Skyscape and airplane wing

Shortfalls of Environment, Social, and Governance Portfolios

| By Alexander Haidar | 

Environmental, Social, and Governance (ESG) focused policies are intended to promote sustainable and socially responsible practices among businesses and organizations. These policies aim to achieve certain goals, such as reducing carbon emissions, promoting social equality, or increasing government transparency and accountability. While the rise of Environmental, Social, and Governance (ESG) investments in recent years has largely promoted sustainability and ethical practices in businesses, ESG securities and portfolios pose a greater unique risk to investors. In particular, the recent collapse of Silicon Valley Bank (SVB) has generated questions as to whether or not proper risk assessment went into the active management of ESG funds.

The idea of investing in policy-specific securities or portfolios is not new; Impax Asset Management Funds has been divesting from the fossil fuel, tobacco, weapons, and other industries for over 50 years through its Sustainable Allocation Fund. However, the 21st Century has brought in a new wave of wide-spread social unrest over climate change. Considering that roughly half of the carbon emissions since 1751 have been produced in the last 30 years, the real-world impacts of climate change have likewise accelerated peoples’ reaction to call on their governments to make meaningful changes.

Perhaps one of the most influential policies in recent years which has spurred larger participation in ESG markets was the 2015 Paris Climate Agreement. Adopted by over 190 countries in the United Nations Framework Convention on Climate Change, it aimed to limit global warming to well below 2°C above pre-industrial levels through a series of cooperative policies and regulations on carbon emissions. This agreement prompted investors around the world to fund companies that support this goal, essentially incentivizing the monetary commodification of carbon emissions through financial markets. In Europe, this led to the establishment of a cap-and-trade system of carbon credits whereby firms bid on emissions allowances. This top-down approach essentially forces firms to assume a monetary assessment of the social impact of their emissions, thereby incentivizing less carbon-polluting industries.

In the United States, the results of the Paris Climate Agreement have manifested in the private sector through the apparent demand in the market for companies which promote sustainability. According to a working paper published by researchers at Harvard Business School, the number of firms in the S&P 500 which chose to publish ESG reports had increased from 35% in 2010 to 86% by 2021. The United States has pledged and recommitted as of August 2022 to its Nationally Determined Contributions (NDC’s) to reduce Greenhouse gas emissions by 50% of 2005 levels by 2030, with a net zero target of 2050. In an analysis of the impact of policies and actions in the United States by the independent Climate Action Tracker, the Inflation Reduction Act was noted as the “most ambitious and potentially impactful climate policy in US history” considering its reliance on large-scale government investment in green industries. While this is a short-term solution to spur investment and growth in primarily sustainable sectors, it naturally lacks the full scope to respond to worldwide climate change.

Large-scale investment into certain areas in the economy such as solar, wind, and electric vehicles and battery storage aims to generate a technological competition in the private sector for the best, most cost-effective sustainable solutions. Unfortunately, this means that relatively young and very risky technologies and markets can receive exposure to large amounts of capital investment. Since ESG portfolios are looking to access the growth potential of new technologies, it is not surprising that many invested heavily in one of a handful of institutions like SVB which bankrolls many tech start-ups. Among the investors most exposed were the Cromwell Tran Sustainable Focus Fund (held 4.39% of portfolio in SVB) and Morgan Stanley Institutional Fund Global Concentrated Portfolio Class R6 (held 4.09% of portfolio in SVB), according to data from Morningstar. Since environmentally sustainable portfolios naturally are limited in terms of  their diversification opportunities, the sector as a whole becomes more susceptible to the unique risk of each individual investment.

