Monday, August 29, 2005

Energy: The Daily Star Reveals More...

Coverage of Lebanese affairs by the Daily Star continues to surprise me in a pleasant way. Today's edition includes an article by Bechire Saade titled Fneish close to energy deal with Syria. The article is interesting because, among other things, its subject is one of the most intriguing, mystifying, and politically charged subjects in Lebanon: the country's energy sector. However, it is also well written, and dare I say, quite daring, especially when compared to Daily Star norms.

Saade's piece revolves around his interview of Energy and Water Minister Mohammad Fneish, and it coincides with a visit to Kuwiat by Fneish and Seniora where they will sign a six-month agreement to supply Lebanon with "gas-oil" (someone please explain to me what that means!!! I thought we used "diesel-oil" which I found equally incomprehensible).

Anyways, I will highlight some points in the article that really caught my attention:

1. Fneish is negotiating with the Syrians to supply Lebanon with electricity. If the deal goes through, two power plants in Tyre and Baalbeck would be shut down. His rationale is that the power plants are too expensive to run, and that the only way the energy sector can recover is if Lebanon imports cheap subsidized energy from its neighbors.

Considering the border crisis, and the fact that Syria is the only neighbor we can import electricity from, I wonder about the wisdom of reducing our own energy-production capacity. Should we pay more for energy just to be "energy independent" from Syria? I'd say yes! I'd also say that there should be other ways to cut costs!

2. "Fneish stressed that a political consensus is needed for any reform [in EDL] to occur."

This caught my attention because we all get the impression that the Shi'a are the major beneficiaries of free electricity in Lebanon. Therefore, having Fneish as minister would consequently solve the problem of collection.

However, according to the article, some experts claim that at least 40% of Lebanese don't pay their electricity bills. Therefore, even if the entire Shi'a population didn't pay their bills (which is far from the case), then there'd still be around 15% of Lebanese who aren't paying up (assuming Lebanese who happen to be Shi'a are somewhere around 25% of the population). Furthermore, I recall the scandal a few years ago that was caused by EDL's release of some major debts owed to it by major Lebanese businesses, educational institutions and government agencies.

Consequently, I will believe Fneish when he says a political consensus is needed because all of those non-payers have their own political protection, and will lobby vociferously to protect their privileges. Fneish will also have his work cut out for him. He said some things that really impressed me:

3. "We have to fix our collection capacity by enlarging its scope [into areas of Lebanon that were considered out of reach].... And for this to happen, you need better administrative organizational skills.... The problem of the sector is not its size but its productive efficiency.... EDL had 5,500 qualified employees in 1974 for 300,000 subscribers; today it has a little more than 2,000 for over two million subscribers.... Furthermore, the average age of EDL's staff is 69."

Is this a Lebanese politician talking??? Is this guy supposed to be a "crazed fanatic" who only knows how to bomb people and kill Israelis? I've already mentioned the irony of Hizballah before in this blog... how it is essentially a modern organization with a religious garb. In fact, I will reassert that Hizballah has the potential to be a leading domestic force for reform and meritocracy, if only they focused their entire efforts on that front. This issue deserves an entire entry on its own so I won't go any further. However the subject definitely is intriguing.

4. Finally, Fneish's strategy with regards to securing fuel for our power plants apparently calls for seeking subsidized energy and oil from the region as a temporary respite, but ultimately to secure natural gas as a cheaper alternative to oil derivatives.

It is in this section, where you see the Dailystar's new journalistic umph. Here's what I mean:

Bechire Saade reports that "Syria agreed three years ago to supply Lebanon with gas at preferential prices provided it completes the necessary pipeline for transporting gas. The Lebanese government failed to do so due to management inefficiency and successful political lobbying to protect oil interests."

"Successful political lobbying to protect oil interests???" I've never heard that one before! I remember posting an entry a couple months ago placing all the blame of the failure to complete the natural gas pipeline on Syria's shoulders. Now, according to this assertion by the Daily Star, there's a Lebanese side to the coin as well! I would like to know who these "oil interests" are in Lebanon. There is relative transparency in almost every other Lebanese industry but why the big shroud in the oil sector? Why are the big shots shrouded in anonymity?

Finally, I'll close with a bit of good news... Qatar has expressed interests in building a Liquified Natural Gas refinery plant in Lebanon according to the article. I urge everyone to keep that in mind and keep a watchfull eye to see if the Lebanese government misses out on this economic opportunity as well!


Doha said...

An insightful piece. Indeed a lot is happening right now on the energy front in Lebanon and Fneish's leadership is not looking bad at all. In fact, around two weeks ago, when I was still back in Lebanon, I read that some employees in the energy ministry were indicted/charged (not sure) because of shady transactions discovered by Fneish upon taking hold of the ministry's portfolio. I thought that was an interesting piece of news...

hummbumm said...

Lebanese oil interests are the various oil importers, who you guessed it are backed by the various political bigwigs. It is big business. I know the Mobil stations are/were owned by Jumblatt interests. I am sure that the other big boys are involved, probably not Aoun, given his recent exile

JoseyWales said...

...the average age of EDL's staff is 69 Can that be? If true: No Comment.

Raja is right. Agreements with Syria mean nothing. Can we afford to give them further strategic leverage by buying electricity from them? Especially before the Mehlis report is out? The answer is obvious to all but the idiot (and I am NOT saying that Fneish is one).

Finally, re being impressed by Saade: I say MAYBE.

I'll be impressed when his next piece actually goes after NAMES of people lobbying against fixing EDL or energy or anything in Lebanon, and when the rest of the idiot press plays it up AND investigates it further by hounding the beneficiaries DAILY until SOMETHING happens. I've heard this crap a zillion times before: NO NAMES, NO PRESSURE, NO RESULTS (and no respect for our crappy press).

Anonymous said...

Average age of EDL employees is 69years.
Hope Fneish would consider injecting some fresh blood.