Egypt’s Zohr Oil Field: Political, Environmental, and Economic Consequences
After discovering the Zohr Oil Field in 2015, Egypt became a net exporter of gas, producing about 6.8 billion cubic feet of gas per day. The South Valley Egyptian Petroleum Holding Company recently announced an international bidding round for 10 offshore oil and gas exploration blocks in the Red Sea in order to “achieve the optimum economic utilisation of all potentials and natural resources to contribute to the sustainable development of Egypt.”
The exploration blocks will bring in direct foreign investments — the combined investments of 20 exploration wells are worth more than $2 billion. Mohamed Aballah Zain, Undersecretary of the Transport and Communication Parliamentarian Committee, indicated that the Zohr field enables Egypt’s gas independence, “reduces the state’s expenditures of foreign currency, and breathes new life to other related sectors like energy and chemical industry, which will help meet the market demand of such products.”
In total, foreign oil companies are planning on expanding gas production by more than 40 percent and investing around $10 billion in Egypt this year. The U.S. Geological Survey has also predicted that the eastern Mediterranean area (including Egypt, Cyprus, and Lebanon) will be able to support regional and European power demand for decades, which gives Egypt a particular position of power in the regional and global political economy. Egypt is also hoping that the shift from diesel and gasoline to natural gas will reduce air pollution in cities such as Cairo.
Although true that natural gas emissions from smokestacks and tailpipes emit 50 to 60 and 15 to 20 percent less carbon dioxide than gasoline respectively, methane leaks out during the process of drilling, extracting, and transporting the gas. Methane is 34 times stronger than CO2 at trapping heat over a 100-year period, and 86 times stronger over 20 years. Furthermore, while natural gas produces less sulfur, mercury, and particulates than other fossil fuels, areas near drilling sites often witness worsened air quality because of increased concentrations of other hazardous air pollutants.
Whether or not Egypt sees reductions in air pollution will depend on how the natural gas is extracted. On a larger scale, using natural gas will still contribute to emissions that increase atmospheric temperatures.
Additionally, while gas windfall can help stabilize Egypt’s economy, there are few signs that the windfall is reaching a majority of Egyptian citizens. In Cairo, inflation and unemployment are high and public services are shrinking, due in part to high government subsidies on electricity and gas that keep domestic energy consumption high. In order for natural gas to have the beneficial economic and environmental impacts that the Egyptian government is hoping for, there needs to be a concerted effort to reduce inflation and protect public services, as well as to ensure the use of extraction methods that minimize methane emissions.