As tiny UAE's water tab grows, resources run dry

Erika Solomon Reuters 21 Jun 10;

(Reuters) - Driving along brand new highways with medians of lush trees and manicured grass, one could easily forget the United Arab Emirates sits on a sweltering desert coast with rapidly diminishing freshwater resources.

The Gulf Arab nation's oil income has allowed it to subsidize extravagant water use for Emiratis, either those in gated communities sporting pristine pools and evergreen golf courses or for farmers clinging to ancient irrigation practices.

Environmentalists warn the country, already reliant on costly desalination plants powered by its lucrative fossil fuels, must cut consumption by its 8.2 million people or risk depleting groundwater resources in 50 years.

"We need to convince them that water here isn't a free resource. It's not even a natural resource, it's manmade. It is costly, and it has a big environmental impact," said Mohamed Daoud of the state-run Environment Agency in Abu Dhabi.

But that is not an easy task in a country where billboards encouraging conservation compete for space and attention with promotions for waterparks, an indoor ski slope and a famous dancing fountain.

Abu Dhabi, seat of the seven member UAE federation and the wealthiest of its emirates, consumes 550 liters of water per person per day, Daoud said -- two to three times the world average of 180-200 liters. Analysts say per capita water use in the UAE overall is roughly four times that of Europe.

To ease groundwater use, about 60 percent of consumption in the desert country, the UAE has invested heavily in desalination, producing nine million cubic meters of water daily at $18 million a day.

Desalination dependence is a luxury only oil-rich Gulf countries can afford: It requires huge amounts of fuel and sea water. Dubai is completely reliant, while Abu Dhabi's use more than tripled by 2007, the Emirates Wildlife Society said.

"The UAE was a net gas exporter before 2008, but now it has become a net gas importer," Ayesha Sabavala, of London's Economic Intelligence Unit said, citing increased desalination and electricity production as the main cause.

ENERGY DRAIN

Desalination is powered mostly by gas and, more rarely, oil -- resources that transformed the UAE from a small pearl diving and fishing center into a financial hub in half a century.

Alternatives like nuclear energy will take another 10 years at least, said Sabavala of the Economist Intelligence Unit. Without alternatives, she expected desalination would increase domestic demand for oil and gas, thereby decreasing exports.

Economist Eckert Woertz of the Gulf Research Center stressed the importance finding alternatives to future oil use quickly.

"That is such a high opportunity cost, because it (oil) is exported at 70 to 80 dollars a barrel. Why dump it into local plants for subsidized prices? That's crazy," he said.

More than six desalination projects are now being planned and are expected to add over 4 million cubic meters a day. Yet storage problems mean much desalinated water is never even used.

"Desalination plants continue producing the same amount per hour, 24 hours a day. So what do we do with the excess water right now? We dump it in the Gulf," Daoud said, adding that the state will develop a system to transport surplus to aquifers.

Beyond economic concerns, desalination dependence could also make the UAE more vulnerable in the event of regional strife, such as any U.S-Iranian military escalation or al Qaeda strike.

"A desalination plant is a large factory sitting on the coast, something that you could easily blow up with a bomb or a missile," Hady Amr of the Brookings Institute said. "You could bring the country to its knees."

COSTLY CUSTOMS

Glitzy skyscrapers and luxury villas are not the only culprits of water waste, which is also a problem in agricultural areas including those relying on traditional practices.

Hours from Dubai, the UAE's hot desert sands stretch into the lush Hili oasis, where Mohammed al-Thahri, 22, inspects canals that snake through his father' date palm field and watches workers in nearby fields open chutes to flood their orchards.

Like the 100 other date farmers in Hili, the Thahris' wells are drying up, forcing them to drill new wells to maintain a 1,000-year-old irrigation method of inundating fields by water canals. They do not export or sell their dates, as they consume all of the yield themselves.

"It wastes water," Thahri said, shrugging. "But these palms are from our ancestors, it's our heritage. If we stopped raising them, it would be like abandoning our own children."

Two-thirds of water consumption in the largest emirate of Abu Dhabi -- home to the al-Ain oases that include Hili -- comes from agriculture. Farmers whose wells run dry are given desalinated water at subsidized rates from the government.

These statistics rattle technocrats like Daoud, trying to decrease wasteful consumption among a citizenry accustomed to the government footing up to 60 percent of their utilities bill.

But reducing subsidies to spur individual conservation efforts is not an option for the UAE's ruling families.

"UAE nationals have always been used to having these subsidies," the Economic Intelligence Unit's Sabavala said. "Getting rid of them would be political suicide."

(Editing by Matthew Jones)