December 02, 2009

Bucking Conventional Wisdom: The Top Five Energy-Poor Middle Eastern Countries

The Middle East is rightly seen as a center of global energy supplies and production, hosting several of the world’s top petroleum and natural gas giants. But, as it turns out, oil and gas—so vital to the world’s transportation and electricity—are not evenly spread around the region, and some nations are truly energy poor. With this in mind, I present the top 5 most energy-poor Middle Eastern nations. It’s important to keep in mind that lists like this are a snapshot in time, and the facts and figures themselves are fluid and dynamic. Lebanon may strike a huge oil field in next three months (not terribly likely), or Yemen’s oil may run out in 2017 (very likely, as pointed out by my CNAS colleagues [pdf]).  While I consider these the top five, they are not ranked in any particular order.

Jordan is a net energy importer, and produces only very little oil and natural gas. It imports oil chiefly from Iraq, though Iraqi imports were halted for obvious reasons between 2003 and 2008, when imports came mostly from Saudi Arabia. Additionally, much of Jordan’s natural gas is imported from Egypt. Currently, Jordan has generally good relations with both nations, so the main energy security concerns revolve around Iraqi oil infrastructure and legal issues. Recently, BP bought gas exploration rights to a field in Jordan, but it’s unclear at this time how much gas found by BP will actually be used for Jordan’s ample electricity needs. According to Amman-based news service Maktoob, “The kingdom . . . is struggling to meet electricity demand, which is growing by more than 7 percent per year, due to fast growing population and rising industrial needs.” To boot, the country does itself no favors by having generally low energy efficiency.

We move now to the smallest nation of the bunch. According to the U.S. Energy Information Agency (EIA), Lebanon is the world’s 112th–top producer of petroleum, and hasn’t produced any oil in years. Neither does Lebanon produce any natural gas. A country brief by the International Energy Agency (IEA) notes that although Lebanon has “little hydrocarbon base to speak of . . . it hopes that planned exploration efforts in the Mediterranean offshore area will prove successful.” Part of the exploration zone is being contested with Israel, which could remain a diplomatic irritation for both countries.

The EIA notes that Israel only produced about 100 barrels of oil per day in 2008. Since Israel doesn’t always have the best relationships with most of the largest oil exporters in its neighborhood, it mostly relies on Russia and Central Asian states for its oil. According to The New York Times, Israel is keenly aware of its oil supply vulnerabilities and price volatility, and it is studying wider use of electric cars to offset these issues. According to the EIA, Israel produced 34 billion cubic feet of natural gas in 2006, but that number fell to zero in 2007, and in recent years it has sought to import more natural gas from  Russia’s Gazprom and less from Egypt.

In terms of energy production, Syria is somewhere in the middle of its neighbors. It is more blessed with oil and gas than energy-dry neighbors Jordan and Lebanon, but has nowhere near the resources of nearby Saudi Arabia or Iran. The EIA notes that “Since peaking at 583,000 barrels per day (bbl/d) in 1996, Syria’s crude oil production has been in decline,” with production at about 426,000 barrels a day in 2008. The EIA also points to Syria’s modest natural gas reserves, in the neighborhood of 8.5 trillion cubic feet at the beginning of this year.

In the past, Syria has been a target of Western ire and sanctions, and the United States currently enforces a number of sanctions against the nation. But its improved relations with Europe and the United States are causing Western energy companies to pay attention—and more importantly, pay money—to Syria, according to The Wall Street Journal (and the same source notes that Russia, China, and India have no problems investing in Syrian energy). If Syria continues to moderate its behavior to the liking of Western officials, sanctions may be gradually lifted and U.S. energy investment increased. A more pro-Western stance may also succeed in breaking Syria away from Iran’s influence—a prospect that is debated but possible.

One thing I’m finding when putting these Top Five posts together is that it’s very difficult to limit important lists to just five possibilities. Yemen produces oil (in fact, it’s 32nd in the world), and may seem like a curious choice for this list, but I’m including it to highlight widespread expert agreement on its upcoming energy crisis.
According to the BBC, Yemen derives most of its government revenue from oil sales (accounting for 90% of exports), but production is expected to stop completely around 2017, which could likely leave the shaky, embattled government with an economic disaster on its hands. This vulnerability also does not bode well for Yemen’s electrical grid, which relies exclusively on oil for generation. In addition, information about Yemeni natural gas is difficult to parse. The EIA claims that Yemen produced no natural gas between 1980 and 2007, but Yemen LNG (a firm that liquefies natural gas) is active and currently exports liquefied natural gas to other countries. It’s unclear where Yemen LNG obtains its gas.

The focus of Middle Eastern energy is almost always on its major producers, and indeed it was difficult to find good information on the relatively low-energy countries. And of course I focused solely on fossil fuels for this exercise. Middle Eastern countries could always invest in renewable energy sources (Abu Dhabi is making such a push), but the future of renewable in the Middle East is far from certain.