The long-feared war between Israel and Iran is now fully under way, and the repercussions threaten to include significant disruptions – not just for the two belligerents, but also for economies, peoples, and governments around the world.

To understand how and why an armed conflict between two regional powers could have such a widespread impact, start by considering the following:

1. Iran’s reserves of crude oil and natural gas are, respectively, the second- and third-largest in the world;

2. While Israel has posited Iran’s alleged nuclear activities as its reason for going to war, its strikes have also focused on Iran’s oil and gas infrastructure;

3. At the time of this writing, five of Iran’s nine major oil refineries had been hit and knocked out of service, along with storage depots and other facilities;

4. Israeli forces also started a huge fire at the South Pars gas field, which Iran shares with Qatar – and which holds almost as much gas as all of the other known gas fields on Earth.

5. For good measure, Iranian strikes against the Israeli refinery complex at Haifa have led to the shutdown of several offshore platforms, further crimping regional hydrocarbon output;

Now consider that it gets worse. The destruction or shutdown of Iran’s ability to extract, process, distribute, and export hydrocarbons would cause tremendous problems at home, and put upward pressure on prices everywhere, although the global impact would likely be manageable. The situation would be far more disruptive if Israeli attacks hit Bandar Abbas area. That could cause prices for gas – and other forms of energy – to soar on world markets.

And yet even this is not the greatest peril threatened by this war. That desultory honour goes to the possibility that traffic could be disrupted in the Strait of Hormuz, the relatively narrow channel that connects the Gulf to the open ocean. The passage is only 40 kilometres at its narrowest spot, wending for over 150 kilometres between Oman and the United Arab Emirates, to the west and south, and Iran’s Hormozgan Province to the east and north. Hormozgan is also home to the famous port city of Bandar Abbas, which hosts a giant oil and petrochemical complex that has already been struck at least once by Israeli forces.

What really matters for our purposes is that Hormuz also connects several other of the world’s most prolific oil and LNG producers – including Iraq, Kuwait, Qatar, and Saudi Arabia – to their overseas clients. As a result, every day, about a quarter of the world’s crude oil and LNG requirements exit the Gulf through Hormuz, making it the most strategically important chokepoint of our times. If this flow were halted or even significantly slowed, the consequences could be disastrous for much of the world. Although most of these exports are typically bound for markets in Asia, even a brief reduction in available oil and gas could send crude prices, currently a little more than $70 a barrel, shooting past $100 or even $120 in short order.

If such a supply crisis lasted any length of time, the global economy would enter uncharted territory. Not only would sky-high energy prices cause inflation to rise across the board, but fuel shortages could also be expected to cripple businesses of every size and sort. Transport and manufacturing, food processing and medical research, power generation, household heating and cooling, even the Internet itself: everything that depends on energy could slow to a trickle. A global recession would almost certainly ensue, and given the current trade environment, that might lead to another Great Depression.

So what might cause such an interruption? There are several possibilities, including the accidental sinking or crippling of a supertanker or two in just the right (i.e., wrong) place(s). Even if one or more accidents did not make Hormuz physically impassable, they could make insurance rates prohibitively expensive, causing many would-be off-loaders to decide against hazarding their ships amid the crossfire. Alternatively, Iran could decide to close the strait in order to punish the “international community” in general, for not doing enough to rein in the Israelis.

Whatever the rationale, the potential for global economic ruin – not to mention the ecological and public health risks posed by leaks of oil, nuclear materials, and/or other toxins into the environment – is simply not a risk that most intelligent people want to run. It therefore behooves those with the power to change the situation to do everything they can to end the conflict before its costs become more than a fragile world economy can bear.

Another is how to get Iran to behave itself, and that, too, shapes up as a difficult task. The Islamic Republic has spent most of the past half-century seeking to undermine US and Israeli influence over the region, and its substantial investments in proxy militias abroad and its own military at home may be skewing high-level decision-making. As the saying goes, when all you have is hammer, everything starts to look like a nail.

Despite these obstacles, it remains a fact that war is almost never preferable to negotiation. Iran and Israel agree on very little, their objectives are often in direct opposition to one another, and each views the other as a murderous and illegitimate state. Nonetheless, whether they realise it or not, both sides have a vested interest in ending the current conflict. Given the massive disparities in their respective strengths and weaknesses, this conflict could turn into a long-term bloodletting in which the value of anything achieved will be far outstripped by the cost in blood and treasure.

But who will get the two sides to so much as consider diplomacy when both of them are increasingly committed to confrontation? Although several world leaders have offered to act as mediators, the belligerents don’t trust very many of the same people. To my mind, this opens a door for Qatar, which has worked assiduously to maintain relations with all parties – and which already has a highly impressive record as a peacemaker – to step up in some capacity.

Whether it provides a venue for direct talks, a diplomatic backchannel for exchanging messages, or some other method, Doha has proved before that it can be a stable platform and a powerful advocate for peaceful negotiations. Let us hope it can do so again.

• Roudi Baroudi is a four-decade veteran of the oil and gas industry who currently serves as CEO of Energy and Environment Holding, an independent consultancy based in Doha.