One of the market risks associated with ESG investments is their elasticity to policy changes. As the three sectors which comprise ESG portfolios are often related in terms of fiscal policy, these investments tend to be more volatile based on potential changes in political leadership. This issue has recently come to the forefront of American politics as the U.S. The Department of Labor’s (DOL) 2021 decision, supported by President Biden, encouraged but not required firms to account for ESG factors in retirement portfolios rather than aiming for maximum possible returns. This faced serious backlash in Congress, where both chambers passed legislation to block this rule. This legislation, supported by the GOP and a few moderate Democrats, claimed that incentivizing ESG investment via retirement funds would jeopardize returns on individuals’ retirement plans. This was likewise opposed by the White House, with President Biden issuing the first veto of his Presidency in March, 2023. Biden’s veto is unlikely to be overruled by Congress as a ⅔ majority would be almost impossible to obtain in either chamber. Nevertheless, representatives from mostly republican states have begun to propose state bills counteracting ESG investment, with 25 states’ attorney generals also filing lawsuits against the DOL for “overstepping its statutory authority.” Either way, as both parties begin to look toward the 2024 Elections, it is clear that ESG investment policy will become subject to more political contention, increasing the markets potential volatility.

ESG investments are gaining popularity, driven by top-down policies such as the Paris Agreement, the Inflation Reduction Act or Cap-and-Trade. However, these investments pose new types of fiscal risks to investors which need to be taken into account when assessing total portfolio risk. The lack of standardization and transparency in ESG data, the potential for underperformance, the political nature of ESG criteria, and the potential conflict between ESG objectives and financial performance are all important factors investors should consider when investing in ESG portfolios/bonds. While ESG investments have the growth potential to promote sustainability and ethical practices, investors should recognize individual sectors’ youth and future political volatility as fundamental risks to the market itself.

EU Flag

UK, EU propose New Framework on Northern Ireland Border

| By Alexander Haidar |

On February 27, 2023 the British Prime Minister, Rishi Sunak, and President of the European Commission, Ursula von der Leyen announced a tentative post-Brexit trade agreement concerning Northern Ireland.[i] The existing Northern Ireland Protocol is an agreement which came into effect in January of 2021 as part of the Brexit negotiations between the European Union (EU) and the United Kingdom (UK) to address trade on the border between Northern Ireland (a part of the UK) and the Republic of Ireland (an EU member state). The Protocol sought to prevent the need for a ‘hard border’ between Northern Ireland and the Republic of Ireland by essentially keeping Northern Ireland within the EU’s single market for goods and maintaining regulatory alignment with EU rules.[ii] Since implemented, goods entering Northern Ireland’s ports from Great Britain (no longer part of the EU) became subject to checks and controls to ensure that they comply with EU standards. The Protocol also included provisions for the Northern Ireland Assembly to vote on whether to continue the arrangements after four years, with the possibility of extending them for another four years if both the EU and UK agree.[iii]

The Northern Ireland Protocol has been a source of controversy and tension between the UK and the EU, as some pro-unionist political parties such as the Democratic Unionist Party (DUP) in Northern Ireland felt that it created barriers to trading and undermined Northern Ireland’s position within the UK. There have also been difficulties in implementing the Protocol, with some businesses experiencing disruption and delays in trade between Great Britain and Northern Ireland.[iv] Overall, the Northern Ireland Protocol was a complex and important agreement which marked a milestone of the Brexit process, however, it will likely be replaced by legislation based on the Windsor Framework. The deal outlined by the UK and the EU is the culmination of months of negotiations between both parties to find a new approach to post-Brexit international trade policy across the only UK-EU land border. During a joint press conference at Windsor castle, both leaders announced their hope that this new approach will result in an effective solution to the post-Brexit trade disputes in Northern Ireland:

“This new Framework will allow us to begin a new chapter. It provides for long-lasting solutions that both of us are confident will work for all people and businesses in Northern Ireland.”[v]

 – EU President von der Leyen

“Today’s agreement is about preserving that delicate balance and charting a new way forward for the people of Northern Ireland.”[vi]

– UK Prime Minister Sunak

At the press conference, Sunak explained the three main achievements of the revised protocol as follows: “Delivering smooth flowing trade within the whole United Kingdom; Protecting Northern Ireland’s place in our Union; Safeguarding sovereignty for the people of Northern Ireland.”[vii] In this plan, goods traveling from the UK with a final destination of Northern Ireland will travel through a new “green lane,” while those with a final destination of Ireland (EU) will travel through a “red lane” where EU checks and regulations will be followed. It will also allow British residents of Northern Ireland to forgo the customs paperwork previously imposed on them, while also allowing them to completely access British products and services. Finally, it will equip the democratically elected Northern Ireland Assembly with the ability to “pull an emergency brake” if businesses in Northern Ireland are negatively impacted from EU regulations.

