Il noto esperto a livello internazionale in campo energetico Roudi Baroudi, pone in evidenza una riflessione in concomitanza con l’imminente arrivo della conferenza sul cambiamento climatico delle Nazioni Unite (COP26) che si terrà quest’anno a Glasgow.

Baroudi definisce questo appuntamento memorabile e storico in particolare per i paesi del bacino del Mar Mediterraneo, Italia compresa. Fa osservare che l’aumento delle temperature e la crisi climatica globale è in atto e gli eventi dell’estate 2021 ne sono la testimonianza reale.

Questi fenomeni non sono più eventi sporadici localizzati in determinate aree, ma costituiscono una vera e propria testimonianza della catastrofe climatica in atto.

Svariati paesi del Mediterraneo, specialmente appartenenti ad Asia ed Africa hanno già situazioni complesse dal punto di vista territoriale per via della posizione geografica (Sud Italia incluso), inoltre i paesi con meno disponibilità economica fanno ancora molta fatica nella conversione ad impianti con minor impatto ambientale.

Nonostante questo scenario apocalittico, incalza Baroudi, non tutto è perduto. L’Unione europea ha compiuto progressi importanti rispetto alla maggior parte del resto del mondo e sta adottando delle politiche più stringenti sulle emissioni.

Anche gli Stati Uniti stanno intensificando i propri sforzi dopo quattro anni di cambio rotta sotto l’amministrazione Trump. In tutto il mondo, finalmente, si sta avendo maggiore consapevolezza del problema in maniera più trasversale dal pubblico al privato.

Alla COP26, i leader ed i referenti politici dei paesi partecipanti dovrebbero lavorare costruttivamente ed ascoltare scienziati ed attivisti che chiedono un’azione più rapida ed efficace, inclusa una maggiore assistenza finanziaria per aiutare i paesi meno fortunati a unirsi seriamente alla lotta per il cambiamento climatico.

I programmi che i paesi del Mediterraneo porteranno a Glasgow saranno cruciali perché, nonostante la situazione in atto, la maggior parte di questi stati ha un vantaggio territoriale: ampi spazi e condizioni quasi ideali per le turbine eoliche offshore. Uno studio recente, che utilizza una varietà di tecnologie per elaborare dati previsionali, stima il potenziale combinato di energia eolica di tutti i 23 paesi euro mediterranei (in modo alquanto prudente) a quasi 1,5 milioni di megawatt. Si consideri che l’intera industria nucleare mondiale ha una capacità di circa 400.000 MW, ovvero meno di un terzo di quella che il Mediterraneo potrebbe produrre solamente con impianti eolici. Senza calcolare l’impiego di altre tecnologie: l’idrocinetica sia fluviale che marina (onde e maree), geotermica (on e offshore) e solare (200.000-300.000 MW).

Uno sviluppo omogeneo delle rinnovabili favorirebbe la transizione progressiva dai combustibili fossili, riducendo le emissioni di carbonio che causano il cambiamento climatico e quindi facendo gli interessi di tutti, ovunque.

Queste proiezioni positive non si avvereranno mai per osmosi. Molti paesi nel Mediterraneo hanno bisogno di assistenza finanziaria e tecnica per mettere in pratica i progetti di conversione. L’accordo di Parigi includeva impegni economici da parte degli stati più ricchi per finanziare i paesi più bisognosi, ma molti governi non hanno rispettato l’accordo. Questo è controproducente, proprio come la mancata distribuzione del vaccino contro il COVID ai paesi del Sud del mondo, un errore imperdonabile che non solo determina la morte di persone innocenti, ma crea anche terreno fertile per nuove varianti del virus. Se la transizione verso un’energia più pulita creasse difficoltà alle popolazioni già svantaggiate, potrebbe venire a mancare il sostegno popolare verso questo percorso, con conseguenze terribili per tutti noi. Se lasciato incontrollato, il cambiamento climatico potrebbe provocare morte e distruzione ovunque creando flussi migratori ingestibili.

