News Analysis: High consumption, past policies, U.S. sanctions lead to Iran's gas shortage

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TEHRAN, Jan. 17 (Xinhua) — High domestic consumption, ineffective policies of the past and the U.S. sanctions are among the factors behind the recent gas shortage in Iran that led to nationwide closures over the previous days, according to Iranian analysts and media.

Iran, which has the second-largest gas reserves in the world behind Russia, has experienced a gas shortage since the start of the winter.

While most Iranian provinces had sub-zero temperatures, the Iranian government had to temporarily shut down factories, companies, as well as schools and colleges in a number of cities from Saturday to Monday in order to keep people’s homes warm.

HIGH CONSUMPTION

In an analysis piece, the news website Shahrara News wrote that gas consumption by the residential as well as trade and industrial sectors in Iran has surpassed 700 million cubic meters (mcm) per day this winter, indicating a 150-mcm increase year on year.

It said the figure is 6.7 times higher than the global per capita and three times more than that of the entire consumption by the European Union states.

According to the Iranian Oil Ministry, the country’s current daily gas production stands at close to 1 billion cubic meters, of which only 850 mcm remain after the separation of gas condensate.

Iran’s daily gas consumption reaches between 650 mcm and 750 mcm during winter, leading to an imbalance of 200 mcm in the gas network, according to the analysis.

In a separate analysis of the country’s energy status quo, the news website Didban Iran wrote that statistics hint at an absence of principled energy production and consumption planning in Iran in the previous years, also blaming “bad consumption” as one of the main reasons for the current energy shortage.

INEFFECTIVE POLICIES OF PAST

Experts said that some ineffective policies implemented in the past were one of the reasons.

Morteza Behrouzifar, an energy expert, told Iranian Students’ News Agency (ISNA) that during the past years, diversifying the energy basket has not received due attention in Iran, and fuel storage has also been almost neglected likewise.

During the 1980s, Iran decided to use gas as the main fuel for domestic consumption as the country had abundant gas reserves and did not seek to export them, the expert noted.

The majority of the industries developed in Iran during those years and the following years required big amounts of energy to run, said Behrouzifar, adding the policy seemed quite logical until the time arrived when the country failed to optimize domestic energy consumption and increase production proportionately.

Speaking to ISNA, another energy expert Mehdi Hasehmzadeh also hinted at insufficient attention to gas storage in the past years, regretting that two Iranian companies involved in the field of gas storage were dissolved in 2016, and no other company is currently active in the area.

Between 2005 and 2013, the Iranian government increased the number of the cities and villages connected to the nationwide gas network from 600 to 1,000 and from 2,080 to over 14,000 respectively, Khabar Online news agency wrote in another analysis.

During the same period, the then-Iranian government increased the number of industrial units using natural gas as feedstock from 9,500 to 58,000. However, paying insufficient attention to using other energies for development is one of the main reasons for the current gas shortage.

SANCTIONS SHARE

In their analyses of the country’s current circumstances, a lot of Iranian media blamed the U.S. sanctions, reimposed on Iran’s oil and banking sector following Washington’s withdrawal from a 2015 nuclear deal in May 2018, as the main culprit for the current imbalance in the gas sector.

Khabar Online wrote that Iran needs 160 billion U.S. dollars in investments to renovate its oil wells, which have deteriorated and sustained damage over the past few years.

The U.S. sanctions have impeded both the flow of foreign funds and the transfer of technology to Iran, which needs to import modern technologies to boost its gas production, according to Khabar Online.

Behrouzifar said the lifting of U.S. sanctions is a long-term cure for Iran’s domestic gas industry.

The U.S. sanctions not only have affected Iran’s gas production capacity but also its gas distribution infrastructure, Didban Iran quoted Ali Jabal-Ameli, a financial market expert, as saying. Enditem

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