Natural Gas Industry Creates Job Opportunity for MozambiqueBy now, most of the world has put some form of social containment measures into place for COVID-19. Unfortunately, it has had a negative reversal effect on the progress of economic globalization. Mozambique is a place with an abundance of natural resources. However, it is still one of the poorest countries in the world. An opportunity has now presented itself after the DFC (U.S. International Development Finance Corporation) recently approved two substantially large natural gas projects in Mozambique.

Poverty and Social Inequalities

Within the last 20 years, Mozambique has had a growing period in predictive expansion in agriculture and natural resources. The growth has been at a slow pace. Although the poverty numbers are not what they once were, there is a noticeable space between social and financial equality. A recent report from suggests that the abrupt lockdowns from COVID-19 have shined a light on the wide gap between the well-off and the impoverished. Hunger has been another major issue for struggling families due to spikes in inflation and boundary restrictions. There is public blame that is directed toward the government and the failure of equal distribution of wealth.

The Natural Gas Project

In July 2020, a major French oil company, Total, put together a near $15 billion contract agreement to begin the production and distribution of the country’s abundant natural gas resources. The scale of this project is set to be one of the biggest industrial initiatives in the history of Africa. The World Bank and The International Monetary Fund (IMF) have given their assistance both financially and publically. This is needed amid pushback from the use of fossil fuels. An environmental organization called Friends of the Earth International has concluded that ever since the country first discovered natural gas reserves 10 years ago, it has contributed to the public imbalance of wealth and prosperity. From the opposite point of view, the African department of the IMF suggested that the fuel project could be a very unique window of opportunity to bring a fresh start to the economy of Mozambique.

Possible Job Opportunity

The country’s economic statistics would suggest that this project would be a significant milestone for those that are deep in poverty. Proper instruction and leadership from international fuel companies can eventually lead to job opportunities for locals. Currently, job opportunities are few and far between with a high majority having to rely on agriculture for survival. In addition, this is a main key factor that went into the government’s extensive plan. This would work toward converting natural gas into nutrients for crops, bringing higher yields for working farmers. Perhaps most importantly is the fact that this project has the potential to rectify one of the main problems in the country: dependable energy. Bringing in the fuel industry would allow the chance for energy in expanded locations. As a result, it would inevitably bring back Mozambique’s travel and vacation business.

When a country such as Mozambique is going through such disheartening conditions, it is hard to argue against taking the risk to majorly improve their economic situation. When Mozambique takes part in the natural gas business sector, it would lead to more international attention and inclusion.

Brandon Baham

Photo: Flickr

Egypt's Energy Needs
Egypt, a nation once plagued by frequent power blackouts, may have found a remedy to its power needs. The discovery of the Noor natural gas field, the largest offshore field in the Mediterranean Sea, could prove a permanent solution to Egypt’s energy needs and put it on the road to self-sufficiency. This discovery could help Egypt become an exporter of natural gas as well as encourage more foreign investment.

To contextualize what kind of impact this discovery is, one need only compare the Zohr natural gas field, which had been Egypt’s largest natural gas field until 2015, and the Noor natural gas field. The Zohr field is approximately 60 square miles and contains around 30 trillion cubic feet of gas. Noor, on the other hand, is about three times the size of Zohr and could contain as much as 90 trillion cubic feet of gas.

Egypt’s Power Problem

The dual threat of ballooning demand and declining production have put a constant strain on the Egyptian energy sector. In 2014, when Egypt endured one of its most dire energy crises, parts of the country experienced six power cuts per day lasting about two hours at a time. Electricity demand was 20 percent greater than power stations could provide.

In large part, gas shortages were due to an uprising against former President Hosni Mubarak in 2011. Divisive political struggles deterred investors and tourists, which in turn caused foreign currency reserves to decline. In order to meet demand, Egypt was forced to sacrifice important gas exports.

Solution to Egypt’s Energy Needs

Noor is instrumental in reducing the gap between total gas consumption in Egypt (4.9 billion cubic feet per day in 2016) and total daily production in Egypt (4 billion cubic feet). In order to meet its energy needs and compensate for excessive consumption, Egypt has been forced to import liquefied natural gas (LNG) at high costs.

