A lot has been written in recent days about the diplomatic-security aspect of the United Arab Emirates’ initiative to establish full diplomatic relations with Israel. The UAE, which stretches across 1,300 kilometers (800 miles) of the Persian Gulf coast, has great interest in solidifying its relationship with the United States, establishing a regional alliance against Iran and strengthening its status as a defender of the Palestinians from the militant wing of Israeli governments.
But beyond the geopolitical context of this move, which could be a harbinger of similar initiatives by Bahrain, Oman, Qatar and perhaps Saudi Arabia, hides an even broader economic and historical context: the earlier-than-expected end of the oil era.
The six kingdoms situated along the Gulf’s west coast, which in 1981 established the Gulf Cooperation Council, are responsible for some 30 percent of the world’s oil production. Oil, accounting for around 90 percent of their revenues, provides them with some of the highest GDP-per-capita figures in the world.
The UAE, for example, with a GDP per person of $70,000 a year, is the seventh highest in the world. The country’s gross domestic product has surged 140 times since oil prices began shooting up in the 1970s. The Saudi economy in this period expanded 50-fold. Germany’s economy, by comparison, grew only 14 times.
The influence of oil isn’t limited to economics. It defines the essence of the Gulf states, their foreign relations, way of life, societies and culture. In every Gulf state, a small minority of wealthy citizens exists alongside a mass of foreign workers bereft of rights from Southeast Asia and from poorer countries in the Middle East. When the UAE’s first road was paved in 1966, only a thousand cars were registered in the country.
Today, some 3.5 million vehicles cruise the country’s ultramodern roads, and the number of private planes registered in the UAE is almost the number of cars the country had in 1966. The energy invested each year in Ski Dubai – the indoor ski site in the center of Dubai – is almost equal to the amount of energy consumed annually by 2 million Sudanese.
But the oil era that brought this great prosperity to the Gulf is coming to an end. Half the petroleum the world consumes is used for transportation, a sector that is already undergoing a dramatic revolution. All major carmakers are moving toward hybrid or electric vehicles, and by the end of the decade they will have almost stopped manufacturing gasoline- or diesel-powered cars.
Aviation, which in 2019 consumed some 8 percent of global oil production, will undergo this revolution more slowly, but it too is developing prototypes of long-winged planes with solar panels to charge batteries and spin propellers.
In the electricity sector, the dramatic drop in the cost of solar installations is cutting into demand for natural gas. Even in Israel, which has been slow in introducing renewable energy, we learned in early August that plans to build four gas-fueled power stations had been frozen. Solar-driven power stations are simply cheaper to build and run. Within a decade or two, global demand for oil and natural gas will drop dozens of percentage points, taking prices down with it accordingly.
Alongside the threat of the post-oil era, another risk emerges that, while longer term, could be more destructive: climate change. The Oman mountain ridge in the south blocks the western rim of the Persian Gulf from the cooling effect of the Indian Ocean, creating a major heat and humidity trap. August temperatures in the western Gulf already approach 50 degrees Celsius (122 Fahrenheit), and forecasts predict a rise of 6 or 7 degrees Celsius later this century. The hypermodern cities of Abu Dhabi, Doha, Kuwait City, Manama and others, built to the tune of billions to symbolize the prestige of their countries’ ruling dynasties, could become uninhabitable a few decades on.
Extreme climate forecasts coupled with the fast-approaching end of the oil era create a double bind for the Gulf states. Inaction now could soon land them in the unfortunate position Europe’s salt tycoons found themselves with the invention of refrigeration in the late 19th century. Once meat was chilled and frozen, demand for salt plunged. The product that previously determined the fate of towns and regions lost all value. Its barons fells from grace.
This is the broader context for the Gulf states’ willingness to cooperate with Israel, and through the Palestinians perhaps with other powers in the region. Their rulers know that time is working against them and that a change is no longer a luxury: It is a precondition for survival in a rapidly changing world. Their choice of Israel, with its military might, technological capabilities and innovative thinking, is understandable. Time will tell if this cooperation can deliver them the goods.
Prof. Dan Rabinowitz teaches in the Department of Sociology and Anthropology at Tel Aviv University. His new book, “The Power of Deserts: Climate Change, The Middle East and the Promise of a Post-Oil Era,” is to be published on August 25 by Stanford University Press.