Saturday, September 02, 2006

Why Jordan needs nuclear energy (part I)

The recent rise in energy costs, coupled with the drop in oil donations from Iraq and the Gulf states has exposed the precarious energy situation in Jordan. The country is almost totally dependent on imported oil and natural gas, and the cost is eating away at our budget. Fahed Fanek estimates that oil imports constitute 21% of our GDP.

The currently perceived economic effects of high energy costs are only the tip of the iceberg as to how this is affecting the country. For example, high energy costs preclude large scale desalination plants, heavy industries and mass transit systems. Thus, it effects the water situation, unemployment and the environment. Simply stated, we are using less energy than we need, and the cost is being borne by the human and physical environment of the country.

The government is placing heavy emphasis on the conversion to natural gas. A gas pipeline has been established to supply Jordan, Syria and Lebanon with natural gas from Egypt. As an incentive to the Jordanian government, the Egyptians agreed to fix the price of natural gas used in the country for 15 years. Because the cost is low, the electrical system of the country is being converted to gas turbines, and energy hungry industries and being encouraged to convert their energy sources to natural gas.

In fact, this situation is reminiscent of that which left us in this position in the first place. Prior to natural gas, Jordan’s electricity infrastructure was based on petroleum derivatives, particularly residual fuel. As far as I know, no non petroleum rich country produces significant electricity using residual oil, because it is simply too expensive. The Hussein Thermal Station was built to produce electricity based on the premise that petroleum is given to us at low prices or for free. Of course, this premise no longer holds.

Now we are repeating the same mistake. We are rebuilding our electricity generation capacity on the premise that natural gas from Egypt will always be abundant and cheap. Since signing the agreement, the world price of one million BTU of natural gas has risen from $4.9 to over $7 (a 42% increase). While we are shielded from these fluctuations now, it would be naïve to think that the price will be fixed after 2018. At that point, we will be where we are now, paying for energy through the nose. It will take many years and a lot of money to convert the electric system again.

The National Electricity Power Company sells the Kilowatt hour of electricity to medium industries for between 28 (night) and 38 (day) fils, which works out to between 4 and 5.4 US cents. This can only be done through artificial suppression of costs through subsidies on residual fuel and the fixed gas price agreement with Egypt. Electricity prices are now comparable with current US industrial rates in industrialized states such as Ohio (5.4 cents), Michigan (6.06 cents) and Illinois (4.42 cents), although lower than other states. The lower rates in the US are not subsidized, but are a result of the availability of abundant low cost alternatives such as hydroelectric, coal and nuclear energy.

Reliance on natural gas in the near future should only be viewed as a stepping stone towards more energy independence. The volume of gas to be imported from Egypt (reaching about 2 billion cubic meters per year) is enough to generate about 11300 Gigawatt hours per year. Electricity generation in 2003 was 8500 GWh, and with annual growth in consumption estimated at 9% per year, the volume of gas pumped at preferential rates will not be enough to produce the electricity needed in a few years.

In fact, the production of more electricity should become a goal in itself, as the amount of electricity produced per capita in Jordan (1190 KWh) is lower than Israel (6000 KWh) or any industrialized nation. As noted in the beginning, more abundant low cost energy will mean a greater ability to manage our economy and environment. In the next installments I will discuss some of the options available to us in getting out of this predicament.

Part II here.
Part III here.



At 11:35 PM, Blogger Abu Shreek said...

I agree with you that we may need nuclear energy, but the questions here is:
1. what percentage of our oil consumption goes to electricity?
2. Given the type of industries that we have, what perecntage of total electricity generated is consumed by the industry?

At 11:48 PM, Blogger Khalaf said...

Abu-Shreek: Oil is being phased out as a fuel for electricity. The 400 MW Hussein Thermal station is the only one currently using residual fuel, with the rest depending on natural gas.

