Iran has the second highest reserves of natural gas in the world. Yet mismanagement, a failure to spend adequately on technology, the effect of sanctions in cutting off access to some equipment, and the Islamic Republic‘s decision to spend great sums on expensive weaponry, on support to its regional proxies and allies, and above all, on its nuclear project, rather than on improving its natural gas infrastructure, have led to the catastrophic situation that Iran, suffering through a very cold winter, now finds itself in. The story of this deep freeze that affects all Iranians can be found here: “Facing a very cold winter, gas-rich Iran shutters institutions to save gas,” by Debbie Mohnblatt, The Media Line, January 17, 2023:
As a cold wave hit Iran this week, government offices, universities, and schools were closed on Sunday, in a bid to save gas at a time of growing scarcity. The oil-and-gas-rich country is facing a severe shortage and is failing to heat its citizens at the peak of winter.
Closing government offices, universities, and even schools, in order not to have to heat them, and thereby to conserve what gas the country has available, is a drastic measure, akin to a COVID-19 lockdown. The government has prioritized gas for residential users, because if millions of Iranians were to suffer the cold, this could lead to protests at a time when the government already has its hands full trying to suppress the current rioters, whose protests began over the mistreatment of women but have since metastasized to demands for “Death to the Dictator! Death to Khamenei!” – that is, for an end to the Islamic Republic’s dictatorship. Shutting down government offices means fewer public services will be accessible. Shutting down schools and universities an extra da every week will have a harmful effect, but one impossible to quantify, on the education of the young.
The governor of the northeastern province of Razavi Khorasan, Yaghoub-Ali Nazari, said on national television that by Saturday night, supplies were disrupted for at least 90,000 residential users.
While Iran holds the world’s second-largest proven reserve of natural gas, it lacks the technology needed to exploit it to full capacity, says Dr. Ramu C.M, a Berlin-based consultant on energy and international politics.
“Production from many of its fields has either not been tapped yet or has been stagnating or dwindling due to the unavailability of adequate technology, such as hydrocarbon engineering and oilfield services, needed to improve recovery from aging or mature oil and gas reservoirs,” Ramu C.M told The Media Line.
The sanctions applied on the Islamic Republic have prevented several Western actors and oilfield service providers from investing and participating in the exploration and production segment of Iran’s oil and gas industry, he explains.
Iran’s problem is not a shortage of gas – it’s got plenty — but the government’s failure during the last four decades to start production from some new fields, or to spend money to recover more gas from aging fields. Ever since the Iranian revolution of 1979, many of the country’s energy professionals, secular supporters of the ancient regime, either fled the country, or were imprisoned, or killed. The new regime was more concerned with creating an Islamically pure country than with furnishing itself with the experts and Western technology it needed to produce gas. And its nuclear project not only has cost billions of dollars, but also led, in the end, to American sanctions that have prevented Tehran from accessing the technology it needs to produce more natural gas.
This has affected Iran’s ability to repair, develop, and expand its gas infrastructure, says Roxane Farmanfarmaian, a lecturer on Middle East politics at the University of Cambridge and an expert on Iran. On top of that, she notes, Iran has a very high domestic consumption of gas – the fourth highest in the world.
Cut off from Western technology and expertise, Iran’s ability “to repair, develop, and expand its gas infrastructure” has greatly suffered. Its new friends, Russia and China, have not yet been able to replace the West as suppliers of the necessary technology. And natural gas has historically been the most important source of energy for Iran, supplying more energy than what it derives from oil, coal, and nuclear plants combined. It has traditionally exported as much oil as it could to be sold on the world market, while husbanding its natural gas for the Iranian market, and through subsidies, ensuring that the country’s poor have enough gas to heat their homes and use to cook with.
The fact that the Iranian government subsidizes gas for the poorer sections of the population has contributed to the high domestic consumption, Farmanfarmaian says, noting that the government faced protests in the past when it tried to reduce the subsidies. These problems are not new. Whenever the weather gets cold, gas is cut off to preserve reserves,” Farmanfarmaian says. But this winter, Iran’s Oil Ministry says gas consumption has increased by 30% compared to last year, leading to the decision to close governmental and educational institutions to counter the phenomenon.
Gas consumption has gone up 30% this winter, a direct response to the extraordinarily bitter cold Iran has experienced since early November. The Tehran government has always subsidized gas for the poor, bur now there are millions more poor than ever before, as Iran’s economy continues to crater. If the government stops subsidizing gas for the poor, that could lead to riots by the affected, and those enraged with the government over the ending of subsidies could join forces with the other protesters nationwide who ever since mid-September have been demanding “freedom” and “death to the dictator” – that is, an end to the regime.
Javad Owji, the country’s oil minister, blamed part of the supply shortages on Turkmenistan’s halt of gas exports to Iran since Thursday. Iran heavily relies on neighboring countries such as Turkmenistan for gas supply since this is more convenient than consuming locally produced gas.
“his is because the main problems faced by the Iranian oil and gas industry are related to energy storage and transportation, according to Hamid Talebian, a research fellow at the German Institute for Global and Area Studies.
“Domestic reports often indicate that at least around 40-50% of the produced energy would be wasted without primarily being consumed.[because of leaks during transportation or if inadequately stored] All in all, when a cold winter hits, the supply cannot keep up with the needs,” Talebian told The Media Line.
He explains that to supply the northeastern provinces, importing gas from neighboring Turkmenistan makes more sense than using Iranian-produced gas. Iran’s main site for gas extraction is in the Persian Gulf, in the south of the country.
Therefore, “considering the inefficient and old infrastructure, it is more costly to transport energy all the way up the northeastern side of the country to cover its energy needs than importing the gas from Turkmenistan,” he says….
Iran’s gas fields are in southeastern Iran, in Khuzestan Province, right on the Gulf. It’s a long way to the Iranian consumers in the cities of northern Iran; the pipes carrying the natural gas northward are old, with plenty of leaks. So it has made more sense for Iran to simply buy gas from Turkmenistan, which sits right on Iran’s northeastern border; no long pipelines are necessary. But now Turkmenistan, which has also suffered from the same unusually cold winter as Iran, has needed to use much more of its gas for its own people’s needs. And there are problems with Iran delaying its previous payments for gas that have soured the Turkmens on continuing to sell their gas to the Islamic Republic.
Any socioeconomic crisis at this stage, Talebian believes, could trigger further mass uprisings.
“Historically, a shortage in supply and the increasing cost of energy have stimulated and inflamed the protests in Iran, as was the case in 2019,” he says.
The coldest winter on record in Iran may do more to bring down the regime than Mahsa Imani’s misplaced hijab. If the Iranian government decides it must decrease its subsidies for natural gas intended for the poor, the estimated 20 million poor Iranians affected will almost certainly turn out to protest on the street. They are much more numerous than the current protesters, who began coming out on the streets after the death of Mahsa Imani in mid-September, and physically much tougher; their lives are now so difficult they may think they have nothing to lose. Should those Iranians, with their economic demands, join the middle-class protesters with their demands for freedom and an end to the dictatorship, the government might find it no longer knows where to put its feet and hands. That’s how regimes fall.