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Emerging East Africa Energy
Emerging East Africa Energy
Source: Energy Information Administration
Although oil and natural gas exploration has been going on for decades in various East African countries, there has been limited success until recently. In the past there were doubts about the amount of recoverable resources in the region, along with regional and civil conflicts that presented challenges and risks to foreign companies. Consequently, exploration activities in East Africa have evolved at a much slower pace relative to other African regions. However, the pace of exploration activity has recently picked up after foreign oil and gas companies made a series of sizable discoveries in several East African countries.
This new regional analysis covers emerging developments in the oil and gas sectors in five East African countries: Mozambique, Tanzania, Uganda, Kenya, and Madagascar. The larger area that EIA considers as East Africa (see Africa by region map) includes 21 countries. In this region, by far the largest oil and gas producers are Sudan and South Sudan, which are not covered in this report because they are mature oil producers.
Among the countries with emerging oil and gas developments, Mozambique, Tanzania, Uganda, and Madagascar have shown the most progress toward commercial development of newly discovered resources in recent years. Uganda and Madagascar will most likely be the next new oil producers on the continent. Mozambique will probably be the first country in East Africa to develop the capability to export liquefied natural gas (LNG), possibly followed by Tanzania.
Although progress toward commercial development of hydrocarbon resources in Kenya has been modest, the country plays a vital role in the region as an oil transit hub, particularly for oil products coming into the region. Kenya is planning to expand its role by embarking on a multi-million dollar investment to increase its midstream and downstream capacity.
Country Analysis Brief: Algeria
Country Analysis Brief: Algeria
Source: Energy Information Administration
Algeria is the largest natural gas producer and second largest oil producer, after Nigeria, in Africa. It became a member of the Organization of the Petroleum Exporting Countries (OPEC) in 1969, shortly after it began oil production in 1958. Currently, the country is heavily reliant on its hydrocarbon sector, which accounted for almost 70 percent of government budget revenue and grants and about 98 percent of export earnings in 2011, according to the International Monetary Fund.
In recent years, crude oil production has been stagnant, while natural gas production has gradually declined, because new production and infrastructure projects have repeatedly been delayed. Additionally, in the last three licensing rounds there has been limited interest from investors to undertake new oil and gas projects under the government’s current terms. As a result, the Algerian parliament recently approved amendments to the current hydrocarbon law and introduced fiscal incentives to entice foreign companies to take on new ventures, particularly exploration in offshore areas and in areas onshore that contain shale resources.
The recent militant attack on the In Amenas gas facility prompted security concerns about operating in Algeria’s remote areas, particularly in the south. Any major disruption to Algeria’s hydrocarbon production would not only be detrimental to the local economy but, depending on the scale of lost production, could affect world oil prices. Also, since Algeria is the fourth largest natural gas supplier to Europe, unplanned cuts to natural gas output could affect some European countries. Natural gas and oil account for almost all of Algeria’s total energy consumption, and the country consumes very small amounts of hydro power, coal, and traditional biomass.
Country Analysis Brief: United Kingdom
Country Analysis Brief: United Kingdom
Source: Energy Information Administration
The United Kingdom (UK) is the largest producer of oil and the second-largest producer of natural gas in the European Union (EU). Following years of exports of both fuels, the UK became a net importer of natural gas and crude oil in 2004 and 2005, respectively. Production from UK oil and natural gas fields peaked in the late 1990s and has declined steadily over the past several years, as the discovery of new reserves and new production have not kept pace with the maturation of existing fields.
The UK government, aware of the country’s increasing reliance on imported fuels, has developed key energy policies to address the domestic production declines. These include: using enhanced recovery from current and maturing oil and gas fields, promoting energy efficiency, decreasing the use of fossil fuels and thus reliance on imports, promoting energy trade cooperation with Norway, and decarbonizing the UK economy by investing heavily in renewable energy. However, for the UK to decarbonize its economy, huge investments in the energy infrastructure are needed.
Despite the expanding use of renewable energy, petroleum and natural gas will continue to account for the vast majority of UK’s energy consumption. In 2011, petroleum and natural gas accounted for 38 and 35 percent, respectively, of total energy consumption, with the renewable energy sources growing to 12 percent of the total. Renewable energy use, particularly in the electric power sector, has more than tripled between 2000 and 2011.
