I have just returned from Algiers, where I attended the 4th Symposium of the Algerian Gas Industry Association (AIG), a long-standing active member of the International Gas Union (IGU).
The symposium took place as the Algerian energy sector and higher government circles were still struggling to contain the political, economic and psychological fallout from the terrorist attack on the Tiguentourine natural gas processing facilities at In Amenas.
This unprecedented attack has sparked global interest and a great deal of media and trade press coverage. In addition, think-tank discussions and professional round-table talks have been held to raise awareness, and provide advice on the issue. This plethora of information, debates, and opinions contrasts with the paucity of explicit and organized discussion of the issue in Algeria.
The symposium could have offered an opportunity to initiate some form of discussion to fill this vacuum. However, the final agenda remained virtually unchanged from its pre-attack version. Surely, the main theme – “Natural Gas as the Primary Energy Source for the 21st Century: Making the Transition Succeed” – was broad enough to allow a wide range of topics, even if the organizers must have found it easier and safer to focus away from the issue of the day and instead emphasize the long-term trends that will shape the industry.
The opening ceremony started with a minute’s silence to honor the victims of the attack, and as the symposium progressed the international guest speakers, among them the president of the IGU, expressed sympathy with the victims’ families. Otherwise, the dominant view that emerged from the presentations and discussions was that the industry will be facing both huge challenges and huge opportunities, many of which are likely to be associated with shifting market dynamics from increasing shale gas availability.
But just because the AIG was not ready to discuss a subject that was on everyone’s mind does not mean that its members did not wish to discuss it. In contrast to the near business-as-usual deliberations in the formal sessions, coffee breaks and lunch times provided the opportunity to try to figure out how far reaching In Amenas will be and how it will affect the industry outlook.
In one of the breaks, some delegates expressed concern that the attack may deter foreign investment for some time. Others pointed to the likely increase in the cost of operating in remote Saharan areas and the greater element of risk assessment that will inevitably be factored into new ventures. And everyone found it an irony of fate that the attack coincided with the passage of key amendments to the prevailing Algerian hydrocarbon law. These amendments, which were among the highlights of the symposium’s agenda, offer more attractive economic incentives to further oil and gas exploration for both conventional and unconventional resources.
In another break, I joined a conversation about the investigation into the attack announced by the government and the lack of clarity about its nature and when and how it might proceed. On the one hand, President Abdelaziz Bouteflika ordered a “high-level commission of inquiry” without apparent follow up action. On the other hand, his minister of justice referred to a “judiciary commission” being appointed. Further ambiguity stemmed from the confusion created by a field trip to the site of Tiguentourine by a bi-cameral delegation from parliament, which some took to be a “parliamentary commission of inquiry.” While there were some valid arguments for the attack to be investigated at national level, concerns were expressed that any such inquiry would find itself under political pressure to limit its scope and focus on local and specific accounts, leaving broader issues unaddressed. Perhaps foremost among such issues are institutional gaps and potential shortcomings in coordination and communication between relevant departments.
Institutional gaps often arise from political rather than ideological discontinuities. As far as the Algerian energy sector is concerned, this is illustrated by the de facto dissolution since 2000 of the National Energy Council (NEC) – the highest institutional energy policy body. During its last reincarnation in the second half of the 1990s, under President Lamine Zeroual’s administration, the ministry of defense joined it as a prominent new member to form its core element along with the foreign affairs and energy departments.
The Council would normally meet under the chairmanship of the head of state to deal with overarching policy issues. However, in the context of unrelenting domestic terrorism arising out of national political strife, the NEC’s agenda must have been broadened to include security issues. Following a hardening of the security posture in the Saharan region, which resulted in the establishment of exclusion zones to better shield the upstream hydrocarbon industry, the Council must have considered and coordinated further actions that needed to be taken by the energy sector itself.
Today, the relevant departments face a more complex regional geopolitical and security situation stemming from the collapse of some of the neighboring regimes, a proliferation of weapons in the hands of terrorist and insurgent groups and the subsequent mayhem and chaos on Algeria’s immense southern Saharan borders.
How these departments respond to new threats depends to a large degree on their ability to anticipate them and take proactive measures. In this regard, no one can question the fact that Algeria’s foreign affairs experts forewarned – repeatedly – of the regional security breakdown a post-Qadhafi power vacuum would entail. Nor can anyone deny that the Algerian military deployed large security forces along the eastern and southern Saharan borders very early on.
It may therefore be assumed that these two departments had a timely awareness of the changing regional security landscape that has helped them develop their early warning and preparedness capacity. However, the lack of a coordinating institutional framework that might have included the energy department and committed it to sharing security-related policies probably eased any pressure to challenge routine security arrangements at strategic hydrocarbon locations.
Although none of the thoughts I shared during the symposium’s breaks are as clear-cut and structured as the above may suggest, each of them contains an element of truth and all of them seem to have been expressed out of a sense of frustration at not being able to analyze the context and circumstances that led to the attack. Hopefully AIG, which has developed a solid reputation as a credible and respected non-governmental professional association, will seize on the next opportunity to discuss the lessons from In Amenas candidly – not for the sake of debate alone, of course, but to contribute to better informed and relevant policies.
*Mr Aissaoui is a policy-oriented energy economist. The opinions are his own and not of the institutions he is currently associated with. Comments and feedback may be sent to [email protected].
