Imported gas takes over oil
Consumption of energy in Kuwait is hitting 700,000 per day, and gas consumption is edging over oil consumption at a daily rate of 372,000 versus 330,000 per day.
Our dependence on oil is decreasing and our import of gas from various parts of the world is increasing at a rate higher than the growth of our population.
The energy bill is increasing, reaching close to $3 billion per annum in subsidies, without any real program or any serious attempts to reduce our consumption.
The rate of consumption, however, is on a rise in most of the Arabian Gulf countries such as Saudi Arabia where the rate of daily consumption is higher than 4.6 million barrels of equivalent oil, of which about 2.7 million barrels is oil while the rest is gas. However, Saudi Arabia is also on the verge of increasing its investments in gas in order for it to be the main feed for energy. The United Arab Emirates and Qatar are mainly gas-based and are phasing out of oils.
Kuwait is increasingly dependent on gas, due to which its new refinery, which is under construction, is causing our oil industry some difficulties in terms of investing in production of fuel oils.
At the same time, Ministry of Electricity and Water is phasing out of oil quickly, as they are becoming addicted to gas because of its low maintenance costs and it is environmental friendly.
In addition, the cost for importing gas seems much cheaper to the extent that it is less than 10 percent of total amount of subsidies, which is currently $1.8 million. Of course, Kuwait is surrounded by the biggest gas exporters in the world – Qatar, Iran and Iraq.
However, that should not stop Kuwait from searching for other sources in order to put our eggs into bigger baskets globally. Our oil industry has to think seriously about switching to gas imports, and change and convert from the mode of refining units to more export of finished petroleum products in its three refineries.
Our energy consumption will not decrease unless a brave joint decision is taken by the government and the parliament to reduce our energy bills.
By Kamel Al-Harami Independent Oil Analyst