Close Menu
  • Featured
    • News
    • Consumption
    • Environment
    • Industry
    • Opinion
    • Policy
    • Production
    • Storage
    • Transmission
  • About Us
  • Advertise
  • Contact Us

Subscribe to Our Newsletter

News, investigations, and analysis — our top stories every morning to start your day right.

Trending
Illustration of a groundbreaking development in solar technology with stabilized perovskite cells. Image generated by AI.
“These Scientists Just Solved Solar’s Biggest Problem”: China Unveils Breakthrough Material That Eliminates the Main Flaw in Perovskite Solar Technology
Illustration of Google's partnership with Commonwealth Fusion Systems for nuclear fusion energy. Image generated by AI.
“These Are Google’s Boldest Moves Yet”: Tech Giant Secures 200 Megawatts From the World’s First Operational Nuclear Fusion Plant, Redefining Clean Power
Illustration of non-toxic organic solar cells achieving 20% efficiency. Image generated by AI.
“These Panels Stun the World”: China’s Non-Toxic Organic Solar Cells Smash Records With Astonishing 20% Efficiency and Eco-Friendly Performance
Facebook X (Twitter) LinkedIn YouTube TikTok
Energy Reporters
Facebook X (Twitter) RSS
Subscribe
  • Featured
  • News
    Illustration of the groundbreaking Penn State research challenging Kirchhoff's Law in energy efficiency. Image generated by AI.

    “These Scientists Just Broke the Unbreakable”: US Researchers Smash a 165-Year-Old Physics Law, Unlocking Astonishing New Pathways for Energy Breakthroughs

    July 7, 2025 at 6:53 AM
    Illustration of the DOME test bed at Idaho's National Reactor Innovation Center for microreactor experiments. Image generated by AI.

    “This Is Trump’s Nuclear Legacy Unleashed”: DOME Facility Secures Approval, Paving the Way for Bold Microreactor Testing and Accelerated US Innovation

    July 7, 2025 at 5:54 AM
    Illustration of a groundbreaking fuel cell developed by West Virginia University that generates power, stores energy, and produces hydrogen. Image generated by AI.

    “This Changes Everything Overnight”: New US Fuel Cell Simultaneously Generates Power, Stores Massive Energy, and Delivers Clean Hydrogen Without Compromise

    July 6, 2025 at 4:46 PM
    Illustration of the TerraPower Natrium advanced reactor project in Kemmerer, Wyoming. Image generated by AI.

    “America Moves at Lightning Speed”: Federal Authorities Greenlight Fast-Track Permit for Groundbreaking 345 MW Nuclear Reactor Construction in Record Time

    July 5, 2025 at 8:59 AM

    Winter Storm Paralyzes the South, Disrupts Travel and Power

    January 11, 2025 at 11:41 AM
  • Use

    Trump’s Energy Policy: A Complicated Road Ahead

    December 24, 2024 at 3:28 PM

    World’s First Grid-Scale Nuclear Fusion Plant to Be Built in Virginia

    December 23, 2024 at 2:57 PM

    How West Africa can expand power supply and meet climate goals

    June 15, 2020 at 6:33 AM

    Saudi Aramco shares tumble amid price war 

    March 10, 2020 at 1:18 AM

    Generator supplier eyes renewables move

    March 5, 2020 at 5:36 AM
  • Climate
    Illustration of a groundbreaking development in solar technology with stabilized perovskite cells. Image generated by AI.

    “These Scientists Just Solved Solar’s Biggest Problem”: China Unveils Breakthrough Material That Eliminates the Main Flaw in Perovskite Solar Technology

    July 8, 2025 at 9:03 AM
    Illustration of Google's partnership with Commonwealth Fusion Systems for nuclear fusion energy. Image generated by AI.

    “These Are Google’s Boldest Moves Yet”: Tech Giant Secures 200 Megawatts From the World’s First Operational Nuclear Fusion Plant, Redefining Clean Power

    July 8, 2025 at 8:12 AM
    Illustration of non-toxic organic solar cells achieving 20% efficiency. Image generated by AI.

    “These Panels Stun the World”: China’s Non-Toxic Organic Solar Cells Smash Records With Astonishing 20% Efficiency and Eco-Friendly Performance

    July 8, 2025 at 7:08 AM
    Illustration of a water-only method for extracting rare earth elements. Image generated by AI.

    “These Scientists Defied All Expectations”: Breakthrough Water-Only Process Purifies Rare Earth Elements, Slashing Toxic Waste and Redefining Global Supply Chains

    July 8, 2025 at 5:57 AM
    Illustration of the world's largest impulse turbine at the Datang Zala Hydropower Station. Image generated by AI.