I guess your point is how imprtant is electricity in the overall picture. From an economic perspective, the relative importance is derived from economic considerations (what is cheaper to use). Currently, it is still cheaper to heat a home with kerosene or diesel than with electricity. But this can easily change. The only thing that is exclusive to liquid petroeum derivatives is transportation. Even that can be partially changed with public transportation and the introduction of fuel cells.

30% of electricity is used in industry. Again, this is a function of economics, since many potential industries are not competitive due to the high cost of energy.

At 12:55 AM, Blogger Habchawi said...

I think the initial cost of setting up a plant needs to be considered. Factoring setup cost, safety measures and much the Kilowatt/hour would cost? Is it worth it? How it’s going to be financed?
Additionally, are there any political implications for such project?

Good draft Khalf.

At 1:44 AM, Anonymous Anonymous said...

I know you still didn't address the nuclear part of the title in this first part of the writeup, but I just wanted to ask what about the Red To Dead project? Does it make sense to consider that first before we think nuclear energy.

Can the Red to Dead project satisfy Jordan's energy needs the same way a nuclear powerplant would? Which one costs less? And which one can Jordan easily find sponsors for because obviously Jordan lacks the technical know-how to do either.

At 2:21 AM, Blogger Abu Shreek said...

the point i wanted to make is how feasible is it to invest in nuclear energy (which has a very high initial cost), if most of our oil consumtion is going to transportation fuel and non-electric heating (as you said).

At 5:56 AM, Blogger Habchawi said...

I think they are working on the first phase (engineering studies) of the “Red to Dead” project. The $5 billion project that Jordan is pursuing with international donors main goal is to replenish the shrinking Dead Sea. In addition to replenishing the shrinking Dead Sea, the Red-Dead pipeline will meet another need for Jordan: freshwater. The Red-Dead pipeline would make use of the 400-meter elevation difference between the seas to generate power to desalinate some or all of the water pumped from the Red Sea. “The reject brine, concentrated seawater after desalinization, will be diverted to the Dead Sea and the produced freshwater pumped mainly to Jordan and some to Israel and the Palestinian Authority. So, the Red to Dead is not the answer for the energy problems.

At 6:51 AM, Blogger Khalaf said...

Hi guys: I will get to all of this.

Stay tuned!

At 9:47 AM, Blogger Aboud said...

Cando reactor is based on natural uranium and it does not need enrichment. We have the fuel available in commercial quantities (refer to Mineral resources establishment in the Ministry of Energy and Mineral Resources studies). The only thing is to manufacture it into ceramic fuel and have it in Cando design bundles. We can locate it on the Gulf of Aqaba for cooling purposes and we can buy the reactor to start with from Canada, as Canada reactors are mainly this type. We don’t even have to worry about
proliferation headache.
Good idea Khalaf, you need to convince
Israel first to agree for most major big projects that relate to IAEA in that area Israel has the say so in it.
Good Luck.... ;)

At 4:08 PM, Blogger Khalaf said...

Aboud: I think that the Candu reactors are heavy water reactors. This means that they are considered to be bigger problems for non-proliferation, because they can be used to produce plutonium.

I agree that the ideal location would be Aqaba.

Jordan has a greater right than Israel to obtain peaceful reactors, because it has signed the NPT, which Israel has not.

At 9:28 PM, Blogger Unknown said...

Before choosing the nuclear option, how about the old new idea of opening a channel between the Red and the Dead Sea? The difference in altitude will able us to use the energy of moving water to produce electircy at a cheap and very safe manner. I prefer this over the nuclear option since we do not have the best records when it comes to safety:-)

At 12:15 AM, Anonymous Anonymous said...

Hey Khalaf I have tagged you look at
as for the nuclear energy issue I think we have more urgent areas for spending like fighting poverty and ensuring social security and health insurance for all Jordanians.

At 3:32 AM, Anonymous Anonymous said...