The problem of maritime plastic-waste pollution first became apparent in the 1970s. In the half-century since then, the problem has become ever more widespread, as scientific expeditions conducted by the Tara Ocean Foundation (of which I am executive director) have shown. Large pieces of debris, such as fishing nets, and their disastrous effects on marine life, are the most visible symptom. Such waste is estimated to kill more than one million seabirds and over 100,000 marine mammals annually, often through entanglement or suffocation, and promotes transport of invasive species, triggering a cascading effect on the ecosystems in which they play a central role.

Less visible, but more pervasive, are microplastics, which have been found in the deepest ocean trenches and all types of marine life. Microplastics can, among other things, modify bacterial and viral communities and disperse chemical toxins in food chains (often after being ingested by marine organisms). Some of these toxins, such as phthalates, are associated with the chemistry of plastics, while others, such as pesticides and heavy metals, are absorbed by the plastic before it reaches the ocean and enters the food chain.

How these toxic substances interact with plastics has been the subject of much study. Plastic is comprised of monomers that have been chemically bonded to form long chains of polymers – ethylene, styrene, and propylene become polyethylene, polystyrene, and polypropylene. But the process of polymerisation is often imperfect, and some of the unpolymerised monomers that remain in plastic, like different types of styrene and bisphenol, pose major environmental and health risks.

Moreover, other chemical additives, including plasticisers, fillers, colorants, flame retardants, and antioxidants, are incorporated into polymer formulations to modify their properties. And non-intentionally added substances (NIAS) – impurities, raw materials used in manufacturing, byproducts, and degradation products – bind to finished plastics. In most cases, because free monomers, additives, and NIAS are simply trapped within the tangle of polymer chains, rather than being chemically bound to them, they are more likely to leach out during the production, use, and disposal of plastic, migrating into liquids, gases, and solids. Some 16,000 such molecules have been identified, but their effects are still not fully known, nor is their toxicity, which can change depending on how they are combined. What we do know is that one-quarter of these 16,000 molecules are pose a hazard to human health or the environment by disrupting biochemical processes in living organisms.

Halting the flow of microplastics and toxic pollutants into the world’s bodies of water is a Sisyphean task. Nevertheless, scientists are trying to stem the problem. For example, the Tara Europa expedition, in coordination with the European Molecular Biology Laboratory and more than 70 scientific institutions across the continent, has spent the past two years investigating how these hazardous substances make their way into the seas and oceans bordering Europe. The mission plans to share its findings soon.

But the generation of toxic waste and debris is not the only way that plastic can harm ocean health. The plastics industry has been a major driver of climate change, accounting for an estimated 3.4% of global greenhouse-gas (GHG) emissions. Plastic production is on track to contribute 15% of GHG emissions by 2050, exacerbating global warming and thereby increasing the threats to marine life, which is sensitive to rising water temperatures.

Because plastic degrades the entire biosphere, not just the ocean, it is not a waste problem that can be solved by a few sustainability-minded citizens’ recycling efforts. This is a systemic crisis that requires an economy-wide solution. A better approach is to understand plastic as one of the “new entities” that must not leak into the environment, a view initially formulated by the Stockholm Resilience Centre in its work on planetary boundaries and later endorsed by the United Nations. While acknowledging the impossibility of defining a precise threshold for harm, such an approach highlights the need for a drastic reduction in plastic use.

Research suggests that it would be economically feasible to halve global plastic production at a cost which would almost surely be less than the cost of inaction. But, according to a recent study by researchers at the University of California, Berkeley, even this reduction would not be enough to limit global warming to 1.5° Celsius above preindustrial levels, the target set by the Paris climate agreement. Instead, they found that meeting this goal would require a 75% reduction in plastic production compared to 2015.

ZOUK MOSBEH, 23-04-2025: Energy expert Roudi Baroudi signed copies of his latest book during a launch event at Notre Dame University – Louaize on Wednesday.

The book, “Settling Maritime Boundaries in the Eastern Mediterranean: Who Will Be Next?”, is part of Baroudi’s years-long effort to promote regional energy cooperation. In it, the author makes the case that if East Med countries are serious about exploiting their offshore hydrocarbons, they need to settle their maritime borders in order to attract the major energy companies whose technical and financial muscle are virtual prerequisites for undersea oil and gas activities.

Co-hosted by the Office of NDU Publications (which published the book) and the university’s Office of Research and Graduate Studies, the signing event took place at NDU’s Pierre Abou Khater Auditorium. All proceeds from sales of the book will go toward Student Financial Aid at NDU.

Inspired by the landmark US-brokered October 2022 agreement that saw Lebanon settle most of its maritime boundary with old foe Israel, the new tome stresses the need to define other East Med borders as well, including those between Lebanon and Cyprus, Lebanon and Syria, Syria and Cyprus, Cyprus and Turkey, and Turkey and Greece.

Publication was delayed by the outbreak of the Gaza war in October 2023, but the author says that conflict – which also led to massive destruction and loss of life in Lebanon – only underlines the need for regional players to find a new modus vivendi.

