Saudi Arabia has large natural gas reserves, totaling over 333 trillion cubic feet (tcf), putting it in sixth place only behind Russia, Iran, Qatar, the United States, and Turkmenistan. Saudi Arabia does not import or export natural gas for its energy needs, and therefore consumes all of the natural gas it produces. Saudi Arabia’s production of natural gas has increased over the last two decades, finally crossing the 4 tcf mark in 2020. During that same time, there has also been a strong correlation with the amount of greenhouse gasses the country produces, with a marked increase in greenhouse gas emissions over the same time period.
As part of its Saudi Vision 2030 plan, Saudi Arabia plans to substitute crude oil, fuel oil, and diesel with natural gas and renewable energy, which will likely fuel further increases in natural gas production and usage. In 2020, the country sourced approximately 61% of its electricity needs from natural gas, 39% from oil, and a tiny percentage from solar, up from 42% total power generation from natural gas in 2010.
The power generation and industrial sectors, primarily petrochemicals are the areas of the economy where Saudi natural gas is most used. The Saudi government currently plans to replace crude oil, fuel oil, and diesel with natural gas and renewable energy for power generation by 2030. This would likely increase natural gas demand and investment for natural gas supply over the next several years.
The effects of these policies mean an expansion in natural gas infrastructure and supply, which could mean an increase in greenhouse gas emissions during the same period. However, Saudi plans to expand natural gas infrastructure to capture, process, and transport most of the country’s associated gas production, will reduce the need for flaring associated petroleum gas, that is produced at an oil well, which releases methane. Therefore, Saudi’s goal to reduce or eliminate flaring by 2030 as a part of the World Bank’s zero flaring initiative is one of the fastest routes to reducing global warming. Saudi’s planned use of natural gas gets cautious thumbs up in relation to its overall climate goals as its likely expansion of natural gas production and usage could increase the amount of greenhouse gases but the use of capture, process, and transport technologies will reduce natural gas flaring, thereby reducing methane, a powerful contributor to global climate change.
This Post was submitted by Climate Scorecard Saudi Arabia Country Managers Abeer Abdulkareem and Amgad Ellaboudy