Jordan’s lack of energy

The main challenge facing the Jordanian economy in the last several years has been energy, but it is also the country’s greatest opportunity as the field is filled with opportunities to attract foreign direct investment.

Meanwhile, other than strategising and counterstrategising, little has been achieved in terms of enhancing the contribution of Jordanian renewable energy to the total energy profile. Offered current solutions seem to be no more than quick non-fixes.

Vulnerability to fluctuations in the oil market and the rise in the bill for oil imports as a consequence of disruptions in the supply of Egyptian gas and later complete stoppage have adversely impacted the welfare and budget of both government and citizen.

The impact is so severe such that the government solution (raise energy and water prices) has backfired: It caused the distressed state of the economy and inflation as well as the strikes that further cripple the economy.

The teachers’ strike, for example, is a manifestation of this failure, as the 115,000 teachers in public schools feel the brunt of inflation, they desire wage increases, a natural consequence.

The phosphate workers’ strikes are also manifestations of policy failure. Other strikes by public sector employees may follow.

A team of government assigned pundits (including this writer) worked on evaluating a $5 billion investment in shale oil in the Kingdom in 1999. The investment opportunity and the project to produce oil proved feasible, according to the analysis. Not only that, by 2013, Jordan would have been an exporter of oil. 

Why was the opportunity squandered and the investment never materialised (we are now negotiating smaller deals with other companies)? 

Because some official advised at the time that it is best not to sacrifice the subsidised oil already being received from Iraq. The advice was accepted against the analysis by a team of economists, engineers and specialists. The future was sacrificed to keep the country dependent upon one source of energy supply even though the writing was on the wall regarding the stability of the Iraqi regime at the time.

Someone decided then to maintain Jordan’s dependency on one country for energy, and not develop our own reserves, which now prove to be plentiful and would have made us as rich as some of the Gulf states.

The same logic was followed when the government started depending on Egypt for the majority of its energy needs to generate electricity. Once the supply started to falter (and it did from day one) and later came to a halt, the country was shocked (it had been shocked 16 times before that).

Moving from bad to worse, a recently offered solution (the Gaza gas deal) makes Jordan dependent yet again on another country (this one is occupied, has no secure borders and Israel is relentlessly bombarding it) for its energy needs as some propose dependence on gas from Gaza — which is fighting for survival.

Even if Gaza were liberated from occupation, would it make sense to leave the country entirely dependent on another (Egypt, Syria, Iraq, Saudi Arabia or even Israel, for that matter) for its energy needs?

One would think not. 

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