“We can’t keep doing the same things over and over again, and then expecting a different outcome,” Baroudi said during the NDU event. “For the first time in many years, all of Lebanon’s branches of government – Parliament, Cabinet, and Presidency – are fully functional. We have to start thinking of ways to reduce the scope for friction, to open the way for foreign investment, and hopefully start producing offshore gas.”

“Almost all of Lebanon’s energy needs are met by imported hydrocarbons; imagine if we discover enough gas to provide 24/7 electricity to all Lebanese,” he added. “And what if we had enough to start exporting it, too? Lebanon’s coast is less than 100 kilometers from Cypriot waters: this means that once the island and its partners have built a pipeline and/or a liquified natural gas plant, Lebanese gas could flow straight into the entire European Union, one of the world’s largest energy markets. The possibilities are endless. And now imagine all of the countries of the region having similar prospects – just because they finally got around to figuring out where their national waters begin and end.”

In addition to the manifold benefits of energy security and lucrative export revenues to fund domestic investment in things like education, healthcare, fighting poverty, and transport, Baroudi said the exercise of negotiating sea borders could help build trust and good will.

“There isn’t enough of those commodities in the East Med region, and often for good reason,” he explained. “But we have to start somewhere, and maritime boundaries are a great place to do that because they open the way for investment and various forms of cooperation, direct or indirect, including fisheries monitoring and regulation, marine protected areas, tourism, weather forecasting, search and rescue, etc.”

With more than 47 years of experience, Baroudi has worked in multiple fields, from electricity, oil and gas, and petrochemicals to pipelines, renewables, and carbon pricing mechanisms. He also has led policy and program development with, among others, the World Bank, the US Agency for International Development, the International Monetary Fund, and the European Commission. The author of several books – including “Climate and Energy in the Mediterranean: What the Blue Economy Means for a Greener Future” (2022) – as well as numerous studies and countless articles, his expertise has made him a highly sought-after speaker at regional energy and economic conferences. Currently serving as CEO of Energy and Environment Holding, an independent consultancy based in Doha, he is also a Senior Fellow of the Transatlantic Leadership Network, a Washington think-tank. In 2023, he received the TLN’s Leadership Award in recognition of his efforts to promote peace.

Recent weeks have been multiple contacts among several countries including – Cyprus, Greece, Lebanon, and Syria – aimed at increasing cooperation among East Mediterranean countries.

This flurry of diplomatic activity provides the perfect backdrop as Notre-Dame University – Louaize is pleased to announce that it will host a book launch and signing on April 23rd, welcoming international energy expert Roudi Baroudi as he releases his latest work, “Settling Maritime Boundaries in the Eastern Mediterranean: Who Will Be Next? ”

The book outlines the need for countries in the region to resolve their maritime boundaries, the energy and other economic opportunities that doing so could open up, and the legal, scientific, and technical means of ensuring that delimitation is fair and equitable. The volume even carries exclusive, high-precision maps indicating with unprecedented accuracy where the negotiated or adjudicated sea borders of several East Med countries would be, as per United Nations rules.

The book emphasizes that settling these unresolved boundaries – including those between Lebanon and Cyprus, Lebanon and Syria, Greece and Turkey, Turkey and Syria, Syria and Cyprus, and Turkey and Cyprus – is a necessary first step for those seeking to develop offshore energy resources. The advent of energy security and possible lucrative exports could have a profound effect on several states, allowing them to make historic investments in schools, hospitals, and transport infrastructure, all while creating well-paying jobs and reducing poverty and inequality. Baroudi also highlights a series of cross-border benefits, including reducing potential irritants between neighbors, building trust, and opening up new avenues for cooperation.

As a 47-year veteran of the energy industry, Baroudi has a wealth of experience to share, and does so frequently as an author and speaker, promoting energy as a catalyst for dialogue and peace wherever and whenever he can. He will be on hand for the launch at NDU’s Pierre Abou Khater Auditorium beginning at 12:00 noon, answering questions and signing copies of the book for anyone who purchases one.

All sale proceeds will go toward Student Financial Aid at NDU.

The European Union’s plan to achieve net-zero emissions by 2050 has an Achilles’ heel: the EU relies on external sources – particularly Chinese companies – for 70-90% of the massive amount of critical raw materials needed to manufacture wind turbines, solar cells, batteries, and other green technologies. This dependency poses a serious risk: China’s recent ban on exports of gallium, germanium, antimony, and other dual-use materials to the US suggests that it could take similar action against Europe, especially in light of EU tariffs on Chinese electric vehicles.

The new European Commission has rightly put critical raw materials at the top of its agenda. Fortunately, it will not be starting from scratch. Last year, the EU adopted the Critical Raw Materials Act, which calls for the bloc to extract 10%, process 40%, and recycle 25% of what it consumes annually by 2030, and limits the share of any external supplier to 65%. To meet the CRMA’s targets, the Commission must focus on co-ordinating funding, engaging in resource diplomacy with Africa, and establishing secondary material partnerships.

