ARE governments of the Levant fooling their people with false promises of an offshore gas bonanza? From the proceeds, Lebanon hopes to fund a bullet train that will end Beirut’s traffic snarl-ups. Across the water, the Cypriot government has equally grandiose plans. By 2020 a vast new complex in Vasilikos, on Cyprus’s southern coast, is supposed to start shipping liquefied natural gas (LNG) to Europe and even Asia, salvaging the country’s finances. Gas reserves, say Cypriot optimists, amount to 96 trillion cubic feet.
Yet most oil analysts say this is all wildly over the top. Even Israel, whose development of offshore gas is most advanced, is unlikely, they reckon, to start exporting large amounts by 2020, as it hopes.
The sceptics say that the main brake is a lack of regional co-operation rather than a shortage of oil and gas. The Americans’ official Geological Survey estimates that from Gaza’s coast to southern Turkey the eastern Mediterranean holds 122 trillion cubic feet of gas, comparable to the reserves of Iraq. But Lebanon’s caretaker government lacks the authority to pass the legislation needed to persuade foreign oil companies to start drilling; a heralded auction is again likely to be delayed. America’s effort to mediate over a disputed maritime boundary between Lebanon and Israel is stalling progress. The civil war in Syria is scaring away big oil companies. And drilling off the Lebanese coast has yet to begin. (…)
Read the rest of the piece here.
Recent events and wariness of foreign investors dent the oil-and-gas economy
TIGHT military control and generous spending on social services, thanks to the high price of oil and gas that Algeria has in abundance, have so far prevented President Abdelaziz Bouteflika and his regime from being shaken by the upheavals in other Arab countries. In 2011 oil exports earned Algeria $55 billion. Foreign-currency reserves are strong. GDP is expected to rise by more than 3% this year, says the IMF. The official unemployment rate of around 10% is lower than elsewhere in the region.
But all is not well. Of the world’s big oil-producing regions only the North Sea’s output has dipped more steeply in the past five years. And many of Algeria’s usual markets are shrinking. North America, where refineries once paid a premium for Algeria’s high-quality crude, takes the largest dollop of the country’s 1.2m barrels a day. Now they are tapping cheaper supplies from North Dakota. Moreover, Algeria has become too reliant on high prices. To break even, its budget banks on oil at around $120 a barrel, above typical forecasts for this year; today’s price is around $116 for Brent. (…)
Read the rest of the piece here.
NB, I was not in Algiers, despite the dateline above. This was an editing error.
Yesterday’s piece in the NYT on coal pointed out some ironies — for example, that many of the countries and jurisdictions that have taken decisions to restrict coal use or put penalties on carbon emissions are now stepping up exports of the black stuff themselves:
The United States now ships coal to China via Canada, but coal companies are scouting for new loading ports in Washington State. New mines are being planned for the Rockies and the Pacific Northwest. Indeed, some of the world’s more environmentally progressive regions are nascent epicenters of the new coal export trade, creating political tensions between business and environmental goals. … As a result, not only are the pollutants that developed countries have tried to reduce finding their way into the atmosphere anyway, but ships chugging halfway around the globe are spewing still more.
But it ignored the elephant in the room: natural gas. Continue reading
I’m busy. In addition to editing the ever-expanding Petroleum Economist and its excellent new channel on unconventional energy (called, imaginatively enough, PE Unconventional), I’ve four major writing projects on the go.
- A long piece for The Economist on the tar sands (or oil sands, if you prefer)
- An in-depth look, for Petroleum Economist, at Iraq’s ambitions as an oil producer
- Another take on the global gas glut, also for Petroleum Economist
- And my book on oil addiction and the decline of the West
The last of these is a weekend and weekday 5am-7am project. The early starts are the only hours I can find when my children aren’t commanding space, time, and energy. (**I’m not complaining. Frankly, they’re more interesting.**)
The usual requests: if anyone wishes to contact me about stories, you know where to find me.