Lebanese energy crisis didn't just happen overnight
BEIRUT: The energy crisis that has battered Lebanon should have been foreseen months ago, when crude prices on international markets began skyrocketing. The directors of Electricite du Liban (EDL) should have worked on a contingency plan to avert from any potential fuel shortages; the Energy and Water Ministry should have sought and secured alternative energy fuel, such as natural gas, to diversify the portfolio of resources; the Finance Ministry should have stocked up financial emergency reserves to ward off the possibility of a total blackout; and the Lebanese government should have sketched out a clear and stringent policy years ago to transform EDL - a corrupt, inefficient state-owned company that sucks more than 20 percent of the total national budget - into the flagship of the country's economic recovery.
This, however, is Lebanon - a nation where a divided government follows different personal agendas that never directly benefit its people.
And because of corruption and mismanagement, neither EDL, the Energy and Water Ministry nor the government have fulfilled their professional and civic duty to their clients and citizens. Their actions - or rather, lack of action - have plunged Lebanon into its worst energy crisis in 22 years, leaving the average citizen with a staggering electricity price of $0.137 per kilowatt hour - the second highest rate in the world after the Palestinian territories.
But why has this happened? How did it come to this after the billions of dollars allegedly spent on postwar reconstruction efforts?
The accused would divert the question by blaming the crisis on the high price of crude oil - which is traded on international markets and thus out of the government's control. But one thing that can be controlled by the Lebanese government - and by EDL - is the choice of energy fuel, and the method of securing a steady supply. But instead of extending the list of imported fuel resources, Lebanon, thanks to corruption, only relies on one energy fuel - oil - the price of which is, again, out of government control. Such a policy is a recipe for disaster.
To be fair, in the mid-1990's the Lebanese government had a clear understanding of the dire need for a portfolio of energy resources, and it reacted by building power plants at Zahrani and Beddawi - the only two such plants in the country that burn natural gas. Zahrani and Beddawi were supposed to become the catalyst for a modern electricity sector. They were supposed to solve the energy crisis.
Zahrani and Beddawi are both 450 Megawatts (MW) dual-fuel combined-cycle plants consisting of two gas turbines associated to one heat recovery steam generator and feeding one steam turbine. Both stations were designed to burn on the energy fuel of the future - natural gas - a cheaper and more environmentally friendly fuel which ensures a longer power plant lifespan and is nearly 30 percent more efficient when used in combined-cycle mode.
The construction of the plants was reassuring to the tattered electricity sector, but there was a major glitch: Lebanon hadn't yet secured a supply of natural gas, which in turn has brought on the current crisis. Worse, in 2000-2001, the government rejected an offer that couldn't be refused.
From the late 1990's, Lebanon had been in talks to import liquefied natural gas (LNG) from Qatar, one of the world's largest producers. But then Lebanese authorities suddenly decided to back off from the important discussions, for no apparent or logical reasons - even though the deal would have widely contributed toward alleviating EDL's costs.
Though highly improbable (since it is known that corrupt Lebanese officials killed the deal), perhaps both countries were not able to reach an understanding. Nonetheless, that shouldn't have been an excuse to abandon the idea of importing LNG - especially as there are many suppliers in the region, including Egypt and Algeria.
To do so, Lebanon would only have needed to build an LNG terminal, thus allowing LNG tankers to dock and unload their shipment - a one-time cost that would have been quickly balanced out by the savings accrued from purchasing natural gas instead of oil.
However, rather than follow this option earlier, Lebanon waited until 2002 to announce that it would jointly build, with Syria, a 64-kilometer natural gas pipeline, GASYLE I. This pipeline, when complete, will transport 1.5 million cubic meters per day of natural gas - which will be bought from Syria's state-owned Syrian Petroleum Company - to the Beddawi power plant, which in turn will help Lebanon save on its energy costs.
However, the pipeline, which was supposed to be completed in May 2004, is still not operational.
To make matters worse, under the current plan, natural gas will not reach the Zahrani plant before 2006, at the earliest, as the feasibility studies for extending the pipeline from Beddawi to Zahrani have not yet been completed.
But the scandal doesn't stop there. Since there are no supplies of natural gas, both the Zahrani and Beddawi plants have been generating electricity by burning gas oil; this has cut the expected 25-year lifespan of both plants by nearly 50 percent.
Thus, EDL will eventually have to spend even more money to salvage the deteriorating plants - once heralded as the energy sector's saviors.
All in all, Lebanon must quickly secure new, cheaper supplies of energy resources, because there is no guarantee that the price of crude will not continue to soar higher. Work on the GASYLE pipeline must be accelerated, and Lebanese authorities must strike a deal with other regional suppliers to guarantee a steady supply of natural gas.
The country's current energy crisis should be a wake-up call. The lights may have recently been turned back on again, but the corrupt are still scheming in the dark. It is time they are held accountable for leading the nation and its economy into such a state.