Mining is a capital-intensive industry, and overseas upstream activities require public support in terms of both equity and debt. The CRMA anticipates mobilising finance from various sources, including the EU’s Global Gateway initiative and the European Investment Bank. Some member states have also established their own national funds. Germany launched a €1bn ($1.04bn) raw-materials fund, while Italy introduced a €1bn “Made in Italy” fund for critical minerals, and France dedicated €500mn under its 2030 investment plan to enhance domestic industry’s resilience to disruptions of the metal supply chain.

But while several public-finance streams are available, the funding landscape is scattered and not well aligned, creating confusion. Moreover, there are no explicit rules governing how the Critical Raw Materials Board, which was established to support the CRMA’s implementation, designates projects as “strategic” and thus eligible to receive EU funds. The European Commission can address these issues by streamlining existing funding lines, which would ensure that national and EU finance work in tandem to achieve the best results and scale, and by establishing timelines for decision-making, which would provide clarity for corporate investment in upstream, midstream, and downstream assets.

The CRMA must also establish partnerships with resource-rich countries that deliver quick and tangible results. Bolstering ties with African countries, which hold some 30% of the world’s mineral resources, will be especially important. But, compared to other regions, investment in mineral exploration on the continent remains low, and China funds most of it. The EU’s resource diplomacy should focus on lowering investment barriers while helping African partners move into higher-value-added activities, such as downstream processing, and invest in industrial upgrading.

AfricaMaVal, an EU-funded project promoting sustainable partnerships and responsible mining on the continent, should become a vehicle for linking European and African firms and addressing extraction needs. Building on comprehensive assessments of mining prospects across Africa, and taking into account the STEM (science, technology, engineering, and mathematics) skills of local workforces, AfricaMaVal can identify new business opportunities along the value chain. This could evolve into a joint investment platform for the sustainable production of critical raw materials. The European Commission would thus be doing what it does best: catalysing private investment toward its policy goals, which, in this case, is building the infrastructure and clean-energy systems required for future mining projects.
Lastly, the Commission should address the CRMA’s major blind spot: the lack of domestic feedstock to meet its recycling targets. Global competition for secondary materials is already stiff, as evidenced by businesses’ increasing efforts to secure enough steel scrap. Recycling input rates – the share of total demand – are just 3% for light rare-earth elements and zero for battery-grade lithium.

Establishing secondary-materials partnerships with emerging economies, which have rapidly growing markets for cell phones, laptops, and other appliances, would boost the EU’s supply of recycled critical raw materials, particularly rare-earth elements. The focus should be on optimising the recycling value chain by providing financing and capacity-building assistance for waste-sorting and collection systems in partner countries, creating mutually beneficial economic and environmental outcomes.

The EU is facing an uphill battle to source and produce the critical raw materials that will define its future. And while the CRMA hardly represents an easy fix for the bloc’s import dependency, it can strengthen supply-chain resilience, contribute to EU sovereignty, and bolster Europe’s economic security – in other words, boost the bloc’s industrial competitiveness against a worsening geopolitical backdrop. But to realise the CRMA’s full potential, the Commission must make it fit for purpose. – Project Syndicate

• Rüya Perincek, a policy fellow at the Willy Brandt School of Public Policy at the University of Erfurt, is an adjunct senior fellow at the Global Centre for Mineral Security. Andreas Goldthau is Director of the Willy Brandt School of Public Policy at the University of Erfurt.

The biggest news in the energy industry last week was that a state-owned Chinese company had completed a massive offshore oil and gas platform for Saudi Aramco. Breathless media reports shared impressive details about the facility’s record-setting size, weight, and output capacity, with some describing it as a massive bet on continuing strong demand for fossil fuels despite the meteoric rise of renewables.

The real significance of this news, though, is not to be found at the Qingdao shipyard where it was made, at the headquarters of the China Offshore Oil Engineering Company that built it, or at the Marjan field off Saudi Arabia’s east coast where it will be installed and operated.

In fact, in order to truly appreciate the implications involved, one needs to travel back in time a little more than 50 years. For on 8 June 1974, the United States and Saudi Arabia reached a historic agreement that has bound the two countries ever since.

Signed by then-US Secretary of State Henry Kissinger and then-Minister of Interior Prince Fahd bin Abdulaziz, the pact established two joint commissions tasked, respectively, with increasing bilateral economic cooperation and with determining the kingdom’s military needs. It also created several joint working groups responsible for specific elements to support growth and development, including efforts to: a) expand and diversify Saudi Arabia’s industrial base, beginning with the manufacture of fertilizers and other aspects of the petrochemical sector; b) increase the number of qualified scientists and technicians available to make the most of technology transfers; c) explore partnerships in areas like solar energy and desalination; and d) find ways to cooperate in agriculture, especially in the desert.