Roudi Baroudi conclude esortando la COP26 a produrre nuovi programmi di finanziamento da parte dei paesi ricchi verso quelli più poveri senza creare situazioni di assistenzialismo. Ci sono moltissime risorse a disposizione e c’è poco tempo per agire, quindi gli stati finanziatori non possono permettersi di sbagliare. I prestiti agevolati andranno messi a disposizione per i paesi più virtuosi che garantiranno la finalizzazione dei progetti. L’unico modo per farlo è articolare una strategia coerente per eseguire progetti rilevanti e fattibili con tempi e budget ben definiti. In particolare, i governi regionali devono dissipare i timori giustificati che, i fondi destinati ai progetti per le energie rinnovabili o ad altri strumenti di de carbonizzazione, andranno invece a riempire le tasche di funzionari locali corrotti.

When the Opec+ alliance of oil producers gathers next week, group leader Saudi Arabia can savour a moment of triumph.
Eighteen months after slashing crude production during the pandemic, Riyadh is set to pump at almost pre-Covid levels of 9.8mn barrels a day this month as a recovering global economy clamours for energy supplies.
Furthermore, by bringing those shipments back slowly enough to avert a new surplus, Saudi Energy Minister Prince Abdulaziz bin Salman has revived crude prices to $80 a barrel. That’s swelled the kingdom’s petroleum revenues to a three-year high, putting them on track for an even bigger payout in 2022.
“Opec+ has had a very good year,” said Ben Luckock, co-head of oil trading at commodities merchant Trafigura Group. “They have delivered: they have managed to thread the needle.”
That’s a far cry from the tumult of last March, when the plunge in fuel demand briefly pitched Organization of Petroleum Exporting Countries and its partners into a vicious fight over customers. Those bitter memories seem very distant as the 23-nation network – jointly led by the Saudis and Russia – prepares to meet on Monday.
If there’s a threat to the delicate balance Opec+ has achieved, it’s that the market could overheat and prices rise too high.
The alliance has signalled it will stick with its schedule of modest production increases by approving another 400,000 barrel-a-day increment for November. But the market has shifted since that road map was agreed in July.
The shortage of natural gas, which has sent prices to the equivalent of $190 a barrel, is spurring a switch to oil products for heating and manufacturing, boosting overall demand. US oil production is still recovering from Hurricane Ida, which has knocked out a total of almost 35mn barrels after slamming the Gulf of Mexico a month ago – equivalent to almost two full months of Opec+ supply increases.
Anxiety among key consuming nations is palpable, especially if they end up experiencing a cold winter. China has instructed top energy firms to secure supplies at any cost. US President Joe Biden’s administration says it has reminded Opec of the need to support the recovery, and National Security Adviser Jake Sullivan met with Saudi Crown Prince Mohamed bin Salman last week.
“Opec will come under increasingly intense pressure from Washington to open the production release valve and cap the upside” in prices, said Helima Croft, chief commodities strategist at RBC Capital Markets. “An increase beyond the 400,000 barrels a day is a live option for Monday.”
That’s a view shared by the world’s largest independent trader, Vitol Group. Not only is demand being boosted by the shortage of natural gas, the supply outlook is tightening as prospects diminish for a swift deal to revive Iranian exports, said Chris Bake, the company’s head of origination.
Tehran and Washington have been involved in negotiations to reactivate a nuclear accord – and lift US sanctions on Iranian oil shipments – but the talks have so far made little headway. As a result, roughly 1.4mn barrels a day of Iranian crude that traders thought might be entering the market in late 2021 remains absent.
Some Opec+ delegates say privately that the increase approved at Monday’s meeting could be bigger than the scheduled 400,000 barrels a day. Scenarios for larger hikes have been considered, said one official.
Saudi Arabia doesn’t want to see prices spiral toward $100 a barrel, as excessive fuel costs would curtail demand and stimulate a revival in US shale output, according to people familiar with the kingdom’s thinking.
A spike in crude prices – just weeks before world leaders gather in Glasgow, Scotland, for a fresh round of climate talks intended to shift the world away from fossil fuels – could boost support for the transition to renewable energy.