The land border between Northern Ireland and the Republic of Ireland is particularly important for trade. Being relatively porous, with many small roads and crossings that are used by individuals and businesses to move goods and people between the two countries, the border allows for goods and services to be transferred from the UK into the EU fairly easily, which is particularly important for sectors such as agriculture and manufacturing that rely on just-in-time supply chains. Additionally, Northern Ireland’s ports, particularly the port of Belfast, facilitate trade with the rest of the UK and beyond. The port of Belfast is a major hub for imports and exports, particularly in the areas of agri-food and manufacturing.[viii]

The DUP has yet to officially release a comment on the content of the Windsor Framework but indicated that they will be reviewing it carefully.[ix] As it also remains yet to be passed by the British parliament, the true impact of the Windsor Framework on trade between Ireland and the UK will depend on the specific trade agreements and laws negotiated under this new approach. In particular, the UK may seek to negotiate new trade deals that compete with existing trade agreements between Ireland and other countries to benefit from the removal of regulatory barriers for goods traveling to Northern Ireland from the UK. The UK’s new direction towards maintaining national security while also protecting trade routes to the EU via Northern Ireland has yet to be implemented and tested, however, it could lead to a significant shift in the UK’s approach to trade with EU countries.


[i] “The Windsor Framework: A New Way Forward.” GOV.UK, Controller of His Majesty’s Stationery Office, Feb. 2023, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/974907/EYFS_framework_-_March_2021.pdf.

[ii] Piper, Elizabeth, et al. “Explainer: What Is the Northern Ireland Protocol?” Edited by Janet Lawrence and Christina Fincher, Reuters, Thomson Reuters, 26 Feb. 2023, https://www.reuters.com/world/uk/talks-post-brexit-northern-ireland-trade-edge-closer-deal-2023-02-20/.

[iii] “Democratic Consent Mechanism.” Northern Ireland Assembly, 2023 Northern Ireland Assembly Commission, 2021, http://www.niassembly.gov.uk/assembly-business/brexit-and-beyond/democratic-consent-mechanism/.

[iv] Ferguson, Amanda. “Northern Ireland Business Groups Welcome Brexit Deal ‘Certainty’.” Reuters, Thomson Reuters, 27 Feb. 2023, https://www.reuters.com/world/uk/northern-ireland-business-groups-welcome-brexit-deal-certainty-2023-02-27/.

[v] “Statement by President Von Der Leyen at the Joint Press Conference with UK Prime Minister Sunak.” European Commission, European Union, 27 Feb. 2023, https://ec.europa.eu/commission/presscorner/detail/en/statement_23_1270.

[vi] “PM Speech on the Windsor Framework: February 2023.” GOV.UK, His Majesty’s Government, 27 Feb. 2023, https://www.gov.uk/government/speeches/pm-statement-to-the-house-of-commons-27-feb-2023.

[vii] Ibid.

[viii] Carswell, Simon. “Belfast Port Reports Surge in Trade Due to Fewer Post-Brexit Checks.” The Irish Times, The Irish Times, 1 Feb. 2022, https://www.irishtimes.com/business/belfast-port-reports-surge-in-trade-due-to-fewer-post-brexit-checks-1.4791231.

[ix] Haplin, Padraic, et al. “Northern Ireland’s DUP Leader: We Are Studying New Brexit Deal Texts.” Reuters, Thomson Reuters, 27 Feb. 2023, https://www.usnews.com/news/world/articles/2023-02-27/northern-irelands-dup-leader-we-are-studying-new-brexit-deal-texts.

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Positive and Negative Implications of NLP Artificial Intelligence

| By Alexander Haidar |

Artificial Intelligence (AI) has been a rapidly evolving technological innovation of the 21st century whose full potential has yet to be realized. Recent advancements in machine learning has led to an AI model developed by researchers at MIT that can predict which patients are at high risk of developing lung cancer up to five years before a diagnosis would normally be made.[1] Likewise, AI has been used in the field of nuclear material studies to provide a streamlined data collection and analysis process.[2] While it has a long way to go in terms of being able to provide unique and new knowledge, AI has already shown to be a significantly efficient data-processing tool.