Energy use per unit of gross domestic product (GDP) in the UK is one of the lowest among western economies. The UK has seen total energy consumption decline by more than 15 percent between 2004 and 2011. This decline resulted from smaller contribution of energy-intensive industry to the economy, economic contraction, and improvements in energy efficiency.
State-Level Energy-Related Carbon Dioxide Emissions, 2000-2010
State-Level Energy-Related Carbon Dioxide Emissions, 2000-2010
Source: Energy Information Administration
Energy-related carbon dioxide emissions vary significantly across states (Figure 1), whether considered on an absolute or per capita basis. The overall size of a state, as well as the available fuels, types of businesses, climate, and population density, play a role in both total and per capita emissions. Additionally, each state’s energy system reflects circumstances specific to that state. For example, some states are located near abundant hydroelectric supplies, while others contain abundant coal resources.This paper presents a basic analysis of the factors that contribute to a state’s carbon dioxide profile. This analysis neither attempts to assess the effect of state policies on absolute emissions levels or on changes over time, nor does it intend to imply that certain policies would be appropriate for a particular state.
The term "energy-related carbon dioxide emissions" as used in this paper, includes emissions released at the location where fossil fuels are used. For feedstock application, carbon stored in products such as plastics are not included in reported emissions for the states where they are produced.
It is also important to recognize that the state-level carbon dioxide emissions data presented in this paper count emissions based on the location where the energy is consumed as a fuel. To the extent that fuels are used in one state to generate electricity that is consumed in another state, emissions are attributed to the former rather than the latter. An analysis that attributed "responsibility" for emissions with consumption rather than production of electricity, which is beyond the scope of the present paper, would yield different results.
Country Analysis Brief: Iraq
Country Analysis Brief: Iraq
Source: Energy Information Administration
Iraq was the world’s eighth largest producer of total petroleum liquids in 2012, and it has the world’s fifth largest proven petroleum reserves after Saudi Arabia, Venezuela, Canada, and Iran. Just a fraction of Iraq’s known fields are in development, and Iraq may be one of the few places left where much of its known hydrocarbon resources has not been fully exploited. Iraq’s energy sector is heavily based on oil. Over 90 percent of its energy needs are met with petroleum (2010 estimate), with the rest supplied by natural gas and hydropower.
Iraq has begun to develop its oil and natural gas reserves after years of sanctions and wars, but it will need to develop its infrastructure in order to reach its production potential. According to estimates by Iraq’s Deputy Prime Minister for Energy, capital expenditures of $30 billion per year in Iraqi energy infrastructure are required to meet Iraq’s production targets. Progress has been hampered by political disputes and the lack of a law to govern development of Iraq’s oil and gas. The proposed Hydrocarbon Law, which would govern contracting and regulation, has been under review in the Council of Ministers since October 26, 2008, but has not received final passage.
Country Analysis Brief: Iran
Country Analysis Brief: Iran
Source: Energy Information Administration
Iran, a member of the Organization of the Petroleum Exporting Countries (OPEC), ranks among the world’s top four holders of both proven oil and natural gas reserves. In 2012, Iran saw unprecedented drops in its oil exports as sanctions by the United States (U.S.) and European Union (EU) were tightened, targeting Iranian oil export revenues. Preliminary data show that Iran ranked fifth in terms of crude oil and condensate exports, which was in contrast to its third position only two years ago. Given the sanctions and resulting drop in production, export volumes likely will continue to be hampered.
Iran has the world’s second largest natural gas reserves, but the sector is underdeveloped and used mostly to meet domestic demand. In contrast to the decreasing oil production, natural gas development has been slowly expanding. Nonetheless, natural gas production has been lower than expected as a result of a lack of foreign investment and technology.
Country Analysis Brief: Ecuador
Country Analysis Brief: Ecuador
Source: Energy Information Administration
By global standards, Ecuador is a relatively small oil producer and exporter. However, the oil sector plays a prominent role in the country’s politics and economic welfare. The oil sector accounts for about 50 percent of Ecuador’s export earnings and about one-third of all tax revenues. Despite being a crude oil exporter, Ecuador must still import refined petroleum products due to the lack of sufficient domestic refining capacity to meet local demand. As a result, the country does not always reap the full rewards of high world oil prices — while these high prices bring Ecuador greater export revenues, they also increase the country’s refined product import bill.
