030, denoting an increase of 30.8, 44.8 and 54.0 per cent, respectively, as compared to

112.31 Mtoe in 1998.



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Figure 7. Total domestic consumption of re"ned products of Saudi Arabia.

4.3. Natural gas

Natural gas is considered to be the second main energy resource in Saudi Arabia. The explora-

tion, development, production and consumption of natural gas are associated to that of crude oil.

From the analysis, we obtain the following correlations for natural gas production and consump-

tion of Saudi Arabia, based on the actual data from CDS (1999) with the correlation coe $cients

of 0.92 and 0.95:

TNGP"1.75>!3446.06 (8)

TNGC"1.6691>!3293.5 (9)

where TNGP represents the total natural gas production, and TNGC represents the total natural

gas consumption, and > represents the years.

Figures 8 and 9 exhibit the actual natural gas production and consumption data and

projections. It is therefore expected that Saudi Arabia's annual natural gas production will rise to

61.95 Mtoe in 2010, to 79.41 Mtoe in 2020 and to 96.86 Mtoe in 2030, denoting annual increase

rates of 33.2, 47.9 and 69.8 per cent, respectively, as compared to 41.4 Mtoe in 1998. Moreover, its

annual natural gas consumption is expected to rise to 61.39 Mtoe in 2010, to 78.08 Mtoe in 2020

and to 94.77 Mtoe in 2030, recording annual increase rates of 32.6, 47.0 and 56.3 per cent,

respectively, as compared to 41.4 Mtoe in 1998.

4.4. Electricity

Electricity is also one of main energy resources of Saudi Arabia. The private sector plays

a tangible role in the production of electricity through the investor-owned electricity companies,

while the General Electricity Corporation (GEC) undertakes the management and operation of



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Figure 8. Total natural gas production of Saudi Arabia.

Figure 9. Total natural gas consumption of Saudi Arabia.

electric power utilities in rural areas. Furthermore, it produces electricity, as a by-product from its

dual purpose water desalination plants that exist along the Saudi Arabian coasts, and sells it to

the electric companies operating in those areas. The government, in turn, has been playing

a signi"cant role by supporting the electricity companies by "nancing most of the capital projectsof these companies since 1975 through special allocations from Saudi Industrial Development

Fund (SIDF) in the form of long-term, interest-free loans (SAMA, 1999).

As of 1985, the GEC replaced SIDF by"nancing the capital projects through direct allocations

from its budget. Furthermore, the electricity companies have been "nancing the majority of their

capital projects from their own resources. In addition, the government supports the small-size



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companies through "nancial grants and assistance for management and operation. The govern-

ment has consistently pursued a policy to improve the conditions of electricity companies by

consolidating them into larger regional units in order to bene"t from economies of scale in

reducing production costs. Four regional consolidated companies were established by a Royal

Decree in the Eastern, Central, Southern and Western Regions. Each regional consolidated

company provides an administrative autonomy within the framework of the governmentregulation.

The total consumption of electric energy in Saudi Arabia rose during 1998 by 4822.7 mil-

lion kWh, denoting an increase of 5.2 per cent over the consumption during the preceding year.

Total sales of electric energy during the year stood at 97050.3 million kWh. All electricity

companies recorded increase in their sales during the year. The sales of SCECO Eastern Province

and SCECO Central Province rose by 6.4 per cent each. The sales of SCECO Western Province

and Southern Province, and electricity companies in Northern Province also went up by 4.6, 2.6

and 1.3 per cent, respectively. The SCECO Eastern Province accounted for the highest share of

38.7 per cent of total sales in Saudi Arabia, followed by SCECO Central Province (26.4 per cent),

SCECO Western Province (25.9 per cent), SCECO Southern Province (6 per cent) and the

electricity companies in the Northern Province (3 per cent) (CDS, 1999).

Furthermore, industrial electric energy consumption during 1998 went up by 1990.8 mil-lion kWh, recording a rise of 8.5 per cent over the preceding year's consumption. Total industrial

consumption of electric energy amounted to 25412.5 millionkWh during 1998, accounting for

26.2 per cent of the total sales of electric energy in the country. The Eastern Province accounted

for 87.8 per cent of the total industrial electric energy consumption (CDS, 1999).

As a result of the increasing production and consumption of electricity in the country, the

maximum peak load rose during 1998 to 19300.0 MW, denoting a rise of 7.4 per cent over the

preceding year. Actual power generation capacity (excluding energy generated by desalination

plants) during the year also increased to 20400.0 MW, recording a rise of 0.5 per cent over the

preceding year.

