Gulf States Taking Lead on Clean Energy Investments

The NYT did an article almost a month ago showing how the Gulf States are looking beyond their carbon riches to thoughts of becoming a clean energy exporter:

So even as President-elect Barack Obama talks about promoting green jobs as America’s route out of recession, gulf states, including the emirates, Qatar and Saudi Arabia, are making a concerted push to become the Silicon Valley of alternative energy.

They are aggressively pouring billions of dollars made in the oil fields into new green technologies. They are establishing billion-dollar clean-technology investment funds. And they are putting millions of dollars behind research projects at universities from California to Boston to London, and setting up green research parks at home.

“Abu Dhabi is an oil-exporting country, and we want to become an energy-exporting country, and to do that we need to excel at the newer forms of energy,” said Khaled Awad, a director of Masdar, a futuristic zero-carbon city and a research park that has an affiliation with the Massachusetts Institute of Technology, that is rising from the desert on the outskirts of Abu Dhabi.

Instead of insisting that their carbon resources will last forever, or even insisting that economies will always be dependent upon carbon, the oil-rich Gulf States are looking to hedge their wealth and market dominance by making huge investments in research and development in the major labs in many premiere western nations. And we know that the person who pays for the research typically owns the work product or at least the patents on resulting products; the country that exports the energy reaps the economic benefits.

Massive investment in an emerging industry is no guarantee that you will take the lead on that industry. And more minds and funds in the alternative energy game mean that you may drive down costs faster — and this is a key element to make alternative energy more attractive, more affordable across the board. Carbon-based energy had (and still does) have real benefits in this economy, not the least of which is that most of our energy needs are built on this single source.

But this points out the hopelessly small minded approach of the Drill Here Drill Now crowd. If we are to be energy independent, we will need to do that in a world where incentives to move away from carbon will increase and those able to develop efficient and effective technologies, deploy both technologies and renewable efficiency at a great price and to boost markets (and market share) for renewable and cleaner energy are countries poised to maintain their positions as economic engines. Drill Here Drill Now keeps up the dependence on a shrinking supply of carbon and dependence upon the Government to fund drilling activities. As a short term strategy, we will contribute little to the world’s supply of energy. But we could think past carbon energy to new technologies that will employ Americans, create new industries and provide us with a much needed set of things to produce and export. In other words, creating an economic segment that could give us a new and lucrative export — reducing the pressure on the American economy to stay in a fatal position of buying stuff we don’t need and providing the rest of the world an opportunity to buy something from us besides movies and McDonalds. Becoming a net exporter of energy (or at least technology) is important no just to energy independence, but also to long-term economic strength. There is a serious political aspect to this too — the carbon riches of the Middle East countries and Iran have been key to the long-term growth of Muslim extremist groups over a few decades. Most of these countries (Iran excepted) don’t necessarily fund these groups directly, but the river of money we send them to feed our addition to oil indirectly finds its way to the coffers of Al-Queda, Hamas, Hezbollah and other terrorist groups. Finding a way to slow down the the means by which these groups get funded is in our national security interests. Ceding a potentially lucrative new energy market to those who own the carbon markets is not.