Economist says Algeria will need its shale gas

Article Summary
Algerian economist Mustafa Muqaidish expects Algeria will be forced to rely on its national resources of shale gas in the next 10 years to cover the rising internal demand and consumption.

Algeria will be forced to exploit its shale gas in the next 10 years, not only to meet the rising annual local demand for energy, but also to cover the total public expenditure and the cost of social transfers and to guarantee the continuation of subsidies on basic commodities, which represent 30% of the total budget.

Mustafa Muqaidish, an economic expert, anticipated that the government will exploit the national resources of shale gas in the next 10 years. He noted that international data revealed the start of a gradual tendency toward relying on non-conventional types of materials such as renewable and other energy sources, particularly shale gas, and the return of many international economic powers to exploit coal resources, as is the case of China.

Speaking to El-Khabar by phone April 14, Muqaidish said that this option is necessary because of the authorities’ obligations in the medium term to meet the rising local demand for all kinds of energy, by virtue of higher population growth and the resultingly increasing use of energy resources, particularly in the economic and industrial sectors. Minister of Energy and Mines Youcef Yousfi also mentioned this option in his recent statement, through which he stressed the need to be prepared for this stage, especially at the technical level. Muqaidish said that Algeria ranks third in the world in terms of shale gas reserves. In parallel, he confirmed that Algeria is also facing the challenge of preserving the same exports level, which requires the government to rely on alternative energy sources and on conventional fuel that can be depleted. The government should also ensure that the level of national exports of energy products does not decrease to less that 60 billion cubic meters per year to cover the expenses of the government’s economic programs, to complete the basal facilities and to cover the cost of social programs and wages.

Muqaidish explained that the concerns over the exploitation of Algeria’s shale gas are not associated with any environmental and climate implications, which, as he said, can be controlled and avoided. Rather, these concerns are linked to the techniques that will be used and the high excavation, production and extraction costs of this type of energy resource. He considers energy prices unlikely to collapse, because of the large supply on the international market with access to shale gas production, as high production costs imply high marketing prices.

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Found in: gas, finance, exploration, energy, economy, business, budget, algeria
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