While a growing number of states have announced their civilian nuclear energy ambitions during the last 12 months, no other country is likely to have more of a psychological impact on the nuclear energy picture than Saudi Arabia. We believe the Kingdom’s natural gas and water issues will lead them to nuclear, sooner instead of later, potentially as early as this year.
After our interview with Kevin Bambrough, which ended in the generally read article, ‘Explosion in Nuclear Energy Demand Coming,’ we began more awfully researching Bambrough’s conclusion. He believes the overwhelming growth in nuclear energy will continue to drive the uranium bull market much higher than is suspected. He believes the uranium renaissance has gone outside the envelope of simply a mining inventory dearth. We researched this further in the course of our inquiry into uranium and geopolitics. We were stunned by what we found and continue to be surprised by how accurate Mr. Bambrough’s prediction is probably going to play out. We included the special sub-section, which follows, in our soon-to-be-published, A Practical investor’s Guide to Uranium Stocks. Below is a quick preview.
An April 2006 UPI stories item confirmed what many have long believed. It won’t be long before Saudi Arabia launches a nuclear project. Kuwaiti researcher Abdullah al-Nufaisi told seminar visitors in Qatar that Saudi Arabia is preparing a nuclear program. He said the govt was being persuaded to launch a nuclear project by Saudi scientists, but hadn’t yet received the blessing by the royal family. Social, not energy, issues could help the Saudi royals embark on a sizeable nuclear program.
Of the dominion of Saudi Arabia’s twenty-four million subjects, more than 40 % are under eighteen years of age. While still manageable, the nation’s infrastructure is not prepared to cope with its explosive population expansion. The 2 largest issues facing Saudi Arabia are potential water and electricity shortages. True, its super oilfields may also have topped in production and might move into tertiary recovery, but that is unknown. An Islamic revolution, similar to what Iran suffered in the 1970s is probably foremost in the King’s mind. Civil disturbance might come about should his subjects suffer with inadequate electricity and inadequate water supplies. One need only look at the widespread electricity shortages Syria experienced in the 1980s and early 1990s.
As reported in the October fourteen, 2004 issue of Arab Oil and Gas, the Saudis lag well behind Bahrain, Kuwait, Qatar, and the UAE in per capita energy usage. The rate of natural gas consumption, which produces Saudi’s electricity, increased less than Egypt and Syria. Total power usage dropped by 3.5 percent in 1999 and two thousand.
The internationally heralded’Gas Initiative’ of 1998 was the kingdom’s try to lure major western oil firms back into the country to help develop its natural gas reserves. After major oil companies spent $100 million in due diligence to evaluate the Saudi natural gas reserves, the initiative quietly dropped off the world’s radar screen. A Shell Oil executive, whose company is exploring for gas in the country’s Empty Quarter, told Bloomberg Daily Energy news this was a high-risk venture with a low likelihood of finding large reserves. In Matthew Simmons’ Twilight of the Desert, he repeated what he was told by an incognito senior oil executive,’The reservoirs are crummy.’
The Saudis need water and electricity to match their population growth. Nuclear energy is likely to be the solution to both those Problems. Continued dependence on natural gas may prove a fatal industrial and social error for the Royal Family. Our research predicts the Saudis should announce a large-scale civilian nuclear energy program in the future.
Let’s discuss the water problem first. In a 2002 story reported in the Oil & Gas book, Saudi Arabia’s 30 desalination plants produce about twenty-one % of the planet’s total desalinated water production. Virtually seventy percent of the local water drunk in cities comes from desalinated sea water. As the population grows, Saudi Arabia may spend another $40 bln to build more desalination plants.
Half of the world’s desalination plants are in the Middle East. Most are powered by fossil fuels, particularly natural gas. Changing sea water to drinkable water is energy in depth. The commonly used desalination method of multi-stage flash ( MSF ) distillation with steam needs heat at 70 to 130 degrees centigrade and consumes up to 200 kilowatt hours of electricity for every cubic meter of water ( about 264 gallons ). MSF is the most well-liked technology, but some are looking towards reverse osmosis ( RO ). RO consumes about 6 kilowatt hours of electricity for each cubic meter of water.
The country has got a tandetron accelerator and a cyclotron able of isotope production for medical purposes. Saudi’s nuclear scientists have been concerned with many states to help their country develop a bonafide nuclear energy program. In late March 2006, a German magazine reported Saudi Arabia has been secretly working on a nuclear program with help from Pakistani scientists. Ironically, many are convinced Saudi Arabia helped finance Pakistan’s nuclear program. Because Saudi scientists lack the proven experience of the entire nuclear fuel cycle, Pakistan’s experience, over the past decade, could help accelerate the dominion’s pursuit of a civilian nuclear program.
While lacking proven uranium deposits, the country’s Tabuk region has low-grade amounts of uranium and thorium. However, Saudi Arabia has significant phosphate deposits, which some believe could be exploited. The nation’s 2 biggest deposits reportedly measure about 750 million metric tons, averaging between 19 and 21 p.c P2O5. Mined by the Saudi Arabian Mining Company and the Saudi Basic business corporation, fertilizer plants at the Al Jubail economic City produce about 4.5 metric tons of P2O5 annually. While extraction of uranium from phosphates can be an expensive proposition, the phosphates might provide a ready supply of uranium for the state’s nuclear desalination plants. Then, it might be a matter of uranium enrichment, of which both the Russians and the French would be scrambling to supply the kingdom.
While the Saudi program many not immediately impact world uranium costs, the kingdom’s call to advance its nuclear program, outside the research and medical stage, would signal the complete world that nuclear energy programs will be a first expansion sector for the next fifty to one hundred years. If the Saudis also commence desalination projects using dual-use nuclear reactors, this will change the entire landscape of the water situation for the Middle East as well as Africa. And it would most likely spark a serious stampede of the dominion’s neighbors into the global nuclear renaissance.
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