    “These Giants Will Rewrite History”: China Reveals World’s Largest Hydropower Turbine Unleashing Unmatched 500-Megawatt Output in Global Energy Milestone

    July 6, 2025 at 5:48 PM
  • Industry
    Illustration of Westinghouse's role in the assembly of the ITER fusion reactor core. Image generated by AI.

    “These Engineers Hold the Future in Their Hands”: Westinghouse Begins Assembling the Heart of the World’s Largest and Most Powerful Fusion Reactor

    July 7, 2025 at 8:57 AM
    Illustration of the world's first integrated hydrogen production simulator within a Small Modular Reactor control room. Image generated by AI.

    “This Reactor Is a Game-Changer for America”: US Launches World’s First Nuclear Plant Producing Hydrogen, Triggering a New Era in Clean Energy

    July 7, 2025 at 7:49 AM

    Oil Prices Spike Following US Strikes on Iranian Nuclear Sites

    June 22, 2025 at 4:50 AM

    Aflac Cyberattack: Insurance Giant Breached in Industry-Wide Hacking Spree

    June 20, 2025 at 6:10 PM

    Tariffs Leave Small Businesses Struggling Amid Policy Chaos

    June 1, 2025 at 4:27 PM
  • Opinion

    Pulling back the curtain on Turkey’s natural gas strategy

    September 1, 2020 at 5:59 AM

    How West Africa can expand power supply and meet climate goals

    June 15, 2020 at 6:33 AM

    Review: Oil and the Great Powers: Britain and Germany, 1914 to 1945

    June 9, 2020 at 5:40 AM

    Eastern Mediterranean gas: testing the field

    May 27, 2020 at 5:18 AM

    Energy geopolitics will hinge on the nationalism-globalism swinging door

    May 5, 2020 at 1:37 AM
  • Policy

    Trump’s Global Influence Wanes Amid Rising Foreign Policy Setbacks

    May 31, 2025 at 5:48 PM

    Glaciers in Crisis: Nearly 40% of Global Ice Mass is Already Lost

    May 24, 2025 at 4:52 PM

    iPhone Prices May Triple if Made in the U.S., Analyst Warns

    May 23, 2025 at 5:30 PM

    Labubu Craze: The Cute, Creepy Plush Toy Taking Over the World

    May 17, 2025 at 8:40 AM

    RFK Jr’s Vaccine Views Clash with Measles Outbreak Reality

    April 12, 2025 at 10:49 AM
  • Output

    Billionaire Backlash Grows Against Trump’s Aggressive Tariff Plans

    May 10, 2025 at 5:50 PM

    McDonald’s Sees Worst Sales Since 2020 Amid Uncertainty

    May 1, 2025 at 8:23 AM

    Europe’s Economic Rebound Stalls as U.S. Tariffs Cast a Shadow

    April 30, 2025 at 5:34 PM

    US and South Korea Strengthen Naval Ties with New Shipbuilding Agreement

    April 9, 2025 at 5:38 PM

    Trump Administration Plans Cuts to Key Manufacturing Grants

    April 8, 2025 at 7:38 AM
  • Storage
    Illustration of an innovative aqueous organic redox flow battery design highlighting zwitterion-modified NDI derivatives. Image generated by AI.

    “This Battery Breaks Every Rule”: Scientists Unveil Groundbreaking Water Battery That Delivers 220 Full Cycles With Zero Capacity Loss or Performance Drop

    July 6, 2025 at 3:52 PM

    European Commission launches hydrogen initiative 

    March 11, 2020 at 3:37 AM

    Wales looks to pioneer hydrogen sector

    March 5, 2020 at 5:51 AM

    Germany to unveil plans for hydrogen future 

    March 3, 2020 at 2:34 AM

    Shell joins Dutch clean hydrogen project

    March 1, 2020 at 8:50 PM
  • Grid

    Australian grid struggles with renewables boom: report

    February 24, 2020 at 5:32 AM

    Scottish eco-tariff exposes UK ‘greenwashing’ con

    February 18, 2020 at 2:31 AM

    Lukashenko attacks Russian merger demands

    February 16, 2020 at 4:53 AM

    Probe launched into UK’s Italian-made power cable

    January 29, 2020 at 8:37 PM

    Italy’s Prysmian under fire over UK interconnector failure 

    January 16, 2020 at 1:16 AM
Energy Reporters

Book review: Energy Kingdoms explains why Gulf states must end free energy

Rosemary PotterRosemary PotterFebruary 8, 2019 at 9:50 AM0
Share Twitter Facebook LinkedIn Telegram WhatsApp Email Copy Link
Follow Us
Google News
Share
Twitter Facebook LinkedIn WhatsApp Email Copy Link

At the office tower where I worked, colleagues propped open lobby doors when they went outside to smoke so that they could feel a steady blast of artificially chilled air.

