Baker Institute paper: Middle East is shifting to nuclear energy

Despite their huge fossil-fuel reserves, Mideast petrostates are turning to nuclear power to reduce their demand for exportable oil and gas while meeting fast-growing needs for electricity, according to a new paper from Rice University’s Baker Institute for Public Policy.

Credit: thinkstockphotos.com/Rice University

“Nuclear Energy in the Middle East: Chimera or Solution?” says countries like Saudi Arabia, the emirate of Abu Dhabi in the United Arab Emirates (UAE) and Iran are turning to nuclear energy because of multiple factors: accelerated growth in domestic demand for electricity; a desire to meet demand without enlarging carbon footprints; a history of hard currency surpluses that lend themselves to capital-intensive investment in domestic infrastructure; authoritarian governance; and weak civil society.

The paper was co-authored by Jim Krane, the Wallace S. Wilson Fellow for Energy Studies at the Baker Institute; Amy Jaffe, executive director for energy and sustainability at the University of California, Davis; and Jareer Elass, an energy analyst with 20 years of experience in the energy publishing business. It was published in the journal Bulletin of Atomic Scientists.

Against the backdrop of troubled natural-gas sectors, a number of regional oil producers – notably Saudi Arabia and Kuwait – have turned to burning increasing volumes of crude oil for power generation, especially during peak demand in the summer, the authors said. With 58 percent of global use in 2014, Saudi Arabia is the world’s largest user of crude oil for generating power. Iraq, Kuwait and the UAE were ranked third, fourth and fifth, respectively; when taken together with Saudi Arabia, all these countries account for about 78 percent of all the crude oil that is burned for electricity worldwide.

“In other words, every barrel that is burned for domestic power is a barrel that is not being refined into high-value products or exported overseas to generate income,” the authors wrote.

“In the Middle East, nuclear power, while more expensive than most natural gas-based generation, presents governments with a new source of electricity that relieves the pressure to continually expand upon their fossil-generation base,” the authors wrote. “Nuclear energy allows the state to maintain exports and undercut the cost of generating electricity with subsidized oil and gas, while providing political cover for enhancing the internal state security and surveillance apparatus.”

In recent years, Saudi Arabia announced plans to construct 16 nuclear power reactors over the next 20 years, while the UAE is roughly two years away from the startup of the first of four planned reactors. In Iran a large nuclear power reactor is operating after many years of construction, and a second is planned.

From the perspective of an authoritarian regime, further benefits may accrue from Saudi Arabia or UAE developing their nuclear energy sector, the authors said. For example, its rulers do not have to deal with the inherent delays caused by open hearings, parliamentary approvals, media inquiries or public sentiment. “Some have argued that the nuclearization process tends to strengthen the central state and the regime’s control over society,” the authors wrote. “These developments come through the advent of increased internal security measures, ostensibly justified by the technology’s inherent hazards.”

Finally, from the point of view of the autocratic regimes of the region, there may even be an argument in favor of nuclear power that is based on enhanced external security, the authors said. “For them (the autocratic regimes), the presence of nuclear plants enhances the balance of power and ensures the support of world powers,” the authors wrote.

Partial funding for the study came from GDF Suez.