Jordan Seeks Path Out of its Energy Crisis
Natural Gas Europe is pleased to present Part II, of its interview with Dr. Khaled Toukan is Chairman of The Jordan Atomic Energy Commission and past Minister of Energy and Mineral Resources (2011),
How are austerity measures affecting the economy and the people in Jordan?
Jordan witnessed a series of protests. They began in January 2011 and resulted in the firing of the cabinet ministers of the Government.The protesters' demands escalated following the Government’s announcement of hiking in the price of fuel on 13 November 2012. Jordan is preparing another hike in electricity prices in June in line with a fuel subsidy costs imposed as a condition for a $2 billion IMF loan. The country is in a very unstable situation and given the turbulence in the region, we are worried about the situation in Jordan. The energy crisis is hitting the average consumer. Many households are using blankets rather than heating. Energy and water are vitals for the stability of the society and for sustainability of continuous economic development.. However, the various energy projects initiated by the Jordanian Government will benefit Jordan on various levels: the balance of payments will improve, we will see a reduction in electricity prices and Jordan will achieve energy security.
Jordan is currently developing various projects in its quest to achieve energy security: oil shale, nuclear, wind and solar, the Iraq-Jordan pipeline. However, they are all medium/long term plans What can be done in the short term? Is Jordan considering exporting gas from Israel?
I am not aware of any decision involving gas imports from Israel. I personally think that such decision entails a big political risk. The average Jordanian will not accept such a solution. The peace process between Israel and Palestine has been in a stalemate creating a lot of political discontent between the Kingdom and the Israeli Government. Israel is continuing its expansion policy and I personally am against putting our energy security in the hands of a foreign country - especially not Israel. In the short term, energy efficiency is key. The creation of national resources supply will take a while, so in the meantime the Jordanian Government is tackling the domestic demand by introducing energy-saving light bulbs in public buildings for example. The Government plans to raise electricity tariffs this summer. Another short term solution would be to build an LNG terminal to import gas from Qatar. We expect it to be operational by 2014 allowing the Government to reduce its energy bill.
How do you think Jordan can benefit from the development of hydrocarbon resources in the other eastern mediterranean countries?
If Lebanon, Cyprus, or later on Syria are successful in developing their offshore hydrocarbons, importing their natural gas to Jordan could be an effective short term solution to the energy crisis in the Kingdom. Exporting gas to Jordan would be a simple endeavour given the existence of the Arab Gas Pipeline that was previously used to export Egyptian natural gas to Jordan, Syria and Lebanon. Therefore, the infrastructure is already in place and importing gas from our Eastern Mediterranean neighbours will only be contingent to the political stability. As an energy expert, I would be open to the idea of importing energy from Lebanon, Syria, Cyprus, Iraq but reluctant to import it from Israel.
How likely is the fruition of the Iraqi-Jordanian pipeline?
Amman and Baghdad have signed an agreement to construct a 1,680 km pipeline that will run from Iraq’s southern oil-producing region, Basra, to Anbar province and then to Jordan’s port city of Aqaba. The USD 18 billion costing pipeline will supply Jordan with 850,000 barrels of oil as well as 3.53 billion cubic feet of gas a day and is expected to be fully operational by 2017. The Iraqi-Jordanian pipeline is a project of extreme importance. Iraqis want to diversify their export routes from Iraq and Jordan is in a serious need for energy. It is therefore a win-win situation for both parties. Iraq will diversify its export routes and Jordan will receive oil in exchange of passage fees. However, such a project is tied to a lot of politics and needs stability to progress. The present government in Iraq supports the construction of the pipeline but the development of the project will depend on regional stability.
Is jordan doing all it can to solve its energy crisis?
Yes. Jordan was trapped in very unfortunate situations. It was the victim of major energy shocks: one in 1990 when Iraq occupied kuwait causing Jordan to lose a lot of the oil coming from the Gulf. The second shock was the US invasion of Iraq in 2003. The third shock is more recent: Jordan suffered from the disruption of Egyptian gas after Mubarak was forced from office in 2011. Jordan was hit hard by these severe and serious events. Nevertheless, Jordan was able to maintain its resilience despite its lack of natural resources. The Kingdom started to work on different medium and long term energy projects (oil shale, nuclear, wind and solar, the Iraqi-Jordanian pipeline, the LNG plant) and I am confident it will succeed in completing them. Jordan will have to go through more difficult times until 2017 when we will start receiving some of the fruits. As a matter of priority, Jordan should accelerate its pace in the construction of the LNG terminal in Aqaba so it can import LNG from Qatar and international markets. Importing LNG will allow Jordan to cut on its losses while it develops its own resources. I am very optimistic about the path Jordan is taking given it is working on various projects simultaneously and is serious about each one of them. Jordan will move away from a long history of energy dependence and finally become energy self-sufficient. I truly believe the Kingdom can even become an energy exporter by 2025-2030. The situation of Jordan is no doubt difficult today but we have survived difficult times and we have sailed through hurricanes so we can certainly make it today. We need resilience, long term strategic planning and most importantly, continuity in planning. Only systematic and sustained efforts will lead us to a threshold that would allow Jordan to take off. Continuity means that the projects should be transgovernmental for them to be sustainable.
Part I of the interview: Jordan’s Efforts Towards Energy Security
Karen Ayat is an analyst focused on energy geopolitics in the Eastern Mediterranean.
Follow Karen on Twitter: @karenayat
Dr. Khaled Toukan is Chairman of The Jordan Atomic Energy Commission, Chairman of Higher Ministerial Nuclear Steering Committee and served previously as the Minister of Energy and Mineral Resources (2011),
Dr. Toukan was the President of Al-Balqa Applied University (1997-2001), Jordan; he also held the position of Dean of Faculty of Engineering & Technology and Professor of Industrial Engineering at the University of Jordan; Research Scientist at Kernforschungszentrum Karlsruhe, Germany; and Associate Research Scientist at the University of Petroleum and Minerals, Saudi Arabia. He is a Member of the International High Level EFA Group, a member of H.M. King Abdullah II Economic Consultative Council and presently is Director of SESAME and serves also as Chairman of the Board of Trustees of University of Jordan.