x Abu Dhabi, UAEMonday 24 July 2017

Even region’s energy sector feels pinch of US shutdown

“What gets measured, gets managed,” as the business guru Peter Drucker said.

“What gets measured, gets managed,” as the business guru Peter Drucker said.

With the United States government shut down, its energy information administration (EIA) soon won’t be collecting vital data that the whole energy industry relies on for decisions. But in the Middle East, the centre of the world’s oil and gas, information is hard to come by even when government is functioning normally.

Websites of some official Middle Eastern energy bodies look as though they were designed in 1997 by a teenager, and not even a very talented teenager. Last annual reports date from 2004. Links are dead and important facts are misreported or simply not available.

For instance, Iraqi sources indicated that their exports would be down by half a million barrels per day (mbpd) in September because of maintenance at the Gulf terminal, only for this to be angrily denied in August by the oil ministry spokesman. But indeed the September figures, just in, show almost exactly a 0.5mbpd fall.

Because of this lack of transparency, a large part of studies, even for government clients, involve consultants scurrying from one department to the next, trying to gather data. The resulting report is then also confidential, so the next study has to repeat the entire process. This is good business for the consultants, including me, but not a productive use of national funds.

Compare this to best practice elsewhere in the world. The EIA’s website is a compendium of data covering state level, monthly or even weekly figures for production and use of all kinds of energy, often back to the 1970s. Norway and the Canadian province of Alberta make geological data and core samples of rock from oil wells publicly available, after a short interval. Combing through old well logs for clues was invaluable in triggering the US shale boom.

JODI was launched by the International Energy Forum, a body for cooperation between energy producers and consumers. Although its data is sometimes suspect – Iran and Venezuela are serial offenders – it has quickly become invaluable.

Big oil producers are worried about price volatility – and one of the best ways of reducing that is to provide timely, accurate reports.

As Middle Eastern countries seek to attract investment, transparency and good data are competitive advantages. Big companies can afford bespoke studies, but this is harder for the region’s small and medium enterprise sector. Home-grown entrepreneurs need reliable information to help them launch, say, a new solar power system. Economic forecasters, property developers and environment agencies need to know how much electricity people are using, how much diesel fuel trucks are burning, how much households are spending on petrol.

Obscuring information can easily disguise poor performance by government departments or state companies. Indeed, as Drucker’s quote suggests, the units may not even be aware themselves of their failings.

The region is clearly able to compile good data. The Gulf in particular has many excellent e-government initiatives in other fields. Abu Dhabi Water and Electricity Authority publishes comprehensive data on the performance of its plants. The Emirate of Fujairah’s statistical yearbook is useful and detailed. Abu Dhabi’s Environment Agency released its first greenhouse gas inventory in May, and Dubai’s should be out later this year.

Of course, some information is commercially confidential or bears on national security. But too often, data is not available just from inertia or an outmoded culture of secrecy. Building the region’s proclaimed knowledge economy requires ready access to the basic facts.

Robin Mills is the head of consulting at Manaar Energy, and author of The Myth of the Oil Crisis and Capturing Carbon