Gregor Macdonald has a great post about Dubai, and the human tendency to “overshoot” in everything, whether in building, using up energy, or in taking on debt.
He posts this chart of UAE elecricity demand, which is as great as any photograph in explaining the insane growth the region experienced in recent years.
And he makes this ominous comparison to another state, which we’ve already given away:
According to the CIA Factbook, the UAE in 2008 “only” consumed 18% more natural gas than they produced. Now, it’s probably the case that when the data arrives for 2009 on UAE total energy demand we’ll see some form of a crash in electricity consumption. Perhaps in the next few years the great Dubai buildout will largely halt for time and the Emirates will return to developing their natural gas resources. If the economy crashes hard enough, perhaps their NG balance could get back to even.
Finally, I’m thinking of another state that has to import a large amount of energy, has severe water problems on which it has to spend additional energy for conveyance and treatment, and is also in deep fiscal trouble. The State I’m thinking of has also overbuilt for many years, has an opaque government, and is hoping to be bailed out by its overseeing government. The state I’m thinking of now struggles with vast, empty housing stock. And, like UAE, has an enormous “sovereign-wealth fund” (actually a pension fund) that has suffered large losses. Oh, and this state is also filled with lots of overshooters who think there’s no limit to either physical growth, or the growth of debt. Names that state!