IAEE Members and subscribers to The Energy Journal: Please log in to access the full text article or receive discounted pricing for this article.

Stability versus Sustainability: Energy Policy in the Gulf Monarchies

Abstract:
Over the past half-century, production from vast reserves of hydrocarbons has transformed the once destitute Persian Gulf monarchies into developed states with comfortable lifestyles. However, longstanding policies that stimulate energy demand in these states are diverting an ever-larger share of resource production into domestic markets, threatening the region's chief export and biggest contributor to GDP. Five of these six sheikhdoms must soon choose between maintaining energy subsidies and sustaining exports. Rising domestic demand for natural gas, once considered nearly free, has already forced some states to shift to higher-cost resources, including imports. For now, governments have absorbed these costs and insulated consumers from higher prices. This practice only intensifies the pressure on exportable resources. As hydrocarbon production reaches a plateau, domestic consumption will gradually displace exports. Politically difficult reforms that moderate consumption can therefore extend the longevity of exports, and perhaps, the regimes themselves.

Download Executive Summary Purchase ( $25 )



JEL Codes: Q41: Energy: Demand and Supply; Prices, Q40: Energy: General, Q35: Hydrocarbon Resources, Q37: Nonrenewable Resources and Conservation: Issues in International Trade

Keywords: Energy subsidy reform, Electricity pricing, Natural gas consumption, Hydrocarbon exports, Persian Gulf monarchies

DOI: 10.5547/01956574.36.4.jkra

References: Reference information is available for this article. Join IAEE, log in, or purchase the article to view reference data.

Published in Volume 36, Number 4 of the bi-monthly journal of the IAEE's Energy Economics Education Foundation.

 

© 2024 International Association for Energy Economics | Privacy Policy | Return Policy