The Kingdom of Saudi Arabia, which already desalinizes 24 million cubic meters of water per day, about half the world's total, is building the largest solar-powered water desalination plant in the world in the city of Al-Khafji on the shores of the Persian Gulf. This recent initiative to increase the country's water desalination capacity using green technology is a smart move because it is strategic and future-oriented.
Until recently, 90 percent of all the water desalination plants in Saudi Arabia ran on oil or natural gas. One cubic meter of water costs between 40 and 90 US cents to produce, depending on the price of fuel; it would be more profitable to simply sell the oil on the open market. The country uses a tremendous amount of energy--1.5 million barrels of oil per day--to provide power to the country's 30 government-operated water desalination plants. As oil prices have risen, the cost of desalinated water has increased as well, making this water production method even more economically unsound.
Since the 1970s, Saudi Arabia has had to dig deeper into its oil reserves to keep up with the demand for water. About 40 years ago, Saudi Arabia started to give massive agricultural subsidies to wheat farmers so that the nation could become self-sufficient in food. In the early 1990s, the country was paying farmers so much for wheat that they produced enough for export. The Saudis have since realized that food security is not worth the resources needed to support the requisite water production. For example, Saudi Arabia exports dairy products produced in some of the biggest dairy farms in the region even though it takes 1,000 liters of water to produce just one liter of milk.
To address this problem, the Saudi government has resolved that the kingdom will rely entirely on imports for food by 2016. Starting in 2008, the government began reducing wheat purchases from local farmers by 12.5 percent a year and plans to eventually discontinue all such subsidies.
Although this total food dependence may sound extreme, it is very rational. Since the introduction of government subsidies, food production has relied almost entirely on "fossil water," deep groundwater extracted from ancient aquifers in an energy-intense process. Using fossil water is bad business for several reasons. First, Saudi Arabia is capable of importing all of its wheat necessities using oil money. As long as food-exporting countries will trade for Saudi oil, the nation has no reason to lose money by growing its own wheat. Second, the kingdom could sell the oil now used to run the water plants to other countries for a profit. Finally, fossil water is nonrenewable, so Saudi Arabia would do well not to entirely deplete its ancient fossil aquifers. According to estimates, about 70 percent of these aquifers, more than what is considered naturally recoverable, have been depleted already from the increased water production of the past decades. Though simply buying water directly with oil money would seem to be an obvious solution, even the oil-rich Saudi Arabia cannot count on its oil reserves forever. This means that reliance on oil for water and food, while convenient, is short-sighted. …