Henry Kissinger with Prince Fahd of Saudi Arabia, 1974

Contrary to widespread misperceptions, the agreement did not say anything about Saudi crude being priced and/or transacted exclusively in US dollars. In a side-deal that remained secret until 2016, however, the United States pledged full military support in virtually all circumstances and the Kingdom of Saudi Arabia committed to investing a massive share of its oil revenues in US Treasury bills. While there was no public quid pro quo, therefore, this was to some extent a distinction without a difference: the world’s biggest oil exporter ended up spending hundreds of billions of dollars on American debt and American-made weapons, making it only sensible that the vast majority of its crude sales would be in greenbacks. By extension, the sheer weight of Saudi oil in world markets – and especially within the Organization of Petroleum Exporting Countries – virtually guaranteed that the dollar would become the de facto default currency of those markets, Petrodollars.

These arrangements suited both sides at the time, which featured a very particular set of circumstances. The previous year, as Egypt and Syria attempted to regain territories occupied by Israeli forces since the 1967 war, US President Richard Nixon authorized an unprecedented airlift of weaponry – everything from tanks, artillery, and ammunition to helicopters, radars, and air-to-air missiles – to Israel. Arab oil producers responded by playing their strongest card, announcing an oil embargo against states that supported the Israeli war effort. That led directly to supply shortages, soaring prices, and long lines at filling stations across the United States and many other countries, too, and indirectly to several years of higher inflation. Although the embargo had been lifted in March 1974, Washington was keen to prevent similar shocks in the future.

The American economy was particularly vulnerable to longer-term repercussions because of several factors, including a general slowdown caused by its long, expensive, and ultimately unsuccessful war in Vietnam. The real problem, though, stemmed from another issue: in 1971, as the dollar continued to lose ground against major European currencies, Nixon had taken the United States off the gold standard, gutting the Bretton Woods arrangements put in place after World War II and throwing foreign exchange markets into disarray. With the Cold War as backdrop, America appeared to be losing ground in its strategic competition with the Soviet Union.

The so-called “side-deal”, then, was actually far more important than the public agreement because it would restore the dollar’s primacy in international markets, making it once again the world’s favorite reserve currency, while simultaneously reducing the likelihood of future Arab oil embargos. The new system worked very well for a very long time: the US economy regained its stability, and Saudi Arabia embarked on a long program of socioeconomic development that continues to this day. Even as the Americans have sought further protection by reducing their reliance on Saudi and other OPEC crude, their bilateral partnership and the dollar’s general prevalence in the oil business have likewise persisted despite all manner of diplomatic spats, crises, and other obstacles.

Back in the present-day, the Soviet Union is no more, and although the United States has an even more formidable strategic rival in China, this competition carries neither the day-to-day intensity nor the seeming inevitability of nuclear Armageddon that the Cold War engendered. In addition, the United States is now producing more crude oil than any country ever has, further insulating its economy against exogenous shocks, while China’s rapid expansion has made it the world’s most prolific energy importer. In fact, Washington is years into a “pivot to Asia” that will see it focus less attention on the Middle East.

Meanwhile, Saudi Arabia is now led by Crown Prince, Mohammed bin Salman (MBS), a young and highly ambitious ruler who has shown himself more than willing to act independently of American desires or even demands. Accordingly, it should not surprise anyone that the behemoth facility now being transported to Marjan is just the most visible tip of the Sino-Saudi iceberg. Theirs is a burgeoning relationship driven by complementary needs, with both parties investing in one another’s economies and cooperating on large-scale energy and industrial projects.

Given all of the foregoing, it is much too early to declare the end of an era. Even if rumors that the Saudis will soon start selling oil futures contracts in yuan or other currencies turn out to be true and the results include an erosion of the dollar’s value, the US-Saudi economic relationship remains very much in place, as do defense ties ranging from procurement and maintenance to joint exercises and training. This is not to mention the approximately 60,000 Saudi students who study at American universities every year, or the countless other business and/or personal ties nurtured over decades.

Then, US President, Jimmy Carter receiving the Crown Prince Fahd of Saudi Arabia at the White House in Washington, 1977. Seeing the continuation of the Petrodollar Agreement.

All the same, a new era has definitely begun: just as the Americans have opened up other avenues to secure their energy needs, the Saudis are now moving decisively to diversify their foreign partnerships and have been doing so for many years. Inevitably, the global oil and gas economy’s center of gravity will shift eastward, but how could it be otherwise when China and several other Asian economies have become such powerhouses? The diversification path will almost certainly include occasional stretches where Riyadh will have to make difficult decisions, but this, too, reflects the confidence that MBS has in his country’s ability to determine its own destiny.

Roudi Baroudi has worked in the energy sector for more than four decades, with extensive experience in both the public and private sectors. Having advised dozens of companies, governments, and multilateral institutions on program and policy development. He has been a loyal advocate for energy stability and peace. He is also the author or co-author of numerous books and articles, and currently serves as CEO of Energy and Environment Holding, an independent consultancy based in Doha, Qatar.

ATHENS, July 7, 2024 Greece: Energy and Environment Minister Theodoros Skylakakis is on the right track with his approach to Greece’s energy transition plans, a noted regional expert says.

