By Evelyn Robinson, iNews Cayman Special Correspondent

Although it remains at the heart of international oil and gas production and distribution, the Middle East bears much inefficiency when it comes to energy consumption. Largely due to energy subsidy and pricing issues, this uneconomic usage now means that the Middle East and North Africa (MENA) region will need an investment close to $600 billion to enable it to initiate an effective energy policy that will address its supply and demand issues while making sure the region’s oil production maintains sustainable practice.

This, latest, announcement was made by energy industry officials and analysts, following on from statistics showing that almost half of the world’s annual consumption of oil comes from developed countries. Whilst this is no surprise, if the rest of the developing world was to move towards the level of consumption of these developed countries, global demand for energy and oil would be at least double what it is now.

Growing consumption in developing countries

To put it into perspective how much energy developed countries use; here in the Cayman Islands, we consumed 88,888.9 tons of liquid petroleum gas per one million people (figures taken in 2005). In India, this figure was 2,435.6 tons per one million people. Since 2005, however, India has emerged as a developing nation, fast becoming a vast financial hub, with an increasing population of new middle classes. Cayman has an area of 260km2 and a population of 56,729. India, on the other hand, has an area of 3,288,000 km2 and a population of 1,241,491,960 (1.24 billion) people. If India’s consumption of liquid petroleum gas was one day to match that of the Cayman Islands (0.089 tons per person) it would stand at 110,492,784.44 tons. Cayman has long been thought of as a place people escape to beat income tax. Therefore it has a high proportion of wealthy residents; the island, an offshore tax haven for many of the world’s rich and famous, may therefore have an above average energy consumption per person. However, these figures are merely indicative of the direction energy demand and consumption may be heading.

Regulation is key

Many developed countries have put into place measures and targets to reduce their own energy consumption. For example, the U.S has a target to reduce CO2 emissions by 28% by 2020, while Australia is imposing a “carbon tax” on its worst polluters. For the developing world, the emphasis is not on reduction, but on regulation, according to Majid H. Jafar, Chief Executive Officer of Crescent Petroleum, who spoke at last week’s World Energy Forum. “To create a sustainable energy grid, the MENA countries need clear and good energy policies that will help the region offer sustainable energy with a good energy mix to power their economies,” he said.

A fifth of the world’s population still does not have access to electricity; however, as world development continues, this figure will decrease, dramatically rising global energy consumption levels. While we are actively seeking to bring this fifth out of poverty and isolation, we also need to ensure that we maintain stability when it comes to sustainability, argued Jafar. Reduction initiatives in developed nations coupled with regulation and policy in developing countries will be key.

Projected global demand for oil and gas will require $37.9 trillion between 2011 and 2035 – 25 percent of this will be in gas development, according to another industry figurehead, Leonid Bokhanovskiy, Secretary General of Gas Exporting Countries’ Forum. Of this investment, $600 billion of this amount will need to go to the Middle East and North Africa region in the next few years alone. This is due to a vast growth in the region of energy demand; since 1982, this figure has grown by over 500 percent due to the region’s economic growth.

The way forward

Another hot topic for discussion at the World Energy Forum was the development of shale gas usage. In the U.S alone, shale gas has aided the country to meet energy needs of its citizens while also significantly bringing down the price of gas and oil. “Shale gas is a game changer in the energy equation and will fulfil the energy needs of the future while meet the environmental concerns of the people – as it is clean, green and safe,” said Chris Faulkner, CEO of Breitling Oil and Gas. It is clear from the Forum that energy consumption is as serious an issue for the developing world as it is for the developed – but that there will be sufficient measures in place to control this.