Ecuador rejoined the Organization of the Petroleum Exporting Countries (OPEC) in 2007, after leaving the organization at the end of 1992. Ecuador is OPEC’s smallest oil producer and exporter. Despite an increasingly challenging investment environment, Ecuador has managed to slightly increase production since 2009.
Ecuador’s energy mix is largely dependent upon oil, which accounted for approximately 70 percent of the country’s total energy consumption in 2010. Hydroelectric power was the second largest energy source, though its share of Ecuador’s electricity generation — nearly two-thirds in 2008 — has declined in recent years due to droughts. Non-hydro renewables constitute another important part of Ecuador’s energy mix, almost all of which is attributable to the use of bagasse (the fibrous residue of processed sugarcane) in industry and the traditional use of biomass in rural households. However, estimates of Ecuador’s biomass consumption are inherently imprecise due to the fact that traditional fuel wood is not typically bought and sold in easily observable commercial markets.
Country Analysis Brief: Mexico
Country Analysis Brief: Mexico
Source: Energy Information Administration
Mexico is one of the ten largest oil producers in the world, the third-largest in the Western Hemisphere, and an important partner in the U.S. energy trade. However, the amount of oil produced in Mexico has steadily decreased since 2004 due to natural production declines from Cantarell and other large offshore fields, though the rate of their decline has abated in recent months. The onus on arresting or reversing production declines falls squarely on the shoulders of Petroleós Mexicanos (PEMEX), the state-owned oil company, due to constitutional limits on foreign involvement in the exploration, production, and ownership of the nation’s hydrocarbon resources. Nonetheless, recently enacted and potential reforms could liberalize the sector and promote greater foreign investment.
Oil is a crucial component of Mexico’s economy. The oil sector generated 16 percent of the country’s export earnings in 2011, according to Mexico’s central bank, a proportion that has declined over time. More significantly, earnings from the oil industry (including taxes and direct payments from PEMEX) accounted for 34 percent of total government revenues in 2011. Declines in oil production have a direct impact upon the country’s economic output and the government’s fiscal health, particularly as refined product consumption and import needs grow.
Mexico’s total energy consumption in 2010 consisted mostly of oil (56 percent), followed by natural gas (29 percent). Natural gas is increasingly replacing oil as a feedstock in power generation. However, Mexico is a net importer of natural gas, so higher levels of natural gas consumption will likely depend upon more imports from either the United States or via liquefied natural gas (LNG) from other countries. All other fuel types contribute relatively small amounts to Mexico’s overall energy mix. Most of Mexico’s non-hydro renewables consumption is attributable to traditional biomass, the use of which is important in rural areas albeit difficult to quantify accurately, but the country also has noteworthy geothermal and wind energy sectors.
Country Analysis Brief: United Arab Emirates
Country Analysis Brief: United Arab Emirates
Source: Energy Information Administration
Since declaring independence from the United Kingdom in 1971, the United Arab Emirates (UAE) has relied on its large hydrocarbon endowments to support its economy, though through concerted efforts over the last several decades that is beginning to change. While the UAE is making notable progress in diversifying its economy through tourism, trade, and manufacturing; in the near-term oil, natural gas, and associated industries will continue to account for the majority of economic activity in the seven Emirates (Abu Dhabi, Ajman, Al Fujayrah, Dubai, Ras al Khaymah, Sharjah, and Umm al Qaywayn).
On the strength of its hydrocarbon sector the UAE is one of the world’s wealthiest nations, with a GDP per capita (at purchasing power parity) estimated at $48,158 in 2011 ranking it eighth in the world in 2011 (directly behind the United States). Beyond the hydrocarbon economy—which continues to account for approximately 80 percent of total government revenues—the UAE is becoming one of the world’s most important financial centers and a major entrepôt in the Middle East. Investments in infrastructure and technology, and the development of projects such as the Khalifa Industrial Zone Abu Dhabi (KIZAD) and other economic “free zones,” continue to provide the UAE with insurance against oil price declines and global economic stagnation.
