Local and Regional Politics Hinder Gas Production and Import - Article Example

The massive rise in demand for gas for both domestic and industrial use is forcing a gradual change of things although it will take billions for Kuwait to be able to fully tap this product. This is because the gas in the region is of low quality and high in sulfur making it hard to extract (Reuters 2014).

According to Kelli Maleckar of energy consultancy IHS, there is a current realization by most gas producers from the Middle East on both the environmental and economic benefits of increased production of gas. The other benefit is that gas can help ease the current rising power demands in the region.  Kuwait and the United Arab Emirates have been on the upfront of gas import to meet their power demands.  This has boosted their dependence on imported gas, especially during summer when power consumption goes up due to increased air conditioning. Saudi Arabia does not import gas (Reuters 2014).

Political woes have been at the center stage of delaying negotiations with major producing companies to tap the resources that lie within the country. These may also make it difficult for the country to import from outside. The country has entered into a $3 billion and $12 billion deal with BP and Shell for five years and six years respectively. Though this has been achieved there is always that possibility of a parliamentarian raising the deal at any given time as stated by Eman Embed Alkadi of consultancy Eurasia Group.  Other deals that Kuwait entered into include the one with Qatar a few weeks ago, though this could be just for a short time as a long-term deal with Qatar is almost impossible given Doha’s support of the Islamists (Reuters 2014).

The pipeline network in the region that has been in discussion for some time now would be an ideal long-term solution for the underlying issue, but this also has politics standing in its way. Meanwhile, the demand for gas in the member states of the Gulf Cooperation Council (GCC) is projected to rise by up to 50 percent by 2030. According to projections by IHS, this will rise from 256 billion cubic meters (bcm) in 2011 to 400 bcm in 2030. Piping of gas from Qatar to Kuwait also faced opposition in the past from neighbors Saudi Arabia; this is because many GCC countries have border issues that have been running for years (Reuters 2014).