While we already have mature technologies that can replace fossil fuels in many parts of our economy, there are areas where eliminating carbon pollution will be much more difficult. Steel, shipping, aviation, and trucking, for example, account for a combined 40% of our global carbon footprint and are on track to consume two times the remaining carbon budget for staying below 1.5C of warming.
Fortunately, “green” hydrogen – H2 produced through electrolysis using renewable energy – holds enormous promise for these sectors. Through various applications, this tiny molecule can provide the heat, reduction properties, fuel, and other services needed to replace fossil fuels. In fact, given the technical challenge of getting these “hard-to-abate” sectors to a state of carbon neutrality, hitting 2050 net-zero targets without it would be virtually impossible.
H2 uptake can serve other objectives beyond decarbonisation. For example, hydrogen’s ability to substitute for natural gas in many applications allows for a degree of energy independence and reduced reliance on liquefied natural gas or pipeline imports from Russia. And while renewables like solar and wind are limited by the extent of electrical grids, hydrogen can be transported by pipeline or potentially by ship. That means it could become an exportable renewable-energy source, eventually replacing petroleum as the main global energy commodity.
H2 uptake is starting from vastly differing points, depending on the market. In Europe and Southeast Asia, political and market incentives are already fully aligned for the deployment of H2 infrastructure. But in large oil- and gas-exporting economies, the incentives are often conflicting. Notably, there is significant misalignment in the United States, where natural gas fulfils all the political priorities that hydrogen can provide for other markets.
As a crucial element in achieving 2050 net-zero targets, hydrogen production, storage, and transport represents a multi-trillion-dollar opportunity, not only for energy incumbents but also for investors. While hydrogen is currently more expensive (per unit of energy delivered) than competing options such as fossil fuels, the scaling up of electrolyser production is driving down costs. Within the next decade, we can expect H2 to reach break-even points with fossil fuels across different applications, after which hydrogen uptake will bring cost savings.
Green hydrogen is particularly attractive for developing economies. There is a strong geographical overlap between countries and regions with the lowest production cost for renewable energy and those with lower per capita GDP. These countries thus could secure a global competitive advantage by becoming hydrogen producers and exporters. Doing so would also help them attract zero-carbon heavy industry, such as fertiliser manufacturing or hydrogen-based direct reduction steelmaking. And, of course, the development of these sectors would lead to significant job creation.
H2 is also attractive for wealthy industrialised countries, which currently lead the world in the manufacture of hydrogen electrolysers. However, if the recent history of the photovoltaic (solar panel) industry is any guide, wealthy countries may need stronger industrial policies to ensure that production does not migrate to China and other regions.
There is more work to do before hydrogen can realise its full decarbonisation potential. As matters stand, green hydrogen represents a very small portion of existing hydrogen production. Instead, most hydrogen is “gray,” because it is made using fossil fuels through a steam methane reforming (SMR) process. Though there is potential to capture and store some of the associated carbon dioxide emissions to make a slightly cleaner fossil-based “blue” hydrogen, this option would not be emissions-free. H2 therefore has a complex CO2 footprint, for now.
Furthermore, for hydrogen to deliver on its promise, the decarbonisation of electric grids must happen in parallel. But as with electric vehicles (EVs), we cannot wait for a 100% clean grid to begin deploying electrolysers; we must start now.
This is not as financially risky as it sounds. There will undeniably be a threshold where green hydrogen becomes the lowest-cost source of hydrogen generally. Notably, the US Department of Energy’s recently announced goal of reducing the cost of “clean hydrogen” to $1 per kilogram is nearly impossible to achieve with hydrogen produced through the SMR process at sustainable price levels for natural gas. That means US policy is already aligned behind green hydrogen.
Nonetheless, using green hydrogen to decarbonise heavy industry will demand a truly awesome amount of electricity. Producing the necessary volume of hydrogen would almost double total current global electricity generation. The only way to meet this demand is to build renewable energy even faster.
That, in turn, will lead to critical infrastructure-design questions, such as whether to prioritise H2 pipelines or power lines. And the growth of this sector will have many regulatory implications. To ensure a rapid build-out of hydrogen infrastructure, it will be important to enable monetisation, create rate structures to encourage capital-expenditure deferral, and provide system-wide planning across infrastructure types.
Equally, a move to H2 will accelerate the obsolescence of many fossil fuel-based assets. For these large volumes of stranded assets not to produce negative side effects, they will need to be repurposed or helped into early retirement with various financial incentives.
One high-potential area for repurposing infrastructure is in natural-gas pipeline networks, which, in some cases, can be retrofitted to allow for hydrogen transport. Some thermal power plants can also potentially be repurposed; but, here, the end-to-end efficiency of power-to-hydrogen-to-power is low, so the profitable use cases are limited. For the steel industry, the picture is grimmer, as existing blast furnace capacity may need to be replaced with direct reduction. Similarly, gasoline and diesel fuelling infrastructure will need to be replaced. But the future of such infrastructure is already in doubt, owing to the growing market for battery EVs.
Hydrogen brings enormous opportunities but also a daunting scaling challenge. Globally, the industry currently has the capacity to produce only around one gigawatt of hydrogen electrolysers each year, whereas, according to the International Energy Agency’s analysis on what a 1.5C pathway requires, green hydrogen production will need to grow 1,000-fold from today to 2030.
There are actions that can and must be taken to meet this challenge. First, we need policies to ensure stable demand at scale, so that electrolysis makers can leap-frog into industrialised manufacturing. Second, governments must provide subsidies to cover the initial “green premium” until learning-curve effects take over. And, finally, we must address the tension between current asset locations and the places with the lowest-cost clean-sheet footprint for decarbonised industries.
Backed by direct and indirect political priorities, hydrogen markets have already gained momentum and crossed the point of no return. As such, they are quickly bringing cleaner industry and a decarbonised economy within striking distance. – Project Syndicate