The electric energy data available for Saudi Arabia were correlated accordingly using the

regression method, resulting in the following expression with a correlation coe$cient of 0.96:

TEG"423.78>!826620.00 (10)

where EGC represents the total electricity generation capacity and > represents the years.

Figure 10 shows the actual total electric production of Saudi Arabia and the projection

obtained from the regression, indicating that Saudi Arabia's annual electricity production will

rise to 25178.0 MW in 2010, to 29415.6 MW in 2020 and to 33653.4 MW in 2030, denoting

annual increase rates of 19.1, 30.8 and 39.5 per cent, respectively, as compared to 20370.0 MW

during 1998.

5. ENERGY USE

Saudi Arabia is not only one of the world's major energy producers but is also one of the world's

largest energy consumers. Its primary energy consumption amounted to 100.5 Mtoe during 1998,

recording an increase of 4.2 per cent, as compared to 96.3 Mtoe in 1997. In order to observe how

the future changes may take place, we conducted a regression to correlate the available total

energy consumption data linearly using the curve "tting technique and obtained the following



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Figure 10. Total electricity production of Saudi Arabia.

Figure 11. Total primary energy consumption of Saudi Arabia.

expression with a correlation coe$cient of 0.93:

TPEC"2.3745>!4646.7 (11)

where TCPE represents the total primary energy consumption and > represents the years.

Figure 11 exhibits the actual data (CDS, 1999) on total energy consumption and projections

coming from the above correlation. It is expected that Saudi Arabia's annual primary energy

consumption will increase to 126.0 Mtoe in 2010, to 149.8 Mtoe in 2020, and to 173.5 Mtoe in

2030, denoting annual increase rates of 20.2, 32.9 and 42.1 per cent, respectively, for each of the



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Table I. Saudi Arabia's sectoral energy consumption (thousand barrels crude oil equivalent)*.

Sector 1986 1991 1996 2000 2005

1. Transportation sector 144059 148154 161120 174106 191663E Land transport 76468 103258 128307 140873 155783E Air transport 16250 28434 19107 20167 22192E Sea transport 51341 16462 13706 13066 73688

2. Agriculture sector 26250 41250 29250 9699 81403. Service sector 131776 169661 226562 308431 360566

4. Industrial sector 95554 130798 180300 440460 5784635. Commercial and residential sector 5910 7118 9626 10943 128126. Construction sector 14747 8834 9445 10943 11753

otal cumulative energy consumption 418296 505815 616303 954582 1163401

*Source: CDS (1999) and SAMA (1999).

ten-year period, as compared to 100.5 Mtoe in 1998. The country's energy consumption is mainly

due to an increase in both the population and in the sectoral energy utilization.

6. SECTORAL ENERGY USE

The rates of energy consumption by di!erent sectors are considered to be basic economic indexes

in analysing the economical growth and its activities, while expectations are taken care of in the

future development plans and their directions in each sector and the energy consumption in each

sector with expectation up to 2005 is given in Table I. The numbers in Table I represent a rise in

the cumulative energy consumption in all the sectors from 418 mb equivalent (1146 thousand

barrels per day) in 1986 to 616 mb equivalent (1688 thousand barrels per day) in 1996, denoting

a rise by 4.1 per cent per year, and it is expected that the cumulative energy consumption by the

di!erent sectors would increase by 7.3 per cent per year through the period 1996}2005 to reach

a value of 1163 mb equivalent (3186 thousand barrels per day) in 2005 (CDS, 1999).

In the transportation sector, land transportation is about 79.6 per cent of the cumulative fuel

consumption of transportation sector in 1996, and it is expected to be about 81.3 per cent in 2005,

while the cumulative fuel consumption in the transportation sector increased from 144.1 mb(394.7 thousand barrels per day) in 1986 to 161.1 mb (441.4 thousand barrels per day) in 1996,

denoting a rise by 1.1 per cent per day through the period 1986}1996, and it is expected that the

cumulative fuel consumption in the transportation sector would rise by 2.0 per cent per year

through the period 1996}2005 to reach an amount of 191.7 mb (525.2 thousand barrels per day)

in 2005.