Khalaf, in the US there are two energy sources that are being used to a small degree and ways to make them more efficient are being explored: Wind energy and solar energy. Would either of these be a viable energy option for Jordan? Also, new on the scene here is some kind of bio-fuel from corn, I think. The oil supplies are going to be gone eventually, so we all have to change our ways or find new sources of inexpensive energy (probably both).

At 8:07 AM, Blogger asil said...

i swear i feel you me and my fiance are having so much difficulty with trying to find a house and so far we cant afford anything until i graduate from college and get a job and maybe my salary will help us liive in an at least a decent area not abdoun or anything will i hope someone can help me and luai find ana apartment unfurnished in amman at least300 jd a month rent for now ????

At 5:26 PM, Blogger Khalaf said...

Issam: I have just posted the second installment, which includes some information on the Red-Dead Canal.

Batir: What I am suggesting is not a luxury, but an investment that will help improve economic and social conditions in the country.

Thanks for the tag. I hope you will come to regret it.

Anon: I have some information on solar and wind energy in the new post. As for biofuel, this is heavily subsidized in the US, and the agricultural base of Jordan is not conducive to such an endeavor.

Thanks for sharing.

Asil: I think that you can find an apartment for 300 JD, but you will have to look around. I suggest trying the Wasit newspaper.

At 4:55 AM, Anonymous Anonymous said...

Khalid, in the US, we, too, are looking at the fact that we have to change our energy sources and soon. My brother is a chemical engineer, a very successful and experienced one. He has researched nuclear energy, and considered working at one of the nuclear facilities here in the US. He considers nuclear energy very problematic. The disposal of the nuclear waste alone is enough to give pause. The first nuclear waste in the US was disposed of on a fault line---but the problem is that geologists do not even know where all the geologically problem areas are. Everyone now knows about the San Andreas fault in California, but the most severe earthquake in the US was in the area near St. Louis, Missouri in the 1800s. Sediment load led to the earthquake apparently. Disposal of the highly dangerous waste is a real problem. I am going to solar energy in my house within the next year or so, and I am trying to change my lifestyle. It seems that wind energy or solar energy is safer. Just my thoughts though. lynne

At 8:36 PM, Blogger Khalaf said...

Hi Lynne: Of course, you share these ideas with most people. In fact, modern society has to deal with hazerdous material all the time. This can include mercury, lead, cadmium and other heavy metals (like the material you will have to use in batteries to store the energy generated by your solar house) that do not degrade with time. The fact of the matter is that there are technical solutions available to deal with this type of material. I hope you read the following posts on the same subject.


At 3:10 AM, Anonymous Anonymous said...

Although I support nuclear energy (mainly the modernised Russian VVER/AEG type of over 1000+ Mw of Atomstroyexport) I believe that a public bidding process will prove that it is the right option for Jordan. Whatever NPP (Nuclear Power Plant) we pick will be a political decision & will probably not be the best one for Jordan.

Anyway, Jordan consumes 105,000 barrels of oil per day, most of it (over 50%) used in transport, with petrol (gasoline) consisting of 17% & around 45-50% diesel (trucks & buses), & around 3-5% is jet fuel. The rest is mainly fuel oil (heating oil) & LPG (the gas cylinders) & so on.

Electric energy generation consists of less than 5% due to high oil & most of Jordan's electricity now comes from Egyptian natural gas at bellow market prices. My thesis was actually on electricity demand.

Anyway, the solution to the energy crisis in Jordan is to invest in infrastructure that does not need us to evaluate the transport sector first. Jordan does not have a railway system (for passengers+freight/cargo) & no plan exists to build a nation-wide network.

What is worse is, the system planned for Amman is little more than a 'profit project' than a national one, that is, somebody (some people) will profit at the expense of everybody else in the guise of national development.

I believe what is needed is to encourage solar energy (water-heating) & electric utilities for winter heating, while electric ovens can replace LPG. That's the only real energy strategy we can impose, not the 'band aid' solutions proposed today.


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