The Natural Gas Conundrum In Afghanistan: A Complex Energy Equation

Afghanistan has substantial natural gas reserves, with an estimated 16 trillion cubic feet of natural gas and 500 million barrels of natural gas liquids. In 2020, the country began extracting natural gas from a newly discovered field in the northern Jawzjan province, marking the first time in four decades that natural gas was being extracted in Afghanistan. The country's natural gas reserves are expected to play a key role in meeting its energy needs, with the Mazar-e-Sharif project being a pioneering investment in this regard. Afghanistan's geographical position also makes it a significant transit route for natural gas exports from Central Asia to South Asia and the Arabian Sea.

Afghanistan's natural gas reserves

Afghanistan has an estimated 1.6 billion to 1.8 billion barrels of crude oil, 16 trillion cubic feet of natural gas, and 500 million barrels of natural gas liquids, according to a 2019 report by the country's Ministry of Mines and Petroleum. This implies a value of $107 billion for the crude oil alone at current market prices.

In February 2020, Afghanistan began extracting gas from a newly discovered field in the northern province of Jawzjan. This was the first time in four decades that natural gas was being extracted in Afghanistan. The acting Minister for Mines and Petroleum, Enayatullah Momand, said that they were extracting 150,000 cubic meters of gas from a 1500-meter well at the field in Sheberghan city of Jawzjan. Feroz Bashari, head of the government's information center, said that the government could earn up to $8.5 million per year from the extraction and distribution of this gas. He also said that the development opens hundreds of employment opportunities and will ensure an uninterrupted gas supply to Jawzjan and the neighboring Balkh provinces.

Afghanistan has large untapped energy and mineral resources, which have great potential to contribute to the country's economic development and growth. The energy resources consist of natural gas and petroleum. The government was working to introduce new mineral and hydrocarbon laws that would meet international standards of governance.

The United States Geological Survey (USGS) and the British Geological Survey were doing resource estimation work in the country. Afghanistan's exploration activity had previously been conducted by geologists from the Soviet Union, who left good-quality geologic records indicating significant mineral potential. Resource development would require improvements in infrastructure and security in Afghanistan.

Afghanistan's significance from an energy standpoint stems from its geographical position as a transit route for oil, natural gas, and electricity exports from Central Asia to South Asia and the Arabian Sea. This includes the potential construction of the Trans-Afghanistan Pipeline gas pipeline.

Natural gas extraction in Afghanistan

Afghanistan has an estimated 1.6 billion to 1.8 billion barrels of crude oil, 16 trillion cubic feet of natural gas, and 500 million barrels of natural gas liquids. The country holds 1.75 trillion cubic feet of proven gas reserves as of 2017, ranking 62nd in the world.

In February 2020, Afghanistan began extracting natural gas from a newly discovered field in the northern province of Jawzjan. Acting Minister for Mines and Petroleum Enayatullah Momand said:

> We are extracting 150,000 cubic meters of gas from a 1500-meter well at the field in Sheberghan city of Jawzjan.

Feroz Bashari, head of the government's information center, said:

> The government can earn up to $8.5 million per year from the extraction and distribution of this gas found in Jawzjan. [It] opens hundreds of employment opportunities, and will also ensure uninterrupted gas supply to Jawzjan and the neighboring Balkh provinces.

Afghanistan's significance from an energy standpoint also stems from its geographical position as a transit route for oil, natural gas, and electricity exports from Central Asia to South Asia and the Arabian Sea. This includes the construction of the Trans-Afghanistan Pipeline gas pipeline.

The country has over 1,400 mineral fields, containing minerals such as barite, chromite, coal, copper, gold, iron ore, lead, natural gas, petroleum, precious and semi-precious stones, salt, sulfur, lithium, talc, and zinc, among many others.

The United States Geological Survey (USGS) and the British Geological Survey have been working on resource estimation in the country. The USGS studied two dozen reserve formations in Afghanistan and found "giant" deposits of copper and cobalt near Kabul, gold in the south of the country, and rare-earth elements in parts of Helmand province.

Afghanistan's ruby/spinel mines were mentioned in Arabic writings by early travellers, including Istakhri (951 AD), Ibn Haukal (978 AD), al-Ta'Alibi (961–1038 AD), al-Muqaddasi (ca 10th century), al-Biruni (b. 973; d. ca 1050 AD), Teifaschi (1240 AD), and Ibn Battuta (1325–1354 AD).

Natural gas and Afghanistan's energy security

Afghanistan has substantial natural gas reserves, with an estimated 1.6 billion to 1.75 trillion cubic feet of proven gas reserves as of 2017. This places Afghanistan 62nd in the world in terms of gas reserves, accounting for about 0.025% of the world's total natural gas reserves. The country has enough gas reserves to meet its annual consumption for nearly 300 years, yet it imports about 75% of its power from its Central Asian neighbours.