—Jim Krane, Energy Kingdoms, p. 5

Outdoor air conditioning and cigarettes are an extraordinary combination these days. Only in a political economy as extraordinarily rich as the Arab Gulf states could it be possible with any regularity. In these states, oil rents and monarchical rule have combined to produce, over the last four decades, some of the highest levels of per capita income on the planet.

According to Jim Krane’s Energy Kingdoms: Oil and Political Survival in the Persian Gulf (New York: Columbia University Press, 2019), Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE now face a reckoning. The issue for these six members of the Gulf Cooperation Council is subsidies for electricity, heating, water, and other fuels.

Long thought untouchable, Krane argues that these states must rein in subsidies or face “economic cannibalism” (p. 99). Recent experiences in Dubai, Saudi Arabia, and others illustrate that they can.

Energy Kingdoms is concise and packed with valuable insights and analysis. It is a must read for anyone wanting to understand oil and political economy in the Gulf. Beginners will find Krane’s descriptions of energy terms easy to understand and his use of history deft in contextualizing how and why the Gulf got where they are today. Experts will learn more deeply about regional case studies and reconsider rentier theory, a building block for much of our understanding of Gulf regimes.

No country for old subsidies

The Arab oil producing states in the Gulf won huge increases in revenue after the two oil price shocks of the 1970s. Subsidies seemed a natural way to share these rents, what Krane calls “a financial reward for a ‘gift of nature’” (p. 25), and to bind citizens to their ruling families.

Early on, this was fine. There was plenty to go around. But over time, subsidies became unsustainably wasteful. Air conditioning may be the largest problem, accounting for 70 percent of total power use during peak summer periods (p. 69). Water use is also egregious. Since the region is bereft of natural rivers or lakes, it relies of expensive and energy-intensive gas-fired desalinization plants. Despite this, the average Saudi uses 250 liters per day compared to a global average of 80 liters per day (p. 124).

Cheap or free resources inevitably lead to waste. To illustrate how central price is to demand, Krane compares Kuwait and the U.S. state of Arizona and argues that paying market prices would reduce consumption by at least 33 percent (p. 79-84). These wasted oil and gas resources should instead be exported.

What some outside the region may not know is that these regimes have begun to tackle the problem. Iran made valiant attempts to cut subsidies in 2010 (p. 99-103), while Dubai took steps to upend the principle that subsidies were sacrosanct by instituting a 15 percent increase in electricity tariffs around the same time (p. 108-9).

The most salient experiment has been in Saudi Arabia, where the government has dialed back subsidies since 2016, smartly targeting the more wasteful wealthy and cushioning the poor with cash benefits. These efforts faced pushback, but have already lowered consumption (p. 125-35). In the smaller kingdoms, expatriates bear the brunt of the increases, while citizens mostly continue to ride for free. Since Saudi Arabia is more populous and does not have similar ratios of expatriates, its reforms were both more necessary and noteworthy.

Revising rentier theory

Most observers have long thought it impossible to cut subsidies in the Gulf because it would lead to greater demands for democracy. Yet the tentative success of reforms illustrate that the academic assumptions of rentier theory needs to be reconsidered.

First, the economic waste of subsidies is clearly unsustainable, and attacking the demand side is the only solution. Producing more oil and gas to sustain subsidies is not only poor economic strategy, but now finds no willing investors for new projects.

Krane also cites two interesting reasons for why reform is taking hold now. First, the political chaos unleashed by the Arab Spring caused Arab Gulf citizens to rally around their rulers. He describes how an ISIS attack against a mosque in Kuwaiti in 2015 helped create a security crisis whereby citizens “rallied around their ruling sheikhs as bulwarks against the depredations of ISIS” (p. 139). In this context, subsidy reform was more palatable to the populace. Second, climate change is an existential threat to these states, maybe not in the short term, but gradual reform now could forestall a dramatic reckoning with rentier governance later (p. 165-70).

I was somewhat surprised that Krane did not discuss the role of U.S. shale in this story, aside from mentioning it as a factor that is straining U.S.-Saudi relations (p. 163-4). Doesn’t the economic threat of shale and its shorter investment cycles affect the urgency of subsidy reform? Perhaps not, but I wondered.

Gas matters

Most books about the Gulf focus almost exclusively on oil. Oil is at the root of the Gulf countries’ dilemmas – it is true rent-generator as its resale value far exceeds natural gas on average. I figured Krane’s would be the same considering the title, but this is far from the case.