Since the nadir of 2009, the UAE solidified its economic portfolio, but it continues to rely on its vast hydrocarbon resources for the majority of its economic activity. Recovering oil prices and robust trade growth have buoyed the economy, and forecasts expect modest growth of 2.3 percent in 2012. This figure could change significantly if the geopolitical pressures of the region worsen—for example, through an expansion of international sanctions on key trading partner Iran—or oil prices decline due to economic slowdowns in developed economies. The UAE is likely to be in a better position to cope with such disruptions than most of its neighbors, but its economy is still heavily dependent on its hydrocarbon resources. The diversification of its economy should continue over the next several years, but for economists studying the UAE the most important indicator to watch remains the price of crude oil.
Country Analysis Brief: Nigeria
Country Analysis Brief: Nigeria
Source: Energy Information Administration
Nigeria is the largest oil producer in Africa and has been a member of the Organization of Petroleum Exporting Countries (OPEC) since 1971. In 2011, Nigeria produced about 2.53 million barrels per day (bbl/d) of total liquids, well below its oil production capacity of over 3 million bbl/d, due to production disruptions that have compromised portions of the country’s oil for years. The Nigerian economy is heavily dependent on the oil sector, which accounts for over 95 percent of export earnings and about 40 percent of government revenues, according to the International Monetary Fund (IMF).
The oil industry is primarily located in the Niger Delta where it has been a source of conflict. Local groups seeking a share of the oil wealth often attack the oil infrastructure and staff, forcing companies to declare force majeure on oil shipments. At the same time, oil theft, commonly referred to as “bunkering,” leads to pipeline damage that is often severe, causing loss of production, pollution, and forcing companies to shut-in production. Protest from local groups over environmental damages from oil spills and flaring undermined relations between local communities and international oil companies (IOCs). The industry has been blamed for pollution that has damaged air, soil, and water, leading to losses in arable land and decreasing fish stocks.
In addition to oil, Nigeria holds the largest natural gas reserves in Africa, but has limited infrastructure in place to develop the sector. Natural gas that is associated with oil production is mostly flared, but the development of regional pipelines, the expansion of liquefied natural gas (LNG) infrastructure, and policies to ban gas flaring are expected to accelerate growth in the sector, both for export and domestic use in electricity generation. Uncertainties in Nigeria’s investment policies and regulatory framework have caused a slowdown in oil and gas exploration activity, and delays in project development, including LNG projects. However, the long-awaited and delayed Petroleum Industry Bill (PIB) could potentially iron out investment uncertainties and set a regulatory framework for the country’s oil and gas industry.
U.S. households forecast to use more heating fuels this winter compared with last winter
U.S. households forecast to use more heating fuels this winter compared with last winter
Source: Energy Information Administration
U.S. households are expected to use more heating fuel this winter compared with last winter because temperatures are expected to be near normal this winter compared with last winter’s above-normal temperatures in many parts of the country.
Household natural gas heating demand this winter (October through March) is expected to be up nearly 14%, heating oil up 17%, electricity up 8%, and propane up 17%, according to EIA’s Short-Term Energy and Winter Fuels Outlook for the 2012-13 U.S. heating season. While demand is expected to be higher than last winter, consumption is forecast to be less than the five-year average for all the major heating fuels except heating oil.
EIA’s forecast for higher household heating demand mainly reflects a much colder winter east of the Rocky Mountains compared with last winter, with heating degree days in the Northeast, Midwest, and South expected to be 20% to 27% greater this winter, according to National Oceanic and Atmospheric Administration’s (NOAA) forecast.
At the same time, supplies look plentiful for most heating fuels this winter…
Country Analysis Brief: Venezuela
Country Analysis Brief: Venezuela
Source: Energy Information Administration
Venezuela is one of the world’s largest exporters of crude oil and the largest in the Western Hemisphere. The oil sector is of central importance to the Venezuelan economy. As a founding member of the Organization of the Petroleum Exporting Countries (OPEC), Venezuela is an important player in the global oil market.