Afghanistan's energy consumption pattern includes both renewable (hydro, solar, wind) and non-renewable sources (natural gas, petroleum, coal, wood, and charcoal). In 2019, wood comprised nearly half (44%) of Afghanistan's energy consumption, while oil and gas comprised almost 8% and 17% of the country's energy consumption, respectively.

In recent years, Afghanistan has taken steps to utilise its natural gas reserves to meet its energy needs. In 2020, the country began extracting gas from a newly discovered field in the northern Jawzjan province, marking the first time in four decades that natural gas was being extracted in Afghanistan.

Additionally, the Mazar-e-Sharif independent power plant, supported by the International Finance Corporation (IFC) and private investors, is expected to boost the country's domestic power generation by up to 30%. The project, estimated to cost $89 million, is the first long-term private investment in Afghanistan's energy sector and the first long-term public-private partnership in the country.

Despite these developments, Afghanistan continues to face challenges in achieving energy security. The country has a vast unmet need for energy, with only 34% of Afghans having access to grid electricity, and those who do experience frequent blackouts. Insufficient infrastructure investment and an underdeveloped and fragmented system for transmitting and distributing power contribute to the energy deficit.

Furthermore, security concerns, undeveloped infrastructure, technical issues, and corruption have hindered the development of Afghanistan's energy sector. The country needs to address these obstacles to attract high-scale international investors and effectively exploit its hydrocarbon reserves.

Overall, Afghanistan's natural gas reserves play a crucial role in the country's energy security, and further development of these resources has the potential to significantly improve Afghanistan's energy situation.

The economic impact of natural gas in Afghanistan

Afghanistan has an abundance of natural resources, including natural gas. The economic impact of natural gas in the country has been significant, with the potential to drive further development and growth.

Firstly, Afghanistan's natural gas reserves play a crucial role in meeting the country's energy needs. With a vast unmet need for energy, Afghanistan has turned to its substantial natural gas reserves to boost domestic power generation. In 2020, the country began extracting natural gas from a newly discovered field in the northern Jawzjan province, marking the first time in four decades that natural gas was being extracted locally. This development is expected to provide an uninterrupted gas supply to Jawzjan and the neighbouring Balkh provinces.

Secondly, the extraction and utilisation of natural gas have economic implications for Afghanistan's trade and exports. The country's geographical position as a transit route for energy exports, including natural gas, from Central Asia to South Asia and the Arabian Sea, is significant. The potential construction of the Trans-Afghanistan Pipeline gas pipeline further underscores Afghanistan's strategic role in energy transit.

Thirdly, the development of Afghanistan's natural gas sector has the potential to attract foreign investment and contribute to economic growth. The Mazar-e-Sharif project, for example, is a pioneering investment led by the IFC and private investors in a gas-to-power plant. This project demonstrates the viability of long-term public-private partnerships in the country's energy sector, even in the context of conflict.

Fourthly, the natural gas industry has the potential to create employment opportunities for Afghans. The development of the Mazar-e-Sharif project, for instance, is expected to generate about 200 direct jobs and many more indirect jobs.

Finally, the economic impact of natural gas in Afghanistan extends to government revenues and royalties. The extraction and distribution of natural gas in Jawzjan province, for instance, have the potential to earn the government up to $8.5 million per year, according to Feroz Bashari, head of the government's information centre.

In conclusion, the economic impact of natural gas in Afghanistan is far-reaching. It contributes to energy security, trade, foreign investment, employment, and government revenues. The development of this sector holds the key to driving Afghanistan's economic growth and improving the country's overall economic outlook.

Afghanistan's natural gas in comparison to other countries

Afghanistan has substantial natural gas reserves of its own, with an estimated 16 trillion cubic feet of natural gas. However, the country has faced challenges in infrastructure and power distribution, resulting in frequent blackouts and a reliance on imported power. In recent years, Afghanistan has made strides towards utilising its natural gas resources, commencing gas extraction in the northern Jawzjan province in 2020. This development is expected to generate revenue, create employment opportunities, and ensure a stable gas supply to the region.

In comparison, several other countries possess significantly larger natural gas reserves. As of 2021, the three countries with the most proven gas reserves were Iran, Russia, and Qatar. Russia has the biggest natural gas reserves globally, with approximately 37.4 trillion cubic meters, or around 20% of the world's total. Iran ranks second, with 17% of the total reserves, while Qatar holds just over 13%. The United States, despite being the largest producer and consumer of natural gas, has the fourth-largest reserves, with enough natural gas to last at least another 60 years. Saudi Arabia possesses the fifth-largest natural gas reserves, primarily located in the Persian Gulf.

The United Arab Emirates consistently ranks among the top countries for natural gas reserves, with sources placing it within the top six. Other countries with notable natural gas reserves include Trinidad and Tobago, Equatorial Guinea, Turkmenistan, and the Congo.

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