Energy Security Issues in the Middle East Figure 1: World Energy-related Carbon Dioxide Emissions, 2007–35
10 15 20 25 30 35 40 45
0 5
2007 2015 OECD 2020 2025 2030 Non-OECD World total
Figure 2: World Marketed Energy Use by Fuel Type, 1990–2035 projections
100 150 200 250
50 0 1990 Liquids 2000 Coal 2007 2015 Natural Gas 2025 Renewables
Figure 3: US Energy Consumption by Energy Source, 2009 Total = 94.578 Quadrillion Btu
Petroleum 37%
Natural Gas 25%
Coal 21%
Nuclear
Electric Power 9%
Renewable Energy 8%
Nuclear 2035 history 2035
and the Mediterranean Sea. From there the region has easy access to the high seas and global markets in Asia, Europe and the US. Unlike other producing regions, shipping ports in the Middle East do not experience major storms or freezing conditions. Finally, most of the world’s spare capacity of oil is concentrated in the Persian Gulf, particularly Saudi Arabia. This spare capacity serves as an insurance policy against any unexpected interruption of supplies due to natural or political reasons. This concentration of spare capacity can be explained by the fact that oil and gas production is dominated by the state-owned national companies. Unlike private international oil companies, which aim mainly at maximising their profits, these state-owned and state-managed national oil companies are driven by both strategic concerns and commercial interests. Saudi Arabia and other Gulf producers maintain spare capacity to ensure short- and long-term stability of global markets
Given these advantages, and despite rising production in Russia, the Caspian basin and Africa, the bulk of the increase in world oil output is projected to come from the Persian Gulf. According to the International Energy Agency (IEA), the oil and gas resources of the Persian Gulf will continue to be critical in meeting the world’s growing appetite for energy. The region’s massive hydrocarbon resources are sufficient to meet rising global demand for the next quarter-century and beyond.1
The US Department of Energy echoes
these sentiments. The Energy Information Administration (EIA) projects that the bulk of the world’s oil and gas production will come from the Persian Gulf region2
provide the lion’s share of world energy, as Figure 2 demonstrates.
Total = 7.744 Quadrillion Btu Solar 1%
Geothermal 5% Biomass waste 6%
Wind 9%
Biofuels 20% Wood 24%
Hydropower 35%
In short, history and geology put Middle East oil and gas producers in the driving seat. The region has been producing and exporting crude oil and natural gas for decades and is certain to maintain this policy and status in the future. The projected rise of the Middle East’s share in meeting global demand means that major consumers (i.e. China, India, Japan, Europe and the US) are likely to grow more dependent on energy supplies from the Middle East, particularly the Persian Gulf. The smooth continuation of this mutual dependence between Gulf producers and major consumers requires close co-operation in addressing several strategic and commercial challenges. Some of these challenges are domestic, while others are regional and international.
to the rest of the world. Meanwhile, the massive natural gas reserves and the relatively small volume of production mean that the region has the potential to play a leading role as a natural gas supplier, once gas deposits are developed. Secondly, the cost of production in the Middle East is one of the lowest in the world. Unlike Russia, the Caspian basin, the North Sea and the Gulf of Mexico, most oil and gas fields are either onshore or in the shallow waters of the Persian Gulf and the Mediterranean Sea. This accessibility means that much of the oil and gas production in the Middle East is less environmentally challenging and cheaper to produce
Thirdly, the Middle East region has been producing and exporting oil and gas for decades. Generally, the energy infrastructure is well developed. Extensive pipeline networks connect the oil and gas fields to marine export terminals and loading platforms on the Persian Gulf
22
These domestic, regional and international challenges have raised doubts about the reliability of oil and gas supplies from the Middle East. In the last few decades policy-makers, media outlets, and think tanks in Washington, Brussels, Beijing and Tokyo have frequently called for reducing energy dependence on the Middle East. US officials, more than their European and Asian counterparts, have repeatedly talked about ‘energy independence’ and stopping or reducing the nation’s ‘addiction to oil’. Despite these calls, Washington continues to be deeply dependent on oil, as Figure 3 shows.
This article argues that such calls are useful for political rhetoric and gaining votes. As an energy analyst asserts, “Presidents may declare an urgent need to cut imports and boost energy independence – no one ever lost political support by seeing evil and blaming foreigners”.3
In reality, and based on projections by US, European and Asian governments, as well as by major international
EXPLORATION & PRODUCTION – VOLUME 9 ISSUE 2 and that fossil fuels will continue to
Quadrilion Btu
Billion metric tons
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