The energy consumption of the agriculture sector has increased, since the increase in diesel

consumption from 3.5 million metric tons (72 thousand barrels crude oil equivalent) in 1986 to 5.1

million metric tons (105 thousand barrels crude oil equivalent) in 1996, donating a rise by 3.8 per

cent per year. It is expected that the diesel consumption in the agriculture sector would increase

by 1.9 per cent per year through the period 1996}2000 to reach an amount of 41.3 mb (113

thousand barrels crude oil equivalent) in 2000. Note that, the consumption in the agriculture

sector declined from 15.7 mb in 1986 to 8.7 mb in 1996, and it is expected that the diesel



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consumption would decline to 8.1 mb in 2005, which is the same as the diesel consumption in the

agriculture sector in 1996.

The energy consumption in the industrial sector amounted to 180 mb during 1998 or about

29 per cent of the cumulative energy consumption in the same year. The energy consumption in

the industrial sector increased from 95.6 mb in 1986 to 180.3 mb in 1996, denoting an increase of

6.6 per cent per year and it is expected that the energy consumption in the industrial sector wouldincrease by 13.8 per cent per year through the period 1996}2005 to reach an amount of 578.5 mb

in 2005, with a decrease in the gas consumption in the industrial sector from 88 per cent in 1996 to

44 per cent in 2005.

In the commercial and residential sector, the fuel consumption increased from 5.9 mb in 1986

to 9.6 mb in 1996, denoting a rise by 5 per cent per year and it is expected that the energy

consumption in this sector would rise by 3.2 per cent per year through the period 1996}2005 to

reach an amount of 12.8 mb in 2005.

In the construction sector, the diesel consumption declined from 9.1 mb in 1986 to 4.1 mb in

1996, and it is expected that the diesel consumption will increase by 3.6 per cent per year through

the period 1996}2005 to reach an amount of 5.6 mb in 2005. The asphalt consumption, in the

construction sector, decreased from 5.7 mb in 1986 to 5.3 mb in 1996, and it is expected that the

asphalt consumption will increase to 6.1 mb in 2005. Therefore, we expect the diesel and asphaltconsumption to increase slightly by 2.5 per cent per year through the period 1996}2005 to reach

an amount of 11.8 mb in 2005.

The energy consumption in the service sector amounted to 226.6 mb in 1996 which is about

36.8 per cent of the cumulative energy consumption which is about 616.3 mb in 1996. The energy

consumption in the service sector increased from 131.8 mb in 1986 to 226.6 mb in 1996, denoting

a rise by 6.6 per cent per year and it is expected that the energy consumption in this sector would

increase by 3.6 per cent through the period 1996}2005 to reach an amount of 360.6 mb in 2005.

7. CONCLUSION

In this study, an energy analysis has been conducted for Saudi Arabia to evaluate its energy

resources in terms of production and consumption and energy utilization in the main sectors and

to provide forecasting models for future projections. It is obvious that Saudi Arabia is not only

one of the world's major energy producers but also one of the world's largest energy consumers.

The high rates of growth of Saudi Arabia's population and hence the high-energy consumption in

various sectors are the two major reasons for the high-energy consumption in Saudi Arabia.

ACKNOWLEDGEMENTS

The authors acknowledge the support provided by KFUPM and the statistical data provided by CentralDepartment of Statistics of Saudi Arabia for this work.

REFERENCES

BP-Amoco. 1999. Statistical Review of=orld Energy. BP-Amoco: London.CDS. 1999. Statistics of Saudi Arabia. Central Department of Statistics, Ministry of Planning and Ministry of Finance

and National Economy, Riyadh.



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Dincer I. 1998. Energy and environmental impacts: present and future perspectives. Energy Sources 20(4/5):427}453.Dincer I, Dost S. 1996. On the energy resources of Canada. International Journal of Energy Research 20:595}607.Dincer I, Dost S. 1997. Energy and GDP. International Journal of Energy Research 21:153}167.EIA. 1999. Monthly Energy Review. Energy Information Administration: Washington, DC, 99/03, 130}134.Guler B, Fung AS, Aydinalp M, Ugursal I. 2000. Impact of residential energy conservation measures on national energy

consumption and greenhouse gas emissions. Proceedings of the 12th International Symposium onransport Phenomena,16}20 July, Istanbul, 751}758.

IEA. 1999. Energy Policies of IEA Countries, International Energy Agency: Paris.SAMA. 1999.hirty-Fifth Annual Report. Research and Statistics Department, Saudi Arabian Monetary Agency, Riyadh.



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