“He’s got the right perspective,” industry veteran and author Roudi Baroudi said after Skylakakis spoke at this week’s Athens Energy Summit. “He understands that although the responsibility to reduce carbon emissions is universal, the best policy decisions don’t come in ‘one-size-fits-all’.”

Baroudi, who has more than four decades in the field and currently serves as CEO of Doha independent consultancy Energy and Environment Holding, made his comments on the sidelines of the forum, where he also was a speaker.

In his remarks, Skylakakis expressed confidence that Greece’s increasing need to store electricity – as intermittent renewables generate a growing share of electricity – would drive sufficient investment in battery capacity, without the need for subsidies. Among other comments, he also stressed the need for European Union policymakers to account for the fact that member-states currently face the cost s of both limiting future climate change AND mitigating the impacts that are already under way.

“Every country is different in terms of how it can best fight climate change. Each one has its own set of natural resources, industrial capacity, financial wherewithal, and other variables. What works in one situation might be a terrible idea elsewhere. That’s crucial and Skylakakis gets it,” Baroudi said. “He also understands that an effective transition depends on carefully considered policies, policies that attract investment to where it can not only have the greatest impact today, but also maximizes the impact of tomorrow’s technologies and tomorrow’s partnerships.”

“What Skylakakis is saying and doing fits in nicely with many of the same ideas I spoke about,” Baroudi added. “When he talks about heavier reliance on wind farms, the added storage capacity is a foundation that will help derive a fuller return from each and every turbine. When he highlights the utility – pun intended – of power and gas interconnections with other countries and regions, these are the prerequisites for peace, the building blocks for cooperation and dialogue.”

In his own speech shortly after Skylakakis’, Baroudi told the audience at the capital’s Hotel Grande Bretagne that countries in the Eastern Mediterranean should work together to increase cleaner energy production and reduce regional tensions.

“Surely there is a method by which we can re-establish the same common ground enshrined in the wake of World Wars I and II, recall the same common interests and identify new ones, and work together to achieve common goals, just as the UN Charter implores us to,” he said.

Baroudi advises companies, governments, and international institutions on energy policy and is an award-winning advocate for efforts to promote peace through dialogue and diplomacy. He told his audience that with both climate change and mounting geopolitical tensions posing threats to people around the world, policymakers needed to think outside the usual boxes.

In this way, he argued, “we might develop the mutual trust which alone can create a safer, happier, and better world for our children and grandchildren.”

“Consider the possibilities if Greece, Türkiye, and Cyprus became de facto – or de jure – partners in a pipeline carrying East Med gas to consumers in Bulgaria, Romania, and Italy,” he said. “Imagine a future in which Israeli and Lebanese gas companies were similarly – but independently – reliant on the same Cypriot LNG plant for 10-20%, or even more, of their respective countries’ GDPs.”

He also envisioned bilateral cooperation scenarios between Greece and Turkey and Syria and Turkey, as well as a regional interconnection that would provide backup energy for multiple coastal states.

“Instead of accepting certain ideas as permanently impossible, we ought to be thinking ahead and laying the groundwork,” Baroudi said. “For Greece and Türkiye – as for other pairs of coastal states in the region – a good starting point would be to emulate the Maritime Boundary Agreement agreed to by Lebanon and Israel in 2022.”

Stressing the potential for cooperation to address both energy requirements and the stability required for stronger growth and development, Baroudi – whose books include a 2023 volume about the Lebanon-Israel deal and a forthcoming one urging other East Med countries to do the same – called on the EU to take up the challenge.

“Using dialogue and diplomacy to expand energy cooperation would benefit not just the countries of the East Med but also the entire European Union and much of its surrounding ‘neighborhood’,” he told an audience of energy professionals and key government officials. “That level of promise more than merits the attention of Brussels, the allocation of support resources, and even the designation of a dedicated point-person tasked with facilitating the necessary contacts and negotiations.”

“This is how we need to be thinking if we want to get where we need to go,” Baroudi said. “Instead of allowing ourselves to be discouraged by the presence of obstacles, we need to be investigating new routes that go around them, strengthen the rule of law – especially human rights law – as a basis for the international system, and promote lasting peace among all nations. Only then can we declare victory over what the 18^th-century Scottish poet Robert Burns called ‘man’s inhumanity to man’.”

أشار أحد اهم الخبراء في مجال الطاقة رودي بارودي، في مؤتمر انعقد في أثينا، إلى أن “دول شرق البحر الأبيض المتوسط يجب أن تتعاون مع بعضها لزيادة إنتاج وتصدير الطاقة والتخفيف من التوترات الإقليمية”.

وقال بارودي امام المشاركين في المؤتمر: “يجب ان نضع في الاعتبار الاحتمالات الايجابية إذا أصبحت اليونان وتركيا وقبرص شركاء بحكم الواقع أو بحكم القانون في خط أنابيب ينقل غاز شرق المتوسط إلى المستهلكين في بلغاريا ورومانيا وإيطاليا، وان نتخيل مستقبلًا تعتمد فيه شركات الغاز الإسرائيلية واللبنانية ولكن بشكل مستقل على نفس مصنع الغاز الطبيعي المسال في قبرص”.

