In Saudi Arabia, nuclear energy for nuclear energy’s sake

By Lauren Sukin | July 28, 2015

In March, while world leaders were scrambling to salvage the Iranian nuclear negotiations in Lausanne, Saudi Arabia signed a $2 billion deal with South Korea to investigate the joint construction of two nuclear reactors over the next 20 years. Many pundits in the United States reacted to the news with suspicion: Was Saudi Arabia’s move toward nuclear energy actually a strategic cover-up for the development of nuclear weapons?

No, the truth is much simpler: The Kingdom of Saudi Arabia will build nuclear energy technology because it wants nuclear energy. Though this abridges the story, it’s important to consider that the Kingdom does have often-glossed-over yet legitimate reasons to desire nuclear energy in its own right.

Escalating energy demand. The Saudis have a problem with energy security. Electricity needs have skyrocketed because of a combination of rising consumer and industrial demand and the country’s increasing need for energy-guzzling water desalination.

In 2008, the country faced a 10 percent annual increase in electricity demand in its urban centers and a 7 percent increase nationwide. An increase in the domestic consumption of oil and natural gas has satisfied some of that demand, and Saudi growth seems to be leveling off, but electricity demand nevertheless continues to grow. The Saudi government now anticipates a need for a 107 percent increase in electricity generation by 2032, though others estimate the situation to be worse, requiring closer to a 250 percent increase by 2028.

Saudi Arabia’s consumer electricity demand is unusually high, partly because the Kingdom has traditionally kept energy prices at about 3 cents per kilowatt-hour (one fourth the average US price), giving consumers no incentive to conserve. That the Saudis are growing—in number and in wealth—also means more Saudis want more energy than ever before. The issue is only worsening: From 2000 to 2012, per capita energy use increased by more than 30 percent. And Saudi Arabia cannot simply raise prices, because the low cost is the result of a critical political deal to share oil wealth.

Energy-intensive industrial development puts another strain on energy resources. Part of the country’s growth—GDP rose by more than 4 percent in 2014—has come from the expansion of manufacturing activities. The Kingdom had more than 32 times as many factories in 2013 as in 1974, and its industrial spending over the same time period increased by 750 percent.

The third leg of increasing demand is fresh water, which comes from desalination plants that require their own power stations. Desalination is more common in Saudi Arabia than in any other country in the region, providing 70 percent of the water used by Saudi cities. It is the country’s only large-scale option: There are no permanent bodies of water in the country’s interior and very little rain.

Fossil fuel is for exports. Although Saudi Arabia has a vast stock of hydrocarbons, the Saudis cannot simply satiate their energy demand with them, at least not for long. As political analyst Maha Hosain Aziz noted in a CNN special report last year, “everyone from Citigroup to Chatham House has suggested Saudi Arabia—the world’s biggest oil exporter—could face oil shortages in the next 10 to 15 years.”

In theory, Saudi Arabia could burn its supplies and hope more are found. To a certain extent, this is the status quo; the country uses more than one fourth of its crude oil production domestically each year. But that strategy doesn’t make economic sense.

Saudi Arabia relies on energy exports for 90 percent of its government revenue. Because Riyadh can get more for its oil abroad than at home, it shouldn’t, and is trying not to, use fossil fuels domestically. With rising energy demand, energy diversity has become an ever-greater national priority.

Nuclear vs. renewables. Nuclear power provides energy security. Nuclear power plants have a life expectancy of 40 years or more and provide large amounts of relatively low-cost energy. Nuclear power also has the potential to resolve growing emissions concerns in the Middle East. Saudi Arabia hopes to build 16 reactors by 2032, and by 2040 it hopes to have added 17 gigawatts of capacity—enough to provide 15 percent of the country’s power requirement.

In the other corner is solar power. In 2012, Saudi Arabia announced an ambitious solar goal: 41 gigawatts of capacity by 2032, which would provide enough electricity to meet 20 percent of that year’s demand. However, that timetable is aggressive; solar power is expensive and virtually nonexistent in the Kingdom today. Moreover, Saudi Arabia has been slow to meet solar investment goals due to competing government interests and technical barriers such as sandstorms.

Of course, nuclear energy comes with its own challenges. It’s expensive—costing $4 billion to $10 billion per reactor—but Saudi Arabia isn’t just oil rich, it’s cash rich. Nuclear waste poses a technical challenge, but Saudi Arabia has tentatively identified suitable sites for disposal. There is also the risk of meltdowns or terrorism, but the Saudis have staffed the King Abdullah City for Atomic and Renewable Energy, an entire city dedicated to the cause, with qualified scientists and researchers working to reduce risks.

These problems are killing nuclear energy elsewhere. In the United States, for example, political fights about nuclear waste have dragged on without resolution, while high costs and public opposition because of safety concerns have chipped away at the domestic nuclear power industry. Though the United States remains the world’s largest nuclear energy producer, growth in the sector has stagnated, while global interest has grown.

Saudi Arabia, however, is prepared to leap many of nuclear’s biggest hurdles. And its regional compatriots, from the United Arab Emirates to Turkey, have also kick-started their own domestic nuclear power programs.

Energy or weapons? The key question stands: Is peaceful nuclear energy in the Kingdom just a precursor to its more malicious, military form? Perhaps the biggest determinant of whether a country will build a weapon is whether it wants one. Despite some chest-thumping, there is reason to believe Saudi Arabia does not.

Saudi Arabia has signed a memorandum of understanding with the United States and committed to nonproliferation projects including the Proliferation Security Initiative, the Global Initiative to Combat Nuclear Terrorism, and the Nuclear Non-Proliferation Treaty. There is no hard evidence that the country is setting itself up for a military nuclear program.

The Saudis’ first option for acquiring a nuclear weapon is Pakistan. The Kingdom provided generous funds for Pakistan’s nuclear project, even bankrolling much of A. Q. Khan’s notorious nuclear smuggling ring. Today, some Pakistani nuclear warheads are rumored to be earmarked for fast, free delivery to the Saudis. Lesser versions of the claim say Pakistan would be willing to sell “off-the-shelf” bombs, or at least their designs. Nevertheless, there’s no evidence that the Saudis have actually turned to Pakistan in this capacity, and when rumors on the subject flew in March, Saudi Arabia denied them.

The second option is DIY: build nuclear energy technology, and then use it to build nuclear weapons technology. However, Saudi Arabia doesn’t even plan to have its full fleet of reactors operational until 2040, and its first reactor won’t be online until 2022. That timeline leaves it decidedly behind Iran and makes a severe dent in any intentions the country might have to capitalize on the dual-use nature of nuclear energy technology. If the Saudis really want to go nuclear, they ought to speed up their first stages.

Saudi Arabia doesn’t seem to want a weapon, and it doesn’t really need one. As Selim Sazak and I recently argued in The National Interest, Saudi Arabia’s conventional superiority and current US security guarantees are enough to solve regional security concerns. And there are disincentives. If caught with a military nuclear program, the Saudis would face huge consequences: sanctions, a loss of faith by key international allies, the likely dismantling of any civilian nuclear program, and perhaps even military conflict—all of which are surely undesired.

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