72UNNATURALLY COOLFOSSIL- FUELED DEMANDWhile the Gulf is one of the few regions still to use oil for electricity, it
doesn’t rely only, or even mostly, on oil. In 2018, more than 99 percent
of electricity in the Gulf was generated by burning fossil fuels: 40 per-
cent from liquid fuels such as crude oil, diesel, and heavy fuel oil and
60 percent from natural gas.^12
The perceived value of natural gas has evolved considerably from the
days it was considered a nuisance and flared off. Over time, associated
gas (gas found alongside oil deposits) became the central source of sup-
ply for the power sector and an important industrial feedstock. For more
than thirty years, there was plenty of domestic associated gas to meet
the growing demand for electricity and desalinated water in all of the
Gulf monarchies.
Gas took on a role akin to that of a Hollywood stuntman: perform-
ing dramatic roles but getting little of the credit. Oil provided the rents
that underpinned state budgets, but natural gas was the workhorse that
enabled the expansion of the air- conditioned and water- intensive life-
style in the region’s homes, malls, and offices. Put simply, natural gas
made the searing Gulf fit for modern human habitation.
As with oil, the Gulf monarchies represent a world- class repository
of natural gas. The six GCC states alone harbor a more than a fifth of
the world’s conventional gas reserves. Add in Iran and Iraq, and the share
rises to beyond 40 percent of the world’s known supply, roughly 80 tril-
lion cubic meters (see table 5.3).
Despite these abundant reserves, the Gulf is a bit player in the global
gas trade. Saudi Arabia exports no natural gas whatsoever, and even Iran,
which holds more reserves than any other country in the world, exports
very little. Qatar is the only real Gulf participant in global gas markets;
boasting the third- largest reserves in the world, it was the second- largest
exporter in 2015.^13
The remaining five monarchies produced 217 billion cubic meters
(bcm) in 2016 and consumed even more, 227 bcm, which meant they
imported 10 bcm. The UAE and Kuwait are the main sources of this