Recent popularity in Natural Language Processing (NLP) AI such as OpenAI’s ChaptGPT (recently acquired by Microsoft) has sparked new interests, as well as concerns about the future of a world dominated by artificial intelligence. NLP models like ChatGPT can be useful tools to process input information and provide a comprehensive explanation, analysis, or conclusion in a linguistically attractive medium which we understand easily (ie. full sentences or paragraphs). GPT stands for Generative, Pre-trained, Transformer, meaning that the software is capable of generating new content based on its database of information, learning and adapting to human language.[3]

NLP models have recently been presenting an unforeseen risk that such written responses may produce biased or inaccurate results if the software is not properly trained or validated. Reports of offensive language and racially biased speech in ChatGPT recently prompted an OpenAI blog post outlining their AI training process, as well as offering “a portion of guidelines pertaining to political and controversial topics.”[4] In order to ensure that NLP models are used in a responsible and ethical manner, software developers such as OpenAI must remain vigilant in reviewing its software training, while also allowing for users to detect and indicate when they find potentially harmful biases or hate speech.

ChatGPT’s growing popularity has also led to a new debate on the usage of AI in school settings. Many teachers’ and professors’ initial reactions have been to dismiss what they see as a way for students to avoid putting in the effort for assignments — a valid and proven concern as it essentially can write reading summaries, analyses, and essays without the student being familiar with the material. ChatGPT writing has even made it all the way to the United States House of Representatives where Massachusetts Congressman Jake Auchincloss (D – MA 4th Congressional District) gave the first-ever speech on the floor written by AI.[5]

While AI is expected to create new job opportunities in fields such as software engineering, data science, and machine learning, it may also lead to displacement of workers in other industries as automation and AI technology increasingly take over tasks that were previously performed by humans. Jobs which require significant human interaction and a high degree of emotional intelligence such as healthcare, education, and the arts are less likely to be automated. These industries therefore have the opportunity to benefit from NLP AI, as discussed by four Boston College (B.C.) professors at a forum organized by the Institute for the Liberal Arts. One presenter who runs the first-year writing program at B.C. alluded to the opportunities of using ChatGPT as a teaching tool during the writing process. She also proposed a new pedagogical approach whereby AI could be used to enhance and change the way writing is taught and appreciated; now that thematic or analytical essay writing can be easily re-produced by AI, professors should now be encouraged to focus on making the process of writing engaging using new approaches.

While there is the fear of AI displacing human workers from labor-intensive industries, the recent popularity and widespread usage of NLP has indicated that problem-solving, critical thinking, and communication skills are what AI cannot replace. Of course, calibrating NLP to be sensitive to complex human-formed concepts like race or sexuality will require a thorough and dynamic process to prevent harmful ideas from propagating through AI. If used properly, NLP will likely become implemented as a tool towards enhancing unreplicatable human capabilities.


[1] Ouyang, Alex. “MIT Researchers Develop an AI Model That Can Detect Future Lung Cancer Risk.” MIT News, Massachusetts Institute of Technology, 20 Jan. 2023, https://news.mit.edu/2023/ai-model-can-detect-future-lung-cancer-0120.

[2] Dean, Kristen Mally. “Artificial Intelligence Reframes Nuclear Material Studies.” Tech Xplore – Technology and Engineering News, Argonne National Laboratory, 16 Feb. 2023, https://techxplore.com/news/2023-02-artificial-intelligence-reframes-nuclear-material.html.

[3] Institute for the Liberal Arts, and Center for Teaching Excellence. “Chat GPT: Implications for Teaching and Learning.” Youtube. Boston, MA, Boston College, https://www.youtube.com/watch?v=GUnq9EihSt4&t=12s&ab_channel=InstitutefortheLiberalArtsatBostonCollege. Accessed 21 Feb. 2023.

[4] “How Should AI Systems Behave, and Who Should Decide?” OpenAI, OpenAI, 16 Feb. 2023, https://openai.com/blog/how-should-ai-systems-behave/.