In 2010, Venezuela consumed 3.2 quadrillion British thermal units (BTUs) of total energy. Oil represents the bulk of total energy consumption in Venezuela. Hydroelectricity and natural gas each account for over 20 percent, while coal accounts for the remainder of energy use. Over the last decade the share of oil consumption in the country’s total energy mix has risen from 36 percent to 47 percent, largely because the Venezuelan government subsidizes liquid fuels.
Regional Analysis Brief: South China Sea
Regional Analysis Brief: South China Sea
Source: Energy Information Administration
The East China Sea is a semi-closed sea bordered by the Yellow Sea to the north, the South China Sea and Taiwan to the South, Japan’s Ryukyu and Kyushu islands to the East and the Chinese mainland to the West. Evidence pointing to potentially abundant oil and natural gas deposits has made the sea a source of contention between Japan and China, the two largest energy consumers in Asia.
The sea has a total area of approximately 482,000 square miles, consisting mostly of the continental shelf and the Xihu/Okinawa (Chinese name/Japanese name) trough, a back-arc basin formed about 300 miles southeast of Shanghai between the two countries. The disputed eight Daioyu/Senkaku (Chinese/Japanese name) islands lie to the northeast of Taiwan, with the largest of them two miles long and less than a mile wide. Though barren, the islands are important for strategic and political reasons, as ownership can be used to bolster claims to the surrounding sea and its resources under the United Nations Convention on the Law of the Sea. To date, China and Japan have not resolved their ownership dispute, preventing wide-scale exploration and development of East China Sea hydrocarbons.
Country Analysis Brief: Russia
Country Analysis Brief: Russia
Source: Energy Information Administration
Russia is a major producer and exporter of oil and natural gas and its economy largely depends on energy exports. Russia’s economic growth continues to be driven by energy exports given its high oil and gas production and the elevated prices for those commodities. Internally, Russia gets over half of its domestic energy needs from natural gas.
Russia was the world’s second-largest producer of oil (after Saudi Arabia) and the second-largest producer of natural gas in 2011 (second to the United States). However, preliminary data through June 2012 indicate that Russia had surpassed Saudi Arabia as the top oil producer for much of the year.
Russia’s oil and gas sector continues to be affected by high taxes and export duties. While export duties for crude oil and petroleum products were lowered to 60 and 65 percent, respectively, in 2011, producers still face high mineral extraction taxes and a revenue-based tax system.
Country Analysis Brief: Kazakhstan
Country Analysis Brief: Kazakhstan
Source: Energy Information Administration
With total liquids production estimated at 1.6 million barrels per day (bbl/d) in 2012, Kazakhstan is a major producer; however, key to its continued growth in liquids production will be the development of its giant Tengiz, Karachaganak, and Kashagan fields. Furthermore, development of additional export capacity will be necessary for production growth.
Rising natural gas production over the last decade has transformed Kazakhstan from a net gas importer to a country that as of 2011 was self-sufficient. Natural gas development has lagged oil due to the lack of domestic gas pipeline infrastructure linking the western producing region with the eastern industrial region, as well as the lack of export pipelines.
Kazakhstan is land-locked and lies a great distance from international oil markets. The lack of access to a seaport makes the country dependent mainly on pipelines to transport its hydrocarbons to world markets. It is also a transit state for pipeline exports from Turkmenistan and Uzbekistan. Neighbors China and Russia are key economic partners, providing sources of export demand and government project financing.
Country Analysis Brief: Canada
Country Analysis Brief: Canada
Source: Energy Information Administration
Canada is a net exporter of most energy commodities and is an especially significant producer of conventional and unconventional oil, natural gas, and hydroelectricity. It stands out as the largest foreign supplier of energy to the United States, its southern neighbor and one of the world’s largest consumers of energy. Just as the United States depends on Canada for much of its energy needs, so is Canada profoundly dependent on the United States as an export market. However, economic and political considerations are leading Canada to consider ways to diversify its trading partners, especially by expanding ties with emerging markets in Asia.
