UNNATURALLY COOL75The Gulf ’s broadening industrial structure also contributes, given the
profusion of energy- intensive businesses in petrochemicals, fertilizer,
and aluminum, along with the oil and gas sectors themselves. In Qatar,
for example, the energy- intensive process of converting gaseous meth-
ane into liquefied natural gas (LNG) for export has added a huge source
of energy demand.
Even the hydrology of the Arabian Peninsula influences energy use.
There isn’t a single natural river or lake on the peninsula and virtually
no perennial surface water that is drinkable. Since so much of the Gulf ’s
fresh water is produced through energy- intensive seawater desalination,
water consumption is more directly tied to energy in the Gulf than
almost anywhere else.
Another reason that the Gulf monarchies consume so much oil and
gas is because it is readily available from local sources owned by the state
and because the cost of production is low.
All these factors contribute to the high rates of demand in the Gulf.
But it is prices— set at low, subsidized levels by the state— that play the
biggest role. Energy prices affect demand in three important ways.
First, prices directly influence consumers’ decisions about how much
fuel, electricity, or water they are willing to buy. When prices are low,
people buy more— sometimes deliberately, sometimes through careless
behavior. Low electricity prices enable residents to afford more indoor
cooling, either by acquiring a larger home or opting for colder indoor
temperatures on hot days, or both. Cheaper water allows consumers to
splash out, by installing swimming pools or water- intensive gardens.
Cheaper fuels enable poorer people to drive personal vehicles when they
might otherwise opt for public transport.
Second, prices affect demand in an indirect way, by influencing pur-
chases of energy- consuming equipment and its level of efficiency. When
energy prices are low, consumers have little incentive to replace low-
efficiency air conditioners or dishwashers or to buy high- efficiency appli-
ances in the first place. Same goes for vehicles. As in America, when gaso-
line prices run low, vehicle sizes run large.
Third, low prices also allow people to operate energy- consuming
equipment more often. Rather than running your swimming pool pump