Problems in the Pipeline

Energy is so critical to every nation and in troubled times energy not only becomes more critical, but it also becomes more expensive and harder to get.

In the Middle East Jordan has had difficulty in maintaining supplies of natural gas through pipelines from Egypt. These pipelines, along with those that bring natural gas to Israel, have been repeatedly attacked and damaged, to the extent that supplies are interrupted. Much of the gas is used for the generation of electricity, where 6.8 million cubic metres a day is used to generate 80% of Jordan’s electricity needs.

In the short term Jordan will increase the price of electricity by between 9% and 17% but about 90% of its people will not pay any increase at all. That is because the tariff structure in Jordan sensibly has the lowest unit price for electricity for households that consume less than 600 kWh of electricity a month. That is a pricing structure that the whole of Europe and North America would do well to adopt.

In the long term Jordan is investigating the possibility of importing liquefied natural gas from Qatar, which will be much harder for those who want to disrupt supplies compared with the fixed land pipeline.

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