وأضاف بارودي “لنتصور اهمية وايجابية سيناريوهات التعاون الثنائي بين اليونان وتركيا من جهة وسوريا وتركيا من جهة ثانية إضافة إلى الترابط الإقليمي الذي سيوفر طاقة احتياطية لدول ساحلية متعددة”، لافتا إلى أنه “بدلاً من قبول أفكار معينة على أنها مستحيلة بشكل دائم، يجب أن نفكر في المستقبل ونضع الأساس لاعمال ايجابية مشتركة على ان تكون نقطة البداية الجيدة مماثلة لاتفاقية الحدود البحرية بين لبنان وإسرائيل في عام 2022”.

وشدد بارودي أمام حشد من المتخصصين في مجال الطاقة ومسؤولين حكوميين على أن “استخدام الحوار والدبلوماسية لتوسيع التعاون في مجال الطاقة لن يفيد فقط دول شرق البحر المتوسط ولكن أيضًا جميع دول الاتحاد الأوروبي والكثير من” الجوار “المحيط به وان هذا الاستحقاق المهم يستحق أكثر من اهتمام بروكسل، لا بل يستحق تخصيص موارد الدعم،وتعيين موفد مكلف بتسهيل الاتصالات والمفاوضات اللازمة”.

وختم بارودي بالقول: “هذه هي الطريقة الفضلى التي نحتاجها للتفكير إذا أردنا الوصول إلى حيث يجب ان نكون بدلاً من السماح لأنفسنا بالإحباط بسبب وجود عقبات،فنحن نحتاج إلى التفتيش عن طرق جديدة وحديثة تلتف على الافكار والمواقف القديمة، وتعزيز سيادة القانون وخاصة قانون حقوق الإنسان كأساس للنظام الدولي، وتعزيز السلام الدائم بين جميع الدول،عندها فقط يمكننا إعلان النصر على ما أسماه الشاعر الاسكتلندي روبرت بيرنز في القرن الثامن عشر: وحشية الإنسان للإنسان”.

Saudi Aramco, the world’s biggest oil producer, has awarded contracts worth more than $25bn for the second phase of the expansion of its Jafurah gas field and the third phase of expanding its main gas network.

The development of the Jafurah field, which is estimated to hold 200 trillion cubic feet of gas, is expected to cost $100bn and boost the state energy firm’s gas production by more than 60 per cent by 2030.

“These contract awards demonstrate our firm belief in the future of gas as an important energy source, as well as a vital feedstock for downstream industries,” said Amin H. Nasser, Aramco president & CEO.

“The scale of our ongoing investment at Jafurah and the expansion of our master gas system underscores our intention to further integrate and grow our gas business to meet anticipated rising demand.”

Aramco awarded 16 contracts, worth a combined total of around $12.4bn, for phase two development at Jafurah. This phase will include the construction of gas compression facilities, pipelines, the expansion of the Jafurah gas plant, gas processing trains, utilities, sulfur, and export facilities.

The expansion includes the construction of new riyas natural gas liquids (NGL) fractionation facilities in Jubail, including NGL fractionation trains, utilities, storage, and export facilities.

The state-energy giant also awarded 15 lump sum turnkey contracts worth approximately $8.8bn to kick off the phase three expansion of the master gas system. The expansion will increase the size of the network and raise its total capacity by an additional 3.15 billion standard cubic feet per day (bscfd) by 2028 through the installation of around 4,000km of pipelines and 17 new gas compression trains.

Furthermore, Aramco awarded an additional 23 gas rig contracts worth $2.4bn, two-directional drilling contracts worth $612m, and 13 well tie-in contracts at Jafurah, for a total of $1.63bn.

Aramco’s LNG ambitions

Saudi Arabia is working on developing its unconventional gas reserves, which require advanced extraction methods such as those used in the shale gas industry.

Aramco signed 40 corporate procurement agreements worth $6bn with local suppliers in February as the state-owned energy giant seeks to develop the country’s energy services sector while boosting its localisation programme.

The agreements cover the supply of a range of products comprising strategic commodities, such as instrumentation, electrical, and drilling equipment.

Meanwhile, an additional 15 trillion standard cubic feet of gas (scfd) were proven at Aramco’s Jafurah field in February, adding significant volumes to the kingdom’s proven gas and condensate reserves.

The company estimates that Jafurah’s reserves have reached 229 trillion cubic feet of gas and 75 billion barrels of condensates. Jafurah is the country’s largest unconventional non-oil-associated gas field and reportedly the biggest shale gas development outside of the US.

Aramco is expanding its portfolio into LNG at a time when global demand for the fuel has surged, particularly in Europe, which is replacing reduced pipeline supplies from Russia. It forayed into the global LNG market last September by acquiring a minority stake in EIG Partners’ MidOcean Energy in a deal valued at $500m.

The state-energy giant signed non-binding agreements with two US energy firms Sempra and NextDecade, for the supply of 5 million tonnes per annum (mtpa) and 1.2 of mtpa LNG, respectively, for 20 years.