In 2015/2016, Egypt purchased 89 cargoes of liquefied natural gas at a staggering $2.2 billion. With the Zohr field, in addition to the newly discovered Noor field, Egypt could end these purchases by the end of next year, according to Egypt’s oil minister Tarek El-Molla. This will enable Egypt to become independent in their natural gas production and make them a net exporter.

How Does This Help

By satisfying local demand, Egypt can spend significantly less on energy. Using those savings, Egypt can invest in improved infrastructure, healthcare and education. By turning to grid-connected gas, Egypt can avoid the fuel subsidies associated with liquid petroleum gas (LPG) use. Fuel subsidies have accounted for anywhere from 18-20 percent of Egypt’s expenditure, an amount equal to 5-7 percent of GDP.

According to the World Bank’s Country Director for Egypt, Hartwig Schafer, “Conversion to piped natural gas will help give households a safer, more reliable and cheaper supply of gas.” As households make the transition from high-subsidized, imported LPG to locally-produced natural gas, the government will save $201 per household per year. 

The Noor gas field will not only facilitate Egypt’s transition from a net importer of natural gas to a net exporter, but it will provide the much-needed solution to Egypt’s energy needs by allowing Egyptians to have a reliable source of power at a much lower cost.

– McAfee Sheehan
Photo: Flickr

On October 9, Glasgow University set a precedent for the UK, following suite with other parts of the world. The university announced that it will sell any of its shares invested in companies who produce fossil fuels. This translates to the withdrawal of £18 million of investments over the coming years.

David Newall, secretary of the university’s governing body, made a statement, “The university recognises the devastating impact that climate change may have on our planet, and the need for the world to reduce its dependence on fossil fuels.

A heavily involved student campaign of over 1300 students championed for these efforts. The campaign included rallies and even fake oil spills. The campaign is taking other active steps in reducing harm to the environment. For example, their carbon consumption will be significantly reduced.

The universal campaign is gaining support not only from Glasgow, but from 13 American universities who have also pledged to divest any support from fossil fuel companies. Fossil Free’s website provides a comprehensive list of various religious organizations, cities, counties, and universities in the U.S. who have also pledged to divest any investment in the fossil fuel industry.

In fact, Seattle, Washington, home of The Borgen Project, was the first U.S. city to do so. Their commitment took place near the end of 2012. Other universities who have done so include Stanford University and the University of Dayton in Ohio.

According to a Sept. article by The Guardian, even heirs to the Rockefeller oil fortune have chosen to divest. Thus $50 billion will be redirected from fossil fuel investments, sending a tremendous example to the rest of the world.

With less of a reliance on fossil fuels, the world can change its focus to safer, more efficient and more economical energy sources. The more the world learns to rely on solar and wind energy to power our cars and our homes, the more energy can be a resource for more of the global population.

People living in more poverty-stricken areas of the world do not necessarily have the funds for oil, but with the purchase or donation of a solar panel that could last a lifetime, they will finally have electricity opportunities that could in turn lead to a furthered education, a more literate population, healthier people and longer life spans.

So far, despite this activism, little effect has been seen on the trillion dollar franchise of the oil industry, but with increased participants and awareness this is likely to change. It’s promising that a majority of this change is beginning with the voices of our young people. And with people like those members of the Rockefeller foundation on board, these young people now have a means to make their influence known.

Kathleen Lee

Sources: BBC, Fossil Free, The Guardian
Photo: Flickr

The Oil4Food Campaign is a collaborative and innovative mission to mobilize support and make small-scale agriculture one of Ghana’s top priorities for the investment of oil and gas revenues.

It all began in 2013, when Oxfam began working with local Ghanaian organizations to mobilize communities and lobby the government to invest in small-scale agriculture.

Ghana is a nation of small-scale farmers, who represent 60 percent of the country’s economically active population. Many of these farmers are impoverished and many are women, who labor on very small plots of land with little to no say in agricultural policy and decision-making. Small-scale farmers thus do not have access to improved fertilizers and seeds, processing and storage facilities, and proper irrigation.

This lack of investment in small-scale agriculture is a very real problem.

Oxfam noted this, as well as the fact that Ghana’s oil exports are expected to generate an average of $1 billion per year over the next twenty years. Why not channel this revenue into something poverty-reducing and sustainable?

