Bahrain launches the post-oil boom

With Iraq in chaos, Syria in a civil war, Lebanon fragmenting, and Egypt imploding, America’s friends worry about stability in the Middle East and a perceived American retrenchment from international affairs.  During a recent visit to Bahrain this growing anxiety over a possible American geopolitical disengagement and the reality of Iran filling this vacuum was palpable. 

Nonetheless, this long-time American ally and its U.S.-educated monarch remain loyal to their partnership with Washington. King Hamad Al-Khalifa is a keen observer of geopolitical trends in the region and understands the cycles of American foreign policy that swing from isolation to engagement. The King is aware that while American presidents come and go, the central role America plays – and has since World War II – on the global stage is indisputable.

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Not surprisingly, the history of relations between the United States and Bahrain go back to 1947 when Bahrain granted a base for U.S. naval activity.  In many respects this small island nation of one million has served as America’s military and geopolitical anchor in the energy-rich Persian Gulf. Today, Bahrain is home to the U.S. Fifth Fleet, guarding the vital waterways of the Persian Gulf through which over 35 percent of the world’s oil flows.  

Beyond these close military ties, another anchor of U.S.-Bahrain relations is energy. In 1932 U.S. major Chevron discovered oil in Bahrain thus laying the foundation of a long-term partnership based of developing and exporting Bahrain’s oil resources. Today Chevron continues to play a vital role in Bahrain’s energy equation despite the fact that Bahrain has limited reserves of oil and gas.

While King Hamad recognizes the reality of a possible American retrenchment from the region and the importance oil plays in his country’s economic life, he also realizes another reality: the need to move into the post-oil age of sustainable economic development through solar energy. King Hamad’s vision is to open up another front in U.S.-Bahrain relations that marries American innovations in solar technology with Bahrain’s domestic energy requirements. His goal is simple: the energy independence of his country.

This far-sighted vision of King Hamad is based on the irony of Bahrain’s geography: very limited reserves of oil and gas despite being situated at the epicenter of the energy-rich Persian Gulf. When King Hamad looks to his neighbors for energy assistance his only support has come from Saudi Arabia that shares its Abu Safa oil fiend with Bahrain. Importing gas from Iran (that holds the world’s largest reserves of natural gas) to meet its annual electricity consumption of 3000 MWs is a non-starter for King Hamad due to Tehran’s foreign policy goal of undermining the monarchy and forcing America’s Fifth Fleet out of Bahrain. This reliable friend of America will not tie the future of his country – and that of the region – to the ayatollahs in Iran.

The decision by King Hamad to lay the foundation of a post-oil boom in Bahrain by partnering with America and its innovative companies and universities was decided three years ago. At that time the King asked his economic team to deploy a pilot project based on the concept of smart grid solar to generate 5 MWs. It is important to note that since Bahrain is a small country – about three times the size of Washington, DC – generating electricity by harnessing the power of solar energy through traditional solar farms is not feasible. The island is too small to use precious space for massive solar farms the likes of which we see in California or the United Arab Emirates.    

This geographic limitation of Bahrain has, ironically, opened the door to American innovation in order to deploy cutting edge technologies in the area of smart grid solar and smart electric poles to generate electricity.  Bahrain has always been a hub for innovation in the region: whether in banking, tourism or political reform. Today it is reaching out its hand of friendship to the U.S. to create a new hub - a solar hub to last many years.

According to the Commerce Department, $1 billion in American exports creates 7000 jobs and another 3000 indirectly. Exporting American innovation is another means to grow the U.S. economy, help an American ally and protect a region of vital importance to American national security.  In the case of Bahrain, King Hamad’s vision of sustainable economic development by deploying smart grid solar technologies poses a historic opportunity for America’s innovators: whether those who are working in start-ups or those researches at places like Caltech, Case Western and Princeton. The dollar value of King Hamad’s new partnership with America is approximately $9 billion. In other words, covering all of Bahrain’s electricity needs with solar technology developed and deployed by the U,S. equals $9 billion. For the Middle East as a whole this figure is $500 billion over the next five years.

While King Hamad’s enemies are engaged in a jihad to murder and create havoc, he is engaged in a jehad to innovate and lift his country out of its dependence on fossil fuels. Washington can assist this loyal ally by supporting his vision. An invitation to Washington to meet President Obama and members of the U.S. Congress would be a good start.

Sobhani, Ph.D, is CEO of Caspian Group Holdings. Neither the Caspian Group nor Sobhani represent Bahrain or any of Bahrain's entities in the U.S.