• Thomas Koch Blank is Senior Principal of Breakthrough Technologies at RMI.

LONDON, Oct 1 (Reuters) – Europe’s increasingly expensive gas and electricity prices are sending a strong signal to manufacturers to consider temporary plant closures and to home and office owners to turn down thermostats to conserve fuel this winter.

Front-month gas futures are now more than six times more expensive than at this point last year, as the region struggles to import enough gas to refill its depleted storage ahead of the winter peak heating season.

Regional storage sites are still only 74.7% full, the lowest for more than a decade, and compared with a pre-pandemic five-year seasonal average of 87.4%, according to Gas Infrastructure Europe.

In the short term, Europe is unlikely to attract significantly more gas because production is fixed and there is already a worldwide shortage, which is also pushing up prices in Northeast Asia and North America.

Rising prices will find the path of least-resistance to cut consumption – with the most price-sensitive and least politically sensitive customers forced to reduce gas and electricity use first and most deeply.

In theory, the crisis could be resolved easily by homes, offices, schools and factories turning down thermostats by 0.5-1.0 degrees this winter; the result would be an enormous fuel saving with only a minimal impact on comfort.

In practice, policymakers will be reluctant to call for thermostat reductions since it implies a policy failure and has unpopular associations with one-term U.S. President Jimmy Carter.

European governments are instead trying to shield residential and small business customers from the full force of increasing energy prices on utility bills through price caps, rebates and tax cuts.

But if the crisis continues to worsen, and especially if the winter proves colder than normal, shielding residential customers could prove unsustainable and calls for energy conservation may become inevitable.

In the meantime, policymakers are likely to explore other fuel saving measures, including reduced street-lighting and extended closures of government buildings, offices and schools over the mid-winter holiday period.

More significant savings could be made if manufacturers close their operations temporarily, cutting consumption and potentially reselling energy into the spot market if they have already contracted to buy it.

Steeply rising energy costs will force many manufacturers to reassess their production plans this winter, especially those with energy-intensive processes and/or limited ability to raise the price of their own products.

For manufacturers, short closures have the double benefit of cutting energy costs and also driving up the price of their products, helping protect margins against rising power and gas prices.

Once enough credible plant closures and other energy-saving measures are announced futures prices are likely to moderate.

Plant closures would, however, worsen problems throughout the supply chain and intensify the upward pressure on inflation, as well as disrupting long-standing customer relationships.

But unless the winter proves mild, price rises and physical shortages of gas, coal and electricity are unlikely to remain confined to energy markets, rippling out to the rest of the economy as is already happening in China.

BEIJING: Widening power shortages in China have halted production at numerous factories including many supplying Apple and Tesla, while some shops in the northeast operated by candlelight and malls shut early as the economic toll of the squeeze mounted.

