The 'Energy Mix' in Iraq

Iraq saw its domestic demand for oil rise to over 700,000 barrels per day (bpd) in 2011, up from only 450,000 bpd in 2003. Neglect of refining infrastructure means that most plants are only able to run at around 50 percent capacity, forcing Iraq to import refined products from neighbouring countries. The US Department of Energy estimates that in 2011 Iraq relied on imports for a third of its petroleum consumption and a fifth of its liquefied petroleum gas (LPG).

According to the International Energy Agency (IEA) in 2012, natural gas can play a much more important role in Iraq's future than it has previously, reducing the dominance of oil in the domestic energy mix. In order to achieve this, the country's associated gas must be captured and processed, rather than flared. But according to their projects associated gas alone will not satisfy Iraq's projected demand, estimated at 70 billion cubic metres (bcm) by 2035. Therefore Iraq's gas balance and the availability of surplus gas for export will depend on creating incentives to develop the non-associated gas reserves. In the meantime the growing demand means that the country must rely on power imports in the short term.

However while Iraq is seeking to export the natural gas it produces, because of rising and unsatisfied demand the country suffers from chronic power cuts that led to the Minister of Electricity standing down in 2010. In 2012, for example, the average Iraqi household received power for only 7.6 hours per day (a calculation which takes into account homes in the semi-autonomous region of Iraqi Kurdistan, where citizens have access to electricity around the clock). Many households rely on household or neighbourhood generators for power.

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