Canada’s large territory is endowed with an exceptionally rich and varied set of natural resources, which enables it to rank among the five largest energy producers in the world. It produced an estimated 18.2 quadrillion British thermal units (Btu) of primary energy in 2009, relative to 13.0 quadrillion Btu of primary energy consumed. Its economy is relatively energy-intensive when compared to other industrialized countries, and is largely fueled by petroleum for transportation purposes, natural gas, and hydroelectricity.
Country Analysis Brief: China
Country Analysis Brief: China
Source> Energy Information Administration
China is the world’s most populous country and has a rapidly growing economy, which has driven the country’s high overall energy demand and the quest for securing energy resources. According to the International Monetary Fund, China’s real gross domestic product (GDP) grew at an estimated 9.2 percent in 2011 and 7.8 percent in the first half of 2012, after registering an average growth rate of 10 percent between 2000 and 2011. Economic growth continues to slow in 2012 as the global financial crises unfolds, industrial production and exports decrease, and the government attempts to curb economic inflation and excessive investment in some markets. China mitigated the 2008 global financial crisis with a massive $586 billion (4 trillion yuan) stimulus package spread over two years. The recent global downturn in 2012 has spurred China’s government to begin incremental monetary easing measures and consider a second smaller fiscal stimulus package.
China is the world’s second largest oil consumer behind the United States, and the largest global energy consumer, according to the International Energy Agency (IEA). The country was a net oil exporter until the early 1990s and became the world’s second largest net importer of oil in 2009. China’s oil consumption growth accounted for half of the world’s oil consumption growth in 2011. Natural gas usage in China has also increased rapidly in recent years, and China has looked to raise natural gas imports via pipeline and liquefied natural gas (LNG). China is also the world’s largest top coal producer and consumer and accounted for about half of the global coal consumption, an important factor in world energy-related CO2 emissions.
Coal supplied the vast majority (70 percent) of China’s total energy consumption of 90 quadrillion British thermal units (Btu) in 2009. Oil is the second-largest source, accounting for 19 percent of the country’s total energy consumption. While China has made an effort to diversify its energy supplies, hydroelectric sources (6 percent), natural gas (4 percent), nuclear power (1 percent), and other renewables (0.3 percent) account for relatively small shares of China’s energy consumption mix. The Chinese government set a target to raise non-fossil fuel energy consumption to 11.4 percent of the energy mix by 2015 as part of its new 12th Five Year Plan. EIA projects coal’s share of the total energy mix to fall to 59 percent by 2035 due to anticipated higher energy efficiencies and China’s goal to reduce its carbon intensity (carbon emissions per unit of GDP). However, absolute coal consumption is expected to double over this period, reflecting the large growth in total energy consumption.
Country Analysis Brief: Norway
Country Analysis Brief: Norway
Source: Energy Information Administration
+ Norway is Europe’s largest oil producer, the world’s second largest natural gas exporter, and is an important supplier of both oil and natural gas to other European countries.
+ Norway is the largest oil producer and exporter in Western Europe.
+ Norway is the second largest exporter of natural gas after Russia, and ranks fourth in world natural gas production.
Country Analysis Brief: Bolivia
Country Analysis Brief: Bolivia
Source: Energy Information Administration
Hydrocarbons are an important element of Bolivia’s economy, one of the poorest and least developed in Latin America. Though Bolivia exports natural gas to Brazil and Argentina, continued questions about the actual size of its proved natural gas reserves have contributed to skepticism about the country’s potential to be a significant fossil fuel producer and regional energy hub. Bolivia’s known fossil fuel endowment is largely concentrated in southern and eastern departments, which have been controlled by opposition parties that demand greater autonomy from the federal government — partly in order to increase investment in and revenues from the hydrocarbon sector.
Country Analysis Brief: Oman
Country Analysis Brief: Oman
Source: Energy Information Administration
Like most of its neighbors, Oman is dependent upon its oil sector for the majority of its export revenues and government spending. Oman possesses the largest oil reserves of any non-OPEC country in the Middle East and significant reserves of natural gas, of which it is a leading exporter regionally. While crude oil remains a significant yet declining part of its economy, Oman has made a concerted effort to diversify its economic base in face of its declining output. Under Sultan Qaboos bin Said’s “Vision 2020″ policy, Oman has made considerable investments and progress into developing gas resources, increasing gas production, and developing current and new oil fields.