China is in the grip of a power crunch as a shortage of coal supplies, toughening emissions standards and strong demand from manufacturers and industry have pushed coal prices to record highs and triggered widespread curbs on usage.

Rationing has been implemented during peak hours in many parts of northeastern China since last week, and residents of cities including Changchun said cuts were occurring sooner and lasting for longer, state media reported.

On Monday, State Grid Corp pledged to ensure basic power supply and avoid electricity cuts.

The power crunch has hurt production in industries across several regions of China and is dragging on the country’s economic growth outlook, analysts said.

The impact on homes and non-industrial users comes as night-time temperatures slip to near-freezing in China’s northernmost cities. The National Energy Administration (NEA) has told coal and natural gas firms to ensure sufficient energy supplies to keep homes warm during winter.

Liaoning province said power generation had declined significantly since July, and the supply gap widened to a “severe level” last week. It expanded power cuts from industrial firms to residential areas last week.

The city of Huludao told residents not to use high energy-consuming electronics like water heaters and microwave ovens during peak periods, and a resident of Harbin city in Heilon­gjiang province told Reuters that many shopping malls were closing earlier than usual at 4pm (0800 GMT).

Given the current power situation “the orderly use of electricity in Heilongjiang will continue for a period of time,” CCTV quoted the provincial economic planner as saying.

The power squeeze is unnerving Chinese stock markets at a time when the world’s second-largest economy is already showing signs of slowing. China’s economy is grappling with curbs on the property and tech sectors and concerns around the future of cash-strapped real estate giant China Evergrande.

Tight coal supplies, due in part to a pickup in industrial activity as the economy recovered from the pandemic, and toughening emission standards have driven the power shortages across the country.

China has vowed to cut energy intensity — the amount of energy consumed per unit of economic growth — by around 3% in 2021 to meet its climate goals. Provincial authorities have also stepped up the enforcement of emissions curbs in recent months after only 10 of 30 mainland regions managed to achieve their energy goals in the first half of the year.

Published in Dawn, September 28th, 2021

* Bangladesh pays nearly $30/mmBtu for prompt cargo – sources

* China and Turkey seek cargoes for winter

* Cameron LNG says Louisiana plant unit to return online this week

SINGAPORE, Sept 24 (Reuters) – Asian liquefied natural gas (LNG) prices surged by about 10% this week as demand continues to rise in the region despite higher prices and amid a supply crunch.

The average LNG price for November delivery into Northeast Asia LNG-AS was estimated at about $26.50 to $27 per metric million British thermal units (mmBtu), up at least $2 from the previous week, industry sources said.

“The post-COVID recovery in some places has been fast, which is pushing up demand, while there are some supply issues in several places, which is causing a crunch,” a Singapore-based trader said, adding that prices are expected to rise even higher during winter when demand for heating peaks.

Bangladesh, for instance, bought a cargo for delivery in late September from Vitol at $29.89 per mmBtu, the highest the country has paid for the super-chilled fuel, three industry sources said.

It did not award a separate tender seeking a cargo for October delivery as the offer was at around $35, two other sources said. Instead, it will issue two tenders next week to buy two cargoes for delivery in October, a third source said.

Demand from China was also firm with Unipec Singapore, the trading arm of Sinopec, seeking 11 cargoes for delivery in winter while Beijing Gas and Guangzhou gas also sought a cargo each for delivery in October and November, traders said.

Turkish state energy company Botas is also seeking 20 cargoes for delivery in winter, while Thailand’s Egat was seeking two cargoes for delivery in October, they added.

Some spot cargoes were offered in the market from Angola, Australia, Russia and Indonesia from October to January, but lower shipments from Egypt and Malaysia were supporting prices, traders said.

Cameron LNG in the U.S. said on Wednesday the liquefaction train shut for maintenance at its Louisiana export plant was expected to return later this week, which could add some supply. (Reporting by Jessica Jaganathan. Editing by David Evans)

DUBAI/LONDON, Sept 21 (Reuters) – Energy executives gathered in Dubai on Tuesday for the first time since the COVID-19 pandemic started, but despite being upbeat on economic recovery, they were concerned about another headwind: a global gas price spike.

