After a rocky start that saw a several-year delay of the sector’s development as a result of political squabbling, in late April the Lebanese Ministry of Energy and Water (MoEW) announced the oil and gas companies that will be eligible to bid for offshore exploration licenses in late. Executive lauds this milestone and hopes the government adheres to the ministry’s step-by-step plan to get contracts signed in November.
Parliament must immediately ratify a newly produced draft transparency law to oversee the country’s hoped-for oil and gas sector. The law codifies the publication of information, like payments from companies to the government, and criminalizes illicit behavior. Its ratification would send a positive signal to the companies and professionals looking to do business in the country on a level playing field. It would also show the public that the government’s management of the sector will be open.
Lebanon needs this law because, as experience shows, we cannot rely on the good faith that the MoEW, and the rest of the government, says it is bringing to the oil and gas sector. We need strong legislation to hold them to account as they manage an industry that is notoriously dirty the world over.
The ministry says it wants to manage oil and gas in an efficient and transparent manner, its track record in other industries, however, sometimes shows it doing the opposite. While it has articulated its near-term plan for oil and gas, and shown its willingness to engage the public, it has not done so for its other major portfolio – electricity. Lebanon was not able to complete the implementation of its 2010 electricity plan; and the ministry has never explained why it failed.
With regards to the the latest plan for electricity, dubbed the “plan to rescue the sector,” the government has given the ministry a carte blanche in filling out the particulars, and the ministry has avoided sharing the details with the public. The last cabinet meeting to discuss the electricity plan took place at the end of March, but what has happened since then, and how will Lebanon secure both its short and long-term electricity needs?
Do not worry about it, the Minister of Energy and Water wrote on Twitter, as Executive went to print. The message was, as long as there is an electricity boost in the summer, do not sweat the details and trust us. Trust a ruling class whose governments have successively failed since the 1990s to provide cheap and reliable electricity? That, in that same time, drained tens of billions of dollars from the public treasury to subsidize Electricité du Liban – a failing public institution that the 2010 electricity plan admits is vastly overstaffed with unqualified political appointees? No, thank you.
The electricity plan needs to be scrutinized, but first, it needs to be detailed. We have no idea, beyond some high level bullet points, of what its measures will cost or how they align with Lebanon’s climate change commitments. We do want 24-hour electricity, but are not willing to write a blank check to get it.
Lebanon’s potential gas resources might be used to generate electricity down the road, linking these two issues, and the ministry is at a crossroads regarding the intersection of these two portfolios. The path taken could lead us miles forward, or in the other direction. Unfortunately, any confidence that could be inspired in the transparent planning of oil and gas is immediately shaken by the opacity with which electricity is handled.