[5] LeBlanc, Steve. “Massachusetts Congressman Reads AI-Generated Speech on House Floor.” WBUR News, WBUR, 26 Jan. 2023, https://www.wbur.org/news/2023/01/26/auchincloss-chatjpt-ai-artificial-intelligence.

 

Rescuers carry a woman after she was evacuated from under a collapsed building following an earthquake in Kahramanmaras, Turkey, February 7, 2023. Photo Credit: REUTERS/Suhaib Salem

Massive Earthquake in Turkey and Syria; What happens next?  

| By Alexander Haidar |

On February 6, 2023, magnitude 7.8 earthquakes struck in the southern-Turkish city of Gaziantep, causing over 100 aftershocks of magnitude 4 or higher between Türkiye and Syria. Initial estimates suggest upwards of 10,000 people have been killed, with numbers expected to rise as many more are still trapped under debris of collapsed buildings. Several shocking videos released on social media sites show Turkish and Syrian citizens surveying the preliminary damage as aftershocks cause entire buildings to collapse in on themselves. Turkish President Recep Tayyip Erdogan declared a 3 month state-of-emergency in the 10 affected regions and mobilized 25,000 search and rescue personnel.

Seascape sunset off the coast of Lebanon, photo by Alexander Haidar

Lebanon Energy Market: Outlook and Opportunities

| By Alexander Haidar |

Contents

  • Introduction
  • Political Situation
  • Energy Sector Background
  • IMF Bailout Energy Sector Provisions
  • Agreement on Maritime Borders with the State of Israel
  • Existing Sustainable Energy in Lebanon
  • Conclusion

Introduction

Over the course of the past decade, the economic situation in Lebanon has made life increasingly difficult for its population of roughly 6 million people.[1] Within the last few years in particular, Lebanon has gone from seeing a widespread social movement against the broken system of government; to dealing with the Covid-19 pandemic; to an explosion of roughly 2,750 tons of Ammonium Nitrate in its capital city of Beirut; to present-day mass inflation and power-shortages.[2]Needless to say, the Lebanese people have had to remain resilient in the face of unmatched uncertainty. Today, the cumulative impact of the economic crisis has seen life-savings, retirement-funds, and salaries paid in LL lose upwards of 90% of their value. Meanwhile, the US Dollar shortage means that dollar-backed accounts have withdrawal restrictions, causing some desperate citizens to hold bank employees hostage with guns to demand access to their own money.[3] Additionally, the war in Ukraine the country that   accounted for 80% of Lebanon’s wheat import market in 2020— has been dangerously exacerbating the diminishing levels of wheat stores left after the destruction of grain silos in the Beirut Port.[4] Currently, the Lebanese government has secured a $150 million World Bank loan to cover short-term wheat expenses, and likewise has been engaging in talks with the International Monetary Fund (IMF) over a roughly $3 billion, four-year ‘Extended Fund Arrangement’ to sustainably rebuild and strengthen the economy.[5]However, the stipulations for this economic assistance are contingent on the completion of a series of governmental actions and reforms, many of which have yet to take place. Despite this reality, these compounding crises have the opportunity to pave the way for a future revitalization of the Lebanese economy centered around the energy sector.

 

Political Situation

The reality of hostility between the US and Iranian-backed parties alike has resulted in a political stalemate whereby the Lebanese government is a medium of international proxies. In late November of 2022, a delegation of Democratic U.S. Congress members:   Mark Takano (California), Katie Porter (California), and Colin Allred (Texas), met with the Caretaker Prime Minister: Najib Mikati, urging that the Parliament elect a President who will form a productive and effective government.[6] This comes as the parliament has, for the eighth time, failed to reach a consensus on a new leader after former President Michel Aoun announced he would be stepping down at the end of October.[7]

The inability to reach a decision since then is largely due to a lack of consensus on a candidate capable of appeasing the security demands of the Iranian-backed Hezbollah and Free Patriotic Movement bloc while also building a stronger democratic Lebanese Republic with independent, non-corrupt institutions. This has manifested itself in blank papers receiving more ‘votes’  than the next most popular candidate, a silent way in which MP’s have been protesting not only the choice of candidates, but the sectarian system itself.[8] Amongst other mandated religious divisions of power, the confessional system of democracy requires