The evaluation and possible solutions of Egypt’s current energy crisis

Topics: Fossil fuel, Petroleum, Energy crisis Pages: 7 (2335 words) Published: January 15, 2014
The evaluation and possible solutions of Egypt’s current energy crisis

Egypt, one of the cradles of civilization, is distinguished by its tourist industry due to its mysterious cultural attributes and long history. Its abundant touristic resources and attractions made Egypt an admiration of travelers all over the world. Consequently, the tourist industry has become an essential role of Egypt’s economic foundation. Moreover, Egypt is also regarded as the largest non-OPEC (organization of Petroleum Exporting Countries) country in the continent of Africa (Payne, 2012). According to Payne (2012), Egypt’s daily yield of crude oil is approximately 700,000 barrels, and since the year of 2008, Egypt has discovered 7 crude oil and natural gas deposits. Among them, the largest detection produces around 58000 barrels of crude oil and 2.8 million cubic feet of natural gas every day. (Graeber, 2013). Norton Rose Fulbright, an international business organization, has also indicated that Egypt possesses a total capacity of 4.4 billion barrels of crude oil and 78 trillion cubic feet of natural gas in its deposits. Ironically, even with such unique financial advantages and bountiful domestic natural resources, Egypt is now undergoing the most severe energy crisis in its history. This tremendous energy scarcity has already resulted in a soaring of food prices, and regular blackouts of household electricity, if this deficiency continues it could further threaten the livelihood of Egyptian citizens or even lead to serious social security issues. Kirkpatick (2013) pointed out in his report that because diesel machineries are the most common apparatus Egyptian use to irrigating and harvesting their crops, the insufficiency of fossil fuel has disabled numerous famers from yielding crops in the harvest season. It is not only the farmers who are despairing, the employees who need to commute a long distance for work also feel miserable due to the fact that the scarcity of gasoline has doubled the fuel price and caused a long queue in every gas station. Furthermore, the electricity blackouts have made the electricity in vital public facilities such as schools and hospitals unstable, thus tremendously impaired the quality of medical and educational affairs. More seriously, an evaluation of International Crisis Group has revealed that the fragile political stability accompanied with the growing public panic (concern) toward the inflating of fuel price could ultimately result in the withering of Egypt’s hard-earned democracy (Kirkpatrick, 2013). Before the government can take any action to appropriately resolve this severe energy scarcity, it is extremely crucial for them to be acquainted with the principal causes of this problem. Although several speculations have been made toward the root of this devastating energy crisis through different perspectives, it is generally believed by experts that Egypt’s energy insufficiency is the ultimate result of its incompetent refining technologies, inappropriate subsidizing policies, leaky energy allocating systems, and teetering social security. First of all, the initial element that put Egypt in this vulnerable circumstance is its inadequate refining technology. According to Kirkpatrick (2013) and Payne (2012), Egypt has very restricted capability in refining crude oil into petroleum products such as diesel fuel. Therefore, despite the fact that Egypt holds a considerable amount of domestic energy, they have to rely heavily on the import of petroleum products, and export their crude oil at a much cheaper price. The other primary preexisting factor that contributes to the energy crisis is Egypt’s burdensome subsidizing policy of energy. According to Ragui, an official of Egypt’s Economic Research Forum, nearly 30% of Egypt’s governmental expense can be attributed to the energy subsidy. Moreover, Ragui also pointed out that subsidized fuel cost less than one fifth of its original price (Kirkpatrick, 2013)....
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