WATER WARS

 

The rapidly industrialising third world is seriously short of fresh water and this will have a serious effect on their success or failure in move economies from subsistence to modern, in the space of a single generation. A second group of mostly rich Middle Eastern petroleum producers have their own problems of fresh water shortage, that will have a catastrophic effect on their plans to diversify away from oil extraction, in the face of massively increased non-OPEC oil production and a tough oil pricing environment.

AP

Looking at two cases, Egypt, an emerging third world Regional power in the Middle East with burgeoning population growth trying to handle international competitive threats to the upstream Nile river water resources; and Saudi Arabia attempting to diversify away from almost 100% dependence on oil production, into industrialisation, whilst having meagre and failing natural fresh water availability. With Egyptians surviving on just 40 Cubic Metres of water per head of population per year and the Saudis using 76 Cubic meters each, when the UN mandated 500 Cubic Metres for an industrialised First World water consumer, shows just how serious the problem is right now in Egypt and Saudi Arabia, let alone when the ‘demographic bulge’ hits their societies.

Linked to water scarcity, as a serious limitation to diversified economic growth, is the availability of inexpensive energy that might drive ‘artificial water’, that is sea water desalinisation, as a crutch for a serious and growing water shortage crisis. Cheap permanent energy availability will hamstring the plans of both of these nation states. The irony of this for the Saudis is breathtaking.

Both Egypt and Saudi Arabia risk serious political fallout internally unless they can solve the ‘water problem’, and soon, as their demographics explode and unrest and radicalism rises.

Of the two cases Egypt’s water crisis is probably the most hopeless, the most dangerous, but also the easiest to solve. The Aswan Dam project on the upper Nile, for all of its faults, gives Egypt the chance to weather the demographic ‘bulge’ that is underway and maintain the capability to resource the commodities needed to service its population growth. UNLESS water harvesting from the Blue and White Nile doesn’t cut off Egypt’s water at its source. Even so, Egypt still faces a ‘water deficit of 7 billion cubic metres annually. Without the Aswan dam watering almost 30,000 Km of canals supplying water to farming, Egypt as a nation state would die. Yet these open canals waste 3 billion cubic metres of water a year through evaporation. Pipes would fix this problem but Egypt does not have the financial resources available to carry off such a project within the required timeframe.

More worrying however, and of immediate concern is the plan by Egypt’s upstream neighbouring nation states to harvest Nile water before it reaches Aswan. Ethiopia is building the Grand Ethiopian Dam (GERD) on the Nile headwaters of the Blue Nile. Egypt traditionally, through colonial era treaties, has access to 90% of Nile water but the threat of GERD looms as Ethiopia appears set to restrict the release of Blue Nile waters. This is the tipping point for the first of many ‘water wars’, as demographic and industrial need, hit the wall of water resource scarcity.

Egypt is not alone in the Middle East however as Yemen, Jordan, Syria and Algeria all face their own water crises, where resources to allow for ‘artificial water’ (desalination) are just not available on the scale needed. Syria and Jordan might get away with depending on Turkey for their deficit water resource, but getting the water to where people live is going to be very expensive, at as time when economically these nation states are struggling financially.

 

Now the case of the Saudi Water Crisis.

With a rapidly growing population, in an era of restricted oil revenues, war and unrest raging amongst Saudi Arabia’s neighbours; an internal security problem; the plan to replace foreign specialists with Saudi technicians; and meagre natural water, the Saudi’s have their work cut out for them. The Saudi ‘Vision 2030’ plan to diversify its economy away from almost 100% dependence on oil production, looks increasingly fraught. Saudis currently survive on just 76 Cubic Metres of water per head per annum when the UN suggests 500 Cubic Metres, as ideal.

The Saudi Eastern aquifers are classified as “Fossil Waters”, laid down over the millennia and now being grossly overharvested to produce grain harvests, that have pushed Saudi Arabia in the 1980s to be the sixth largest producer of wheat globally. Within a generation (20 years) this ‘fossil water’ resource will be totally exhausted, as the aquifers need centuries to fill. Even knowing this agriculture remains the largest user of water in the kingdom. Coming up fast however is the requirement for water to facilitate industrial production, mandated in the Saudi Vision 2030 Plan.

With industry water needs growing at 7.5% per year the only option is desalination, or ‘artificial water’. Investment in the desalination industry is currently available but demographics threaten to upset this. No matter how much money the Saudis pour into desalination they will never reach the mandated UN standards for First World water availability of 500 Cubic Meter per head. Saudi Arabia might be driven to co-operate with Israel, the global technology leaders in desalination technology and water reuse. Currently as the Saudis struggle with dwindling water resources they maintain an illogical policy of water subsidisation that encourages one of the highest personal water consumption rates in the world and waste. The loser in time will be industry and agriculture as Saudi Arabia fritters away its most vulnerable resource.

The Saudis are trapped in a box. They continue to live beyond their water resources whilst knowing that they must diversify away from almost 100% dependence on oil revenues to maintain their state. Compounding this resource profligacy Saudi Arabia, and OPEC, faces a continued oil glut as US oil production surges, holding down the price of oil and putting pressure on the Saudi exchequer, to simultaneously finance both the necessary desalination efforts, and industrial diversification. Finally the House of Saud faces destabilised borders in Yemen; the cost of their military adventures elsewhere in the Middle East; the threat of a nuclear Shi’a Iran challenging Saudi regional hegemony in the Levant; necessary economic diversification away from oil production; all at a time of destabilising demographic growth. Apart from the challenge of a Shi’a nuclear Iran, the main threat to the House of Saud is internal.

If Saudi Arabia fails to succeed in its Vision 2030, and the augers are not encouraging for that, it will face an internal uprising of fundamentalist Wahibbist Islamic warriors that will threaten to sweep away the House of Saud, and replace it with a revolutionary Sunni Islamism Theocratic Republic, that will destabilise not only the Middle East, but the world.

Water Wars Indeed !