Economics at your fingertips  

Stability versus Sustainability: Energy Policy in the Gulf Monarchies

Jim Krane

The Energy Journal, 2015, vol. Volume 36, issue Number 4

Abstract: Over the past half-century, production from vast reserves of hydrocarbons has transformed the once destitute Persian Gulf monarchies into developed states with comfortable lifestyles. However, longstanding policies that stimulate energy demand in these states are diverting an ever-larger share of resource production into domestic markets, threatening the region's chief export and biggest contributor to GDP. Five of these six sheikhdoms must soon choose between maintaining energy subsidies and sustaining exports. Rising domestic demand for natural gas, once considered nearly free, has already forced some states to shift to higher-cost resources, including imports. For now, governments have absorbed these costs and insulated consumers from higher prices. This practice only intensifies the pressure on exportable resources. As hydrocarbon production reaches a plateau, domestic consumption will gradually displace exports. Politically difficult reforms that moderate consumption can therefore extend the longevity of exports, and perhaps, the regimes themselves.

JEL-codes: F0 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link) (text/html)
Access to full text is restricted to IAEE members and subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Ordering information: This journal article can be ordered from

Access Statistics for this article

More articles in The Energy Journal from International Association for Energy Economics Contact information at EDIRC.
Bibliographic data for series maintained by David Williams ().

Page updated 2018-10-27
Handle: RePEc:aen:journl:ej36-4-krane