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Economy News _ Baghdad
A report issued by the Center for Strategic and International Studies reduces expectations that have increased in intensity in recent years regarding the decline in dependence on oil and gas and the threat that this may pose to the Middle East and North Africa, whose economies depend mainly on energy exports.
Studies indicate that talk of an imminent end to the era of oil and gas, in light of pressures to reduce reliance on traditional energy sources in order to combat global warming, are nothing but mere estimates that are irrelevant to reality, pointing out that oil and gas are still the basis of the economies of the countries of the Middle East and North Africa.
Anthony Cordesman, who chairs the Arleigh Burke Chair in Strategic Affairs at the Center for Strategic and International Studies, issued a report on the strategic importance of the Middle East and North Africa region, entitled “Strengths and Limits of Oil and Gas Wealth in the Middle East and North Africa Region and the Challenge of Climate Change.”
In one aspect, the report examines estimates of future demand for oil and gas in the Middle East and North Africa region and explains that current trends in the global economy require increased use of oil and gas exports from the Middle East and North Africa region until at least 2050, especially in Asia and the least developed countries outside the Organization. Economic cooperation and development.
Projections for the future use of oil and gas and imports, which do not include reductions in the use of fossil fuels to deal with global warming, show a significant shift in the flow of oil and gas exports in the Middle East and North Africa to meet the growing demand for energy in developing countries such as India, and similar increases in oil and gas exports with the aim of Allowing major developed countries such as China, Japan and South Korea to reduce their dependence on coal. It also shows a shift towards increasing the use of natural gas imports to reduce the use of oil. Estimates of these shifts suggest that this could significantly increase total Asian demand for oil and gas exports through 2050.
Part of the analysis sheds light on a major issue shaping the future of the Middle East and North Africa region during the period from 2023 to 2050.
He explains that current climate change projections raise important questions about the future use of fossil fuels, which remain one of the main sources of commercial income and wealth in the region. There are significant uncertainties in most aspects of estimates of the impact of global warming and its impact on oil and gas exports in the Middle East and North Africa region.
greenhouse effect resistance
Some estimates of future demand for oil and gas also adopt a “business as usual” approach to global economic development, which assumes that efforts to limit global warming will remain relatively limited.
Estimates predict that importing countries will not reduce their oil and gas imports to reach the limited level of demand for fossil fuels called for by current national and regional policies.
And the forecasts of the International Energy Agency's bodies highlight that efforts to reduce the effects of global warming until 2050 will require massive reductions in demand for oil and gas.
This may have an equally significant impact on the demand for oil and gas exports in the Middle East and North Africa region and the economies of the main exporting countries and force them to radically change and diversify their economies and invest enough of their export revenues before the occurrence of such reductions to be a major and permanent source of income.
But such an impact on MENA exports is uncertain.
The International Energy Agency expects that developed countries, such as the United States and members of the European Union, will reduce the use of fossil fuels thanks to their superior ability to invest in renewable energy sources and other alternative fuels and use energy more efficiently in developing their economies. Accordingly, it appears that the reduction of oil and gas exports in the Middle East and North Africa region is limited due to the continued demand from less developed Asian countries and other developing countries.
Another set of major changes in the strategic role and importance of the Middle East and North Africa region may be driven by the increasing strategic confrontations between major powers. The war in Ukraine is a case in point. And it had a significant impact on Russian oil and gas exports, which could lead to long-term radical shifts in the nature of European imports and Russian oil and gas exports that affect the exports of the Middle East and North Africa region. It may also cause permanent European reductions in dependence on exports coming from Moscow and Russia's shifting of its gas exports to China or to new countries such as Turkey.
At the same time, governments remain in a state of competition to meet needs through government spending between the United States, the European Union, and other European countries (and in countries such as Japan, South Korea, and China), which could place significant restrictions on such investments in new energy supplies and the facilities associated with their production.
The strategic competition (or confrontation) between China and the United States and its main strategic partners is another major area that may lead to competition for strategic influence to control oil and gas exports in the Middle East and North Africa region, and this may contribute to provoking serious confrontations between China and other countries affecting the flow of oil. Energy exports across the Middle East and North Africa region, and export flows across the Indian and Pacific Oceans. It may also lead to an increase in Chinese demand for Russian oil and gas exports as an alternative to relying on fragile shipping routes through the Indian Ocean, the Malacca Strait and the Pacific Ocean, in addition to a more intense competition between China and competing powers for influence over exporting countries from the Middle East and North Africa, and arms sales in the Middle East. region, security relations and the establishment of military bases.
Meanwhile, other estimates ignore the impact of climate change or show that China's current national policies fall short of the threshold needed to stop global warming. Other projections still ignore the impact of climate change and focus on economic development in ways that point to sharp increases in oil and gas exports to major parts of the developing world. These projections are also affected by major uncertainties in the pace and impact of climate change.
Cordesman is skeptical of predictions that the United States will be less dependent on oil and gas flows from the Middle East and North Africa.
The US economy depends on global oil and gas prices, as the US prices its own fuel at global levels during emergency energy crises. More importantly, the US economy depends on importing manufactured goods from oil and gas importing countries in Europe and Asia. The current data on the general trade balance of the United States shows that the total American dependence on all types of oil and imports makes the country now indirectly dependent on the flow of Middle East and North African exports to the United States' trading partners, unlike in the past when it was dependent on oil imports. direct gas to the United States.
However, this situation could change radically if the United States pumped a huge investment in alternative fuels, other sources of energy, energy efficiency, and conservation of available resources to reduce its emissions and the extent of its impact on global warming. The International Energy Agency listed these assumptions in its World Energy Outlook 2022, but they are highly uncertain.
The United States faces political challenges, problems related to inflation and other economic crises, and government spending needs that can cause significant investment constraints.
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