Many of us take electricity for granted. We flip a switch and expect the light to turn on. But the capacity and resilience of power systems – generation, transmission, and distribution – are not guaranteed, and if these systems fail, it’s lights out for the entire economy.
I recently participated in a meeting of the Power and Energy Society (PES), which operates under the aegis of the Institute of Electric and Electronic Engineers. The mood at the event – attended by more than 13,000 industry professionals from around the world, plus hundreds of companies exhibiting advanced equipment and systems – was upbeat and energetic.
But, despite the prevailing “can-do spirit,” everyone at that meeting knew that the power sector is confronting tremendous challenges, beginning with the growing frequency of extreme weather events. Firms are now working to devise innovative ways to restore power more quickly after outages, and are investing in infrastructure that will increase resilience to shocks. This includes efforts to minimise the risk that the system itself will cause or exacerbate a shock, such as a forest fire.
Compounding the challenge, the power sector must make progress on the green transition. That means reducing its greenhouse-gas emissions, while maintaining a stable power supply for the economy. Since renewables work differently from fossil fuels, this implies a transformation not only of power generation, but also of transmission and distribution, including storage.
Meanwhile, demand for electricity is set to surge, owing to factors like electric-vehicle adoption and the rapid growth of data centres and cloud-computing systems. The power needs of artificial-intelligence systems, in particular, are expected to grow exponentially in the coming years. According to one estimate, the AI sector will be consuming 85-135 terawatt hours per year – about as much as the Netherlands – by 2027.
To meet these challenges, all three components of the power system need to be integrated in so-called smart grids, which are managed by digital systems and, increasingly, AI. But developing smart grids is no small feat. For one thing, they require a host of devices and systems, such as residential smart meters and distributed energy resource management systems (DERMS), which are needed to manage multiple flexible and fluctuating energy sources and integrate them into power networks. And, because they are built on digital foundations, effective cybersecurity systems are essential to support stability and resilience.
None of this will come cheap. The International Energy Agency estimates that, if the world economy is to reach net-zero emissions by 2050, annual investment in smart grids will need to double – from $300bn to $600bn – globally through 2030. This represents a significant share of the estimated $4-6tn that will be needed annually to finance the overall energy transition. But, so far, the required investment has not been forthcoming. Even in advanced economies, the smart-grid funding gap exceeds $100bn.
Meeting all these challenges will require coordinated action across what are often highly complex systems. The US is a case in point. America’s roughly 3,000 electric utilities operate in various combinations of generation, transmission, and distribution, as well as playing a market-making role as intermediaries between generation and distribution. Each US state has its own regulators, and local distribution can be regulated at the municipal level. America’s nuclear infrastructure is managed at the federal level, by the Department of Energy, which also funds research and, under the 2022 Inflation Reduction Act, finances investment in the power sector. And the US Environmental Protection Agency plays a major role in setting the direction and pace of the energy transition.
Other entities oversee the country’s three major grid regions and the interconnections among them. For example, the not-for-profit North American Electric Reliability Corp is responsible for six regional entities that together cover all the interconnected power systems of Canada and the contiguous US, as well as a portion of Mexico.
Achieving the necessary transformation of power systems will require us to figure out how to finance the relevant investments, who will ultimately pay for them, and how a complex, technologically sophisticated, and rapidly evolving smart-grid system can be co-ordinated.
It is difficult to imagine how investment could be mobilized at the scale necessary without the financing power of national governments. This is especially true in the US, where there is no shared carbon price to level the playing field. It is thus good news that, last month, President Joe Biden’s administration announced a range initiatives and investments designed to support and accelerate structural change in the power sector.
As for who should pay, the answer is complicated. In principle, investments that reduce costs or augment service quality and stability should be reflected in tariffs. The problem is that the investments that improve service quality must be spread across multiple entities that own different assets in the grid. Highly decentralised regulatory structures would make coordinating all these tariff changes and transfers unwieldy, at best.
When it comes to investments that advance the green energy transition – including the global public good of emissions reduction – we know who should not pay: local communities. In fact, the implementation of local-level charges to finance such investments is bound to lead to inefficiencies and underinvestment. It would also be unfair: there is no good reason why consumers in areas with problematic legacy systems should pay more. If they are asked to, they are likely to resist.
A better approach would be to use an expanded federal industrial policy not only to help finance and especially to co-ordinate long-term investments in the power sector, but also to guide the development of a complex, interconnected smart-grid system. This system needs a banker and an architect working with firms, regulators, investors, researchers, and industry organisations like the PES to carry out a complex, fair, and efficient structural transformation. National governments need to be involved in filling both roles. – Project Syndicate

• Michael Spence, a Nobel laureate in economics, is Emeritus Professor of Economics and a former dean of the Graduate School of Business at Stanford University and a co-author (with Mohamed A El-Erian, Gordon Brown, and Reid Lidow) of Permacrisis: A Plan to Fix a Fractured World (Simon & Schuster, 2023).