Natural gas prices have soared by around 280% in Europe this year and by more than 100% in the United States, pushing up winter fuel bills, and exacerbating a near-term spike in inflation in another blow to a world economy as it recovers from the coronavirus crisis.

Low storage inventories, high demand for gas in Asia, less Russian and liquefied natural gas (LNG) supply to Europe than usual, high carbon prices and outages have led to the spike and analysts expect prices to remain elevated until 2022 or even 2023. read more

At the Gastech industry conference, energy executives were concerned about the “sweet spot” of prices acceptable for customers and still high enough to incentivise investments, while others warned of shortfalls in the event of a severe upcoming winter.

The chief executive of Malaysia’s state energy firm Petronas (PETRA.UL) said that a gas price of $7-$8/mmBtu could be a “sweet spot” for customers and allow infrastructure investments to continue.

“Natural gas needs to be embraced as a transition fuel. A decarbonised future does not mean a hydrocarbon-free future,” Tengku Muhammad Taufik said.

Meanwhile, OPEC Secretary General Mohammed Barkindo blamed high prices on the shift to renewable energy sources.

The average LNG price for November delivery into Northeast Asia was estimated at about $24-$25 per metric million British thermal units (mmBtu) last week, while benchmark European natural gas prices have surged to around $25/mmBtu from around $6-7/mmBtu at the start of the year.

BURDEN BUT ‘NOT A CRISIS’

Qatar’s energy minister said he believes high gas prices reflect a lack of investment, as well as a shortage of supply, but stopped short of calling the situation a crisis.

“I don’t think it is a crisis (yet). Unfortunately, in my view, this (price spike) is due to the market not investing enough in the industry,” said Saad al-Kaabi, Qatar’s energy minister and the CEO of state-owned Qatar Petroleum (QATPE.UL), the world’s top liquefied natural gas (LNG) supplier.

“We don’t want these high prices: we don’t think it is good for consumers. We don’t want $2 and we don’t want $20, we want to have a reasonable price that is sustainable.”

United Arab Emirates energy minister, Suhail al-Mazrouei, said current prices could be a burden on many countries.

He too blamed the spike on a slowed pace of investments in gas, adding that gas prices were not sustainable at a level of $2 or $3 either.

“New investments need to be there, we are talking about investments to the north of a trillion dollars to satisfy (demand) requirements for the years to come,” Mazrouei said.

“I am afraid it is not going to be magical…we will go through ups and downs until the market realises the right price,” he added.

Some countries have agreed to reduce emissions to net zero by 2050 or earlier, meaning a shift away from fossil fuels, but many energy officials said consumers will pay the price.

The Qatari energy minister said the “euphoria around energy transition” was pressuring companies not to invest in gas or oil projects, while his Emirate counterpart called for honest, practical plans.

“There is a drive for being emotional about net-zero carbon emissions, but I think we need to be honest with the consumers and tell them what is going to be the cost associated with net zero,” UAE’s Mazrouie said.

Analysts at WoodMackenzie said separately on Tuesday that the economics of existing gas operators are difficult and new-buld can present a substantial and unattractive risk, particularly in climate-wary Europe.

For French energy group Engie (ENGIE.PA), the price spike was “not good news” and the company’s deputy chief executive, Didier Holleaux, said he was worried that current gas prices may continue for foreseeable future with gas storage levels not as high as usual for this time of year.

“Hopefully the start of the winter will not be so cold in the north hemisphere. If not, we are in trouble. Forecasts for temperatures in three months’ time are just the worst.”

(This story was refiled to remove reference to event being held in hotel in lede)

Hezbollah has imported fuel from Iran to supply Lebanon, while the US wants to power Lebanon with Egyptian gas and Jordanian electricity. The energy race between the geopolitical rivals has implications for the region.

Lebanon has been mired in economic crisis since 2019. Recently, a severe fuel crisis has gripped the country and has exacerbated the situation considerably.

The fuel shortages hit so hard that a fuel crisis soon became a humanitarian crisis. Lebanese citizens found themselves lining up for hours at petrol stations to receive limited rations of fuel, the price of which has skyrocketed.

Generators, starved of diesel, provided fewer hours of electricity to houses and businesses. Even hospitals were deprived of power.

