Algeria Favors Renewable Energy Over Shale Gas

Algeria does not need to capitalize on its shale gas reserves because the country’s natural gas and renewable energy resources will meet its power needs, according to Energy Minister Noureddine Boutarfa.

"Algeria doesn't need, in the short term, to use its shale gas, because it has other natural resources, including gas," Boutarfa said on the sidelines of a conference the Higher Institute of Commercial Studies in Kolea, a town near the capital of Algiers. "The energy sector is witnessing fast changes in the technologies used in energy production…and the future is in renewable energy."

The Algerian government and economy is dependent on oil and gas revenues to remain afloat, and the 2.5-year market downturn has crippled the national budget. The country needs to diversify and liberalize its economy to gain access to much needed funds from the World Bank and other lending institutions.

State-owned Sonatrach’s oil and gas exports make up nearly all of Algiers’ revenues, which are used to pay the employees of the country’s large public sector. Red tape prevents strong private enterprises from emerging, concentrating the consequences of economic gains and losses in the national government’s coffers.

Among other concerns for Algeria is the failing health of President Abdelaziz Bouteflika, who suffered a debilitating stroke in 2013. Since then, members of his family and other close allies have been running the country on his behalf, according to reports from the capital city.

Related: Did Algos Drive The Latest Oil Price Rally?

Morocco, Algeria’s rival and western neighbor, has been leading the global push towards green energy, especially since the United Nations’ climate talks were held in Marrakesh last November. King Mohammed VI has commissioned the construction of the Noor solar power complex in the desert of Ouarzazate, which will be the largest facility of its kind in the world once completed in 2018.

By Zainab Calcuttawala for Oilprice.com

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