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Electricity problems in Lebanon: serious discussions but no easy solutions | Business and Economy News


Beirut, Lebanon- Lebanon’s continuing economic crisis has created a fuel shortage, adding prolonged power cuts to the miseries of Lebanese already facing soaring inflation and shortages of other basic commodities.

While experts have said that a proposal recently presented by the US ambassador here to revive a transnational gas pipeline from Egypt to Lebanon could help alleviate the problem, it is far from a long-term solution for the persistent failure of the country to generate enough electricity.

“It’s not a new idea. From 2009 to 2010, gas was pumped from Egypt to Jordan and from Syria to Lebanon, ”Diana Kaissy, member of the board of directors of the Lebanese Petroleum Initiative, told Al Jazeera. gas and an expert in energy governance.

This arrangement, using the Arab pipeline, ended when Lebanon defaulted on payments and the attacks on the pipeline in Egypt cut off supplies. Studies are also still needed to determine the damage the war in Syria may have caused to the pipeline.

“Technically speaking, it could be done by the end of this year if there is serious political will,” Kaissy said.

Energy ministers from Egypt, Lebanon, Syria and Jordan met in Amman on Wednesday. The rally took place following a meeting between Lebanese and Syrian officials last weekend which marked the highest official meeting between the two countries in years.

The ministers affirmed on Wednesday their desire to facilitate gas transfers to Lebanon. Lebanese officials said the World Bank had offered to provide financing for the gas, but provided no further details.

Buildings are seen at night during a power cut in parts of Beirut, Lebanon [File: Mohamed Azakir/Reuters]

Over the past two years, Lebanon has been offered a number of international loans and grants, including from the IMF, on the condition that the country implements transparency and corruption reforms – which its ruling class has yet to do so, although the country is sinking deeper into poverty and dysfunction.

A spokeswoman for the World Bank told Al Jazeera on Tuesday that the Bank was not in a position at this time to give details of what could have been discussed.

Potential obstacles

However, there are other potential political obstacles. The United States is currently sanctioning Syria’s energy sector, but Dorothy Shea, the U.S. ambassador to Lebanon, said those restrictions could be relaxed.

The US proposal was widely seen in Lebanon as a refutation of a plan put forward by Hezbollah chief Hassan Nasrallah to import fuel from Iran – a proposal that could land Lebanon in violation of US sanctions against energy exports. from this country.

Nasrallah talked about the plan for a while. He gave a speech in August announcing when the first ship would leave Iran, shortly before Shea announced the pipeline initiative.

“It would have been possible years ago when Lebanon asked for waivers of the Caesar law (US sanctions against Syria), so obviously it was the Iranian ship that got things done,” said Marc Ayoub, energy researcher at the American University of Beirut’s Issam Fares Institute, told Al Jazeera.

“I think it has to do with the US-Iran conflict at its best – they supply tankers, we will supply gas, that’s how the game is played,” Ayoub said.

Others disagreed.

“This is something that has been in the works for several months,” independent energy consultant Jessica Obeid told Al Jazeera. “The timing is weird. But you can’t just bring in several countries and decide on something like that, there is a logistics that has to be in place, the willingness of countries to sell something to Lebanon without Lebanon being able to pay for it.

Lebanese Minister of Energy, Raymond Ghajar, attends a press conference with Jordanian Minister of Energy and Mineral Resources Hala Zawati, Syrian Minister of Petroleum and Mineral Resources Bassam Tohme and Egyptian Minister of Petroleum and Mineral Resources, Tarek El Molla in Amman, Jordan [Alaa Al Sukhni/Reuters]

Whatever the policy, Lebanese state-run power plants have been inadequate for decades, and electricity production from Egyptian gas would be far from filling the gap. The current proposal calls for it to be sent to a power plant in northern Lebanon and generate around 450 megawatts of electricity.

“Lebanon needs around 3,600 megawatts,” Kaissy said. “We are currently producing 700 megawatts. It would therefore be substantial. “

Those 700 megawatts translate to about two to three hours of electricity per day across the country.

“This is a temporary solution, but it will fill a gap as we enter the end of [government fuel] subsidies without any plausible solution for people, ”Ayoub said.

Another problem that could hinder is that Israel sells gas to Jordan through the same pipeline, which requires a technical change in the flow of the pipeline or possibly the construction of a new pipeline.

“Although Lebanon is facing [and paying] On the Egyptian side, Egyptian gas is likely to be traded with gas from Leviathan (an Israeli gas field) to allow its transport via the AGP. If this is indeed the case, are the Lebanese authorities ready to sign this? asked Mona Sukkarieh, political risk consultant and co-founder of Middle East Strategic Perspectives.

“Already there is Israeli gas to Jordan via the Arab pipeline – are you going to build a parallel pipe then? All of these require technical expertise, and all need to be discussed, ”said Laury Haytayan, oil and gas expert.

On Tuesday, there were rumors that the end of government fuel subsidies was imminent, a move that would make fuel unaffordable for many Lebanese, but some hoped to at least solve the supply problems for consumers. Either way, many Lebanese are adjusting to a harsh new reality – that for years their currency had been overvalued, and now they must adapt.

“We have changed, everything has changed between last year and this year. The way of life, the dream that we have had for the past 15 years – now we are living the reality that we should have been living the minute we came out of the Civil War, ”Kaissy said. “We’re really adjusting to the true value of the currency now, and you can’t have a middle income family with three cars. “

The lack of strong governance in the country also leaves very little hope for improvement in the near future.

“As long as there is an economic crisis, we cannot expect solutions,” Ayoub said. “If you have no solutions and no agreement on macroeconomic policy, I think in about two years we can get back on track if there is someone who is ready to make reforms. “

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