With the government struggling to manage the crisis, Hassan Nasrallah, the political leader of the Iran-backed Shiite militant group Hezbollah, announced in August that Iranian fuel would be brought into Lebanon.

The first two shipments arrived via Syria on September 16 and 17. Several videos and pictures posted on social media showed people celebrating the arrival of the fuel convoys. A third shipment is expected to arrive this week.

The delivery was not officially approved by the government. The trucks entered via an illegal crossing which violates US sanctions against Iran. So far, the US has not tried to block the shipments.

US counterproposal to contain Iran’s influence

The US didn’t sit back. Following Nasrallah’s announcement, the US ambassador to Lebanon, Dorothy Shea, revealed that the United States was working closely with the governments of Egypt, Jordan and Lebanon, along with the World Bank, to find sustainable solutions for Lebanon’s fuel and energy needs.

On September 8, the US-backed effort to satisfy Lebanon’s energy needs took place in Amman, Jordan, where ministries from Egypt, Jordan, Lebanon and Syria outlined a road map to pipe Egyptian natural gas to Lebanon via Jordan and Syria through the Arab Gas Pipeline (AGP). Another part of the plan involves providing electric power to Lebanon from the Jordanian grid.

Although the US proposals would not alone be enough to satisfy market demand, Roudi Baroudi, chief executive of the consultancy Energy and Environment Holding, told DW that the proposals were good ideas as they could increase the supply of electricity to the country.

He explained that, though the AGP is ready for use, the electric cables passing through Damascus were heavily damaged during the Syrian civil war and needed to be repaired. “The gas from Egypt will be sufficient for 8-10 hours per day. Electricity from Jordan and Syria would add 2-3 hours,” he said.

Iran’s new foreign affairs policy and Syria’s comeback

Technical issues apart, the competition between the US and Iran to help Lebanon in the energy sector has wider implications for the region.

In Lebanon, the Iranian fuel shipment cemented Hezbollah’s powerful image. The new Lebanese Prime Minister Najib Mikati said Iranian fuel imports constituted a breach of Lebanon’s sovereignty, but he didn’t follow with any actions.

For Iran, shipping fuel to Lebanon is a sign of a new vision of its foreign policy, according to Sina Toossi, a senior research analyst at the National Iranian American Council (NIAC). He told DW that Iran wanted to become a regional power and neutralize the effects of imposed sanctions by increasing trades with its neighbors.

“New Iranian President Ebrahim Raisi’s foreign policy strategy focuses on the region and increasing regional economic interconnectivity and interdependence. However, if the US doesn’t enforce sanctions, it may be a sign that Biden has a good intention to get the nuclear deal talks with Iran back on track,” he said.

Conversely, the United States is trying to contain Iran’s influence in the region by backing the proposals to provide natural gas and electricity to Lebanon. However, it found itself in an awkward situation. By involving Syria in the plan, which already expressed its availability, the US would break its own sanctions imposed on Bashar Assad’s government through the 2019 Caesar Syria Civilian Protection Act.

Chris Abi-Nassif, Lebanon program director at the Middle East Institute, told DW that the involvement of Assad’s government in the plan might be perceived as the US reaching out to Syria.

“Syria, which had effectively been taken out of the Arab world equation, has been suddenly put back in the picture,” he said. Furthermore, Syria may take not only a political advantage by letting gas and electricity pass through its territory but also profits, according to Abi-Nassif.

Fueling Lebanon doesn’t solve the crisis

Lebanon has had an issue in the energy sector since the end of the civil war in 1990. For decades, the political class has developed no long-term plans in the energy sector to satisfy market demand.

The Iran-Hezbollah initiative to supply fuel won’t be enough to satisfy the country’s demand for a long time, although Lebanese may breathe a sigh of relief in the immediate term.

Meanwhile, the US proposals are still being negotiated. It may take several months before they make any difference.

Those proposals may relieve the crisis, but it won’t resolve the issue of paying for gas and electricity, according to Abi-Nassif.

“The fundamental question is how Lebanon will pay for natural gas and electricity, ” he said. “To answer this question, Lebanon should focus on how to settle the debt crisis, restructure the banking system, and how to distribute losses. This is the key to unlock the long-term prospect not only for the energy sector but for any other single sector in Lebanon as well.”