I particularly enjoyed learning about how important natural gas is in this equation. Krane explains how a major frustration of these states with the international oil companies (IOCs) running their oil industries was they simply flared, or burned off, gas that seeped out of oil fields. The IOCs did not capture and export this so-called associated gas because they were no markets reachable by pipeline. After finding the largest gas field in the world, North Field, off the coast of Qatar in 1971, Shell simply capped it (p. 45). The countries themselves rightly saw this as wasteful by the 1970s, when natural gas began to surge in the power sector in Western Europe and elsewhere. Despite attempts to harness gas, the Gulf region is still a net importer of the fuel today.

Listen to the past

Energy Kingdoms does a masterful job of using history to inform contemporary analysis. The first four chapters are largely historical but anticipate the major themes of the book. The last five chapters are largely contemporary and policy-oriented but interweave history in an informative way. Most policy books have a perfunctory “historical background” section that adds little to the analysis; Krane’s use of history is deft and helpful.

I can, however, nitpick an historical interpretation here and there. For instance, Britain began converting its navy to oil in 1898-1903, although Churchill’s moves in 1911 usually get credit (p. 29).

I also think Krane misses an opportunity to reinforce the importance of spare production capacity in discussing the 1973-4 embargo. This is surprising since he underscores early on that spare production capacity is the key to the Gulf’s importance (p. 15). He rightly argues that nationalization drove Middle East producers to wrestle control of oil from the IOCs (p. 40-42). But he doesn’t connect their ability to do so with the loss of global spare production capacity by the early 1970s. Saying that “oil had become too vital to be cheap” (p. 42) is not the full picture. Oil had also become too scarce to be cheap. The 1956-7 Suez Crisis and less known 1967 Arab oil embargo failed to raise prices or cause shortages because of spare production capacity in the Western Hemisphere.

These are minor, somewhat forced, critiques. Energy Kingdoms is an outstanding work for those wanting to better understand the Gulf Arab oil-producing states. Businessmen going to the region could even finish it on the flight, as it is a quick-hitting 170 pages. More importantly, the reader will understand why ending free energy is politically possible and economically inevitable.

Did you like it? 4.5/5 (26)

Subscribe to Our Newsletter

News, investigations, and analysis — our top stories every morning to start your day right.

book review Energy Kingdoms GCC Gulf states oil rentier theory Saudi Arabia
Follow on Google News Follow on X (Twitter)
Share. Facebook Twitter LinkedIn Telegram WhatsApp Email Copy Link
Previous ArticlePoland prepares to end Russian gas dependence
Next Article France agrees Nord Stream compromise
Rosemary Potter
  • X (Twitter)

Rosemary Potter is a Berlin-based journalist for Energy Reporters, covering European energy markets, cross-border policy, industry innovation, and the challenges of energy transition. A graduate of Northwestern’s Medill School of Journalism, she combines investigative depth with a continental outlook. Her reporting amplifies the perspectives shaping Europe’s energy future across sectors, borders, and technologies. Contact: [email protected]

Keep Reading

Trump’s Global Influence Wanes Amid Rising Foreign Policy Setbacks

Glaciers in Crisis: Nearly 40% of Global Ice Mass is Already Lost

iPhone Prices May Triple if Made in the U.S., Analyst Warns

Add A Comment
Leave A Reply Cancel Reply

Subscribe to Our Newsletter

News, investigations, and analysis — our top stories every morning to start your day right.

Trending
Illustration of a groundbreaking development in solar technology with stabilized perovskite cells. Image generated by AI.
“These Scientists Just Solved Solar’s Biggest Problem”: China Unveils Breakthrough Material That Eliminates the Main Flaw in Perovskite Solar Technology
Illustration of Google's partnership with Commonwealth Fusion Systems for nuclear fusion energy. Image generated by AI.
“These Are Google’s Boldest Moves Yet”: Tech Giant Secures 200 Megawatts From the World’s First Operational Nuclear Fusion Plant, Redefining Clean Power
Illustration of non-toxic organic solar cells achieving 20% efficiency. Image generated by AI.
“These Panels Stun the World”: China’s Non-Toxic Organic Solar Cells Smash Records With Astonishing 20% Efficiency and Eco-Friendly Performance
News by category
  • Featured
  • News
  • Use
  • Climate
  • Industry
  • Opinion
  • Policy
  • Output
  • Storage
  • Grid
Information
  • About Us
  • Advertise
  • Meet the Team
  • Contact Us
  • Legal Notice
  • Privacy Policy

Subscribe to Our Newsletter

News, investigations, and analysis — our top stories every morning to start your day right.

Facebook X (Twitter) RSS
© Energy-Reporters.com. All rights reserved.

Type above and press Enter to search. Press Esc to cancel.