The Oil and Gas Sectors, Renewable Energy, and Environmental Performance in the Arab World

The Oil and Gas Sectors, Renewable Energy, and Environmental Performance in the Arab World

Hajar El Alouani (Al Akhawayn University, Morocco) and Ahmed Driouchi (Al Akhawayn University, Morocco)
Copyright: © 2014 |Pages: 57
DOI: 10.4018/978-1-4666-5210-1.ch008
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Abstract

As most Arab countries produce and export a large share of oil and gas to world markets, it is important to focus in this chapter on these sectors to find out about the economic effects on these economies. In addition, with the development of non-renewable energies and with the major debates and actions undertaken to promote greener economies, this chapter aims to characterize the main trends affecting both renewable and non-renewable energy in Arab countries. The question related to the promotion of greener activities in this part of the world is tackled through the use of Environmental Performance Index in relation to the use of energy. Promising results are attained based on descriptive statistics, trends, and regression analyses. They show that Arab countries need to further account for the knowledge economy to diversify their use of energy and promote better environmental performance.
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1. Economics Of Oil And Gas

This part introduces an overall description of the situation of oil and gas in each Arab country. This is followed by the analysis of the dynamic patterns of net revenues from these natural resources. The relationships between net revenues and prices are then introduced to show how oil and gas market indices drive revenues from these commodities. The readers need to keep in mind that the Middle East as one of the major players in oil production has both been blessed and cursed from this resource (Elbadawi, 2009). To this author, the oil curse strongly affects economic diversification with Arab countries depending on oil exportations instead of produced goods. This situation led to Arab economies being highly disturbed by the oil demand that has been unpredictable and particularly volatile (Elbadawi, 2009). Further developments as in (Gray, 2011) are found in the chapter focusing on rents from natural resources.

While it can be used for exports and local consumption, it has now become a drag to economic and social development of the region. One aspect of the so-called “oil curse” comes from the drastic changes in oil price. Many oil-exporting countries were overconfident in the golden years where prices rose and did not prepare for the drops that happened in the following years. These economies are therefore dependent on the oil price swings lacking long-term economic stability (Tétreault, 2004). While the empirical aspects of oil rents is discussed in the corresponding chapter, the focus is placed here on the analysis of oil and gas as sources of energy both in the producing and exporting countries but also in the world.

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