Energy demand has jumped 500 per cent in the last 30 years in
Mena that requires new policy direction
Dubai: The Middle East and North Africa (Mena) region needs a good energy
policy that will both address the energy demand and supply issue, at the same
time ensure that it is sustainable and protects the environment, energy
officials and analysts, said.
Global demand for energy remains strong. Currently, the world consumes around
250 million barrels of oil equivalent per day - but almost half of this
consumption is in the developed world. If the rest of the world were to move
towards EU level of per capita energy consumption, global primary energy demand
would more than double.
“To create a sustainable energy grid, the MENA countries need clear and good
energy policies that will help the region offer sustainable energy with a good
energy mix to power their economies,” Majid H. Jafar, Chief Executive Officer of
Crescent Petroleum, said on Wednesday at a breakout session at the World Energy
Forum.
Continued economic development and population growth are the key drivers of
rising global energy consumption – especially in the developing world. A fifth
of the world’s population remains without electricity. As we bring the so-called
Bottom of the Pyramid into the modern global energy system, it will be critical,
Jafar argues, in tackling poverty and promoting global stability.
Leonid Bokhanovskiy, Secretary General of Gas Exporting Countries’ Forum,
said, “As much as $37.9 trillion will be needed between 2011 and 2035 in the
global oil and gas sector to meet the projected demand, 25 per cent of which
will be in gas development.”
Chris Faulkner, CEO of Breitling Oil and Gas, focused on the development of
Shale Gas in the US, that is helping the US in meeting its energy needs while
bringing down the prices of gas to $2 per mmbtu or $10 per barrel of oil
equivalent.
“Shale gas is a game changer in the energy equation and will fulfil the
energy needs of the future while meet the environmental concerns of the people –
as it is clean, green and safe,” he said.
Energy demand in the Middle East jumped 500 per cent in the last 30 years,
driven by economic growth. However, the Gulf region holds world’s 60 per cent of
proven oil reserves and 40 per cent of gas reserves.
According to Arab Petroleum Investment Corporation, the Middle East will
require $600 billion investment in oil and gas sector in the next few years.
Saudi Arabia, UAE and Qatar are investing the bulk of this.
“The energy hungry region is currently consuming a large chunk of its own oil
and gas production. There are indications that Saudi Arabia might absorb all its
oil production within a decade to meet its own energy needs,” Jafar
said.
“So, the region needs to develop the sustainable policies and tools to help
not only their economies, but continue playing their role in meeting global
energy demand.”
But he cautions against expecting overnight switch: transitions in global
energy system take time. Coal took a century to replace biomass as the world’s
primary fuel, and oil took 70 years to replace coal – all despite low costs and
huge efficiency gains associated with these transitions, advantages that do not
apply to renewables today.
Today it is the oil industry that needs to meet the challenges, he says. The
world now needs to recreate the productive capacity of Saudi Arabia every two
years. For the oil industry, this is largely insurmountable. But gas is starkly
different: global gas resources could supply the world’s current needs for
250-plus years.
Moreover, he says, gas is affordable and relatively environmentally clean.
The region most focussed on greenhouse gas emissions reductions in the world,
the EU, is failing to meet its carbon targets as it increasingly chooses to burn
coal over gas. Ironically, the region least interested in emissions reductions,
the USA, has reduced its emissions to 20+ years lows and made the most material
carbon emission reductions of any country in the world by switching from coal to
gas in power generation. This is thanks in large part to cheap gas supplied from
the shale gas revolution.
The Middle East, despite being at the very centre of global oil and gas
production, remains highly inefficient in energy use – and inefficiency largely
the result of an energy subsidy and price regulation regime which does not
provide the price signals to ensure energy consumption is efficient and energy
production is sufficient.
Finally, it is the private sector that can really help the MENA region, Jafar
says. “Inter-country gas infrastructure and trade within the Gulf region is
still limited but would bring huge benefits by ensuring that gas could be
delivered to where it is needed most. The private sector is best placed to take
the risks and make the investments necessary to deliver a regional gas grid,” he
said.
Source :
http://gulfnews.com/business/economy/mideast-to-need-600b-investment-in-oil-and-gas-1.1093518
http://gulfnews.com/business/economy/mideast-to-need-600b-investment-in-oil-and-gas-1.1093518
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