Thus came the Oil4Food Campaign, which called upon the Ghanaian government to increase agricultural spending from 8.5 percent to 14.1 percent of the total GDP, as well as focus this spending on impoverished small-scale farmers.

Word of the Oil4Food Campaign spread rapidly and gained a huge level of public support among villages across the country. A mobile phone petition proved highly successful, and was promoted in newspapers, TV, radio and public events. Urban youth in Ghana became an active constituency on the issue, spreading the message through Facebook, Instagram and Twitter.

Oxfam also engaged the public by visiting over 200 rural communities, explaining the campaign and urging farmers to speak up. Paper ‘thumbprint’ petitions were even available to be signed by those not able to read or write.

Using these traditional and media platforms, the petition ended up collecting more than 20,000 signatures. One hundred farmers marched to Parliament to present it to the government.

The months spent campaigning paid off well for small-scale farmers when the 2014 Budget was presented on November 19, 2013. The following conditions were included:

  • Maintained agriculture as one of the four priority sectors to invest oil revenue in the next 3 years.
  • Allocated 15 percent of government-expected oil revenue in 2014 to agriculture under the Annual Budget Funding Allocation. This in addition to the mainstream budget allocation to the agricultural sector represents a 23 percent increase in agricultural budget allocation from 2013, with the vast majority of this money (94.5 percent) allocated on ‘poverty focused agriculture.’
  • Proposed to scale up the commercial agricultural insurance system established in 2011 on a pilot basis to cover multiple crops, weather and more regions.

The success of the campaign was celebrated across the nation on National Farmers Day in December.

The work of Oxfam and its Ghanaian partners, as well as the work of the Ghanaian people in mobilizing their fellow community members, shows how the collaboration of many in fighting for their rights can be a real cause to celebrate.

— Mollie O’Brien

Sources: OXFAM, OXFAM(2), Joy Online

Of all of the former Soviet republics in Central Asia, Turkmenistan has the smallest population and is made up of mostly just desert regions. The extremely strict isolation enacted by dictator Saparmurat Niyazov ended around the time of his death, but the government still remains autocratic. According to Turkmenistan officials, the country is estimated to have the world’s fifth largest natural gas reserves, but despite the wealth that comes from these reserves, there is still a large number of people in the country living in poverty.

The country came into an age of isolation after achieving independence from the Soviet Union in 1991, which has only recently shown signs of improvement. The Democratic Party of Turkmenistan is the only political party in the country and was led by the former president Saparmurat Niyazov until his death in 2006. After making himself president for life, he spent much of the country’s money on daunting projects while heavily cutting social welfare at the same time. Kurbanguly Berdymuhamedov took control of Turkmenistan after the former president’s death and has not fulfilled many of his promises toward political reform in the country.

Turkmenistan was considered the poorest of all of the Soviet-occupied territories and in 1989, 45 percent of the population lived below the national poverty line. The country generally has a limited infrastructure with an insufficient workforce, poor communication and signaling equipment, and a general lack of paved roads. The roads are not regularly maintained or developed, and only 30 percent of households have a telephone. The medical facilities in Turkmenistan are minimal and hard to come by as well, with very low standards compared to Western countries. Military and police presence is very common in public areas because of crime rates and corruption in the country. These authorities often monitor and apprehend people that are perceived as a military or security threat, for example, the people that are simply taking pictures of government buildings.

The economy is underdeveloped because foreign investors have been steering clear of the country for years due to rising conflicts with the legal status of offshore oil and the lack of export routes. The country has been struggling to fully benefit from their massive gas and oil deposits as a result. Each year Turkmenistan produces nearly 70 billion cubic meters of natural gas and about two-thirds of that goes to the Russian gas monopoly, Gazprom. Fortunately, in 2006, a protracted dispute between Russia and Turkmenistan ended with Gazprom agreeing to a 54 percent increase in pay to Turkmenistan. Since then, vast gas pipelines have been opened to China and Iran in efforts to break Russia’s hold on its natural gas experts. There have also been efforts to take part in a project with the European Union called the Nabucco Pipeline, which would provide an alternative to the current Russian gas supplies to Europe. Though over 40 percent of developing countries in Central Asia are experiencing the same hardships, Turkmenistan has a brighter future because of its greater fiscal capacity and great natural gas reserves.

-Kenneth W. Kliesner

Photo: Daily Mail
Asia News, BBC, Mahara

Greenhouse gas (GHG) emissions have been identified as having a significant impact on environmental problems through changes in the climate. Although carbon dioxide is the most abundant anthropogenic greenhouse gas in the atmosphere, United States President Barack Obama’s administration has begun taking steps to decrease methane emissions.

Methane makes up only 9 percent of the nation’s greenhouse gas pollution, yet it has 20 times the potency of carbon dioxide. This allows for the gas to have a significant impact on the global climate. Moreover, methane emissions largely come from leaks in oil and natural gas production, various agricultural processes and melting permafrost.

During a 2009 United Nations climate change conference, Obama declared that the U.S. would decrease its GHG emissions 17 percent by 2020. Since then, environmentalists have argued that a substantial reduction of climate change impacts would require methane emissions to be addressed. And although a methane reduction strategy has been around for a while, the natural gas industry has been able to expand rapidly regardless of its connection to methane emissions.

The White House has stated that the Environmental Protection Agency plans to assess methane emissions and develop a strategic plan of action that is proportionate to the severity of impacts.

Reducing methane pollution may require for regulatory actions to be taken towards the oil and natural gas industry. If that is the case, there will be more of a need for U.S. to realize its renewable energy potential. This means the U.S. government would have to take meaningful steps to allow for offshore wind to develop on the Atlantic coast with solar and geothermal energy expansion in the West. It is possible, but political will and coordination on multiple levels of both the public and private sector will be necessary.

A shale-gas revolution has defined contemporary energy policy. Abundance in natural gas seemingly allowed for the heavy-emitting coal industry to be phased out for cleaner energy sources. However, analysis on methane’s impact on the global climate indicates that the effects are still significant and the GHG has to be reduced.

Therefore, with the Obama administration’s announcement of plans to cut methane emissions, it seems as though renewable energy would be the ideal avenue for energy policy.

– Jugal Patel

Sources: Reuters, New York Times
Photo: Ars Technica

Poverty in Israel
Poverty in Israel? Yes. Israel has one of the world’s more advanced economies. It has a vibrant service industry and the recent discovery of immense natural gas reserves in the eastern Mediterranean, which have been estimated to hold billions of dollars of natural gas make Israel’s economic future look quite bright and prosperous.

Given all of this, one would not expect Israel to have the highest poverty rate among developed countries.

The Israeli National Central Bureau of Statistics published a study in which it noted that Israel’s poverty rate stands at 20.9 percent among countries who are members of the Organization of Economic Cooperation and Development (OECD.) This places Israel as the country with the highest rate of poverty of the member countries. Israel also placed fifth out of all member countries in terms of income inequality.

While many countries have been hit hard by the global financial crisis, according to the OECD’s report, one of the reasons for Israel abnormally high poverty rate is due to the fact that a large majority of those of the working age in Israel do not in fact work.

The numbers are surprising: about 40 percent of Israeli’s between the ages of 15 and 64 are not working. By comparison, 33 percent of those in other OECD countries are not working.

The number of those in poverty is also expected to rise as Israel plans to cut benefits for child allowances as well. According to the OECD report, 30,000 to 40,000 more children will be placed under the poverty line. This all come on the heels of criticisms of the Benjamin Netanyahu administration due to lavish spending on various items. One particular example given by the Huffington Post is Netanyahu’s spending $127,000 of public funds on a sleeping cabin while visiting London.

The Netanyahu administration has also shot up spending by 80 percent since taking office in 2009, according to the Huffington Post.

The natural gas reserves that have been discovered in the eastern Mediterranean are likely to give Israel a boost in both its overall economic rank and the number of jobs it creates.

According to Forbes, it will likely bring over $60 billion in the next 20 years.

Israel is one of the more wealthy countries in the world, and with its natural gas fields in the works, it stands to fundamentally change the shape of both Middle Eastern economics and politics the world over. However, as Israel moves forward with this significant improvement in its countries, it cannot forget its citizens who are falling under the poverty line.

Arthur Fuller

Sources: Forbes, Haaretz, OECD, The Times of Israel, Forbes, CIA World Factbook, New York Times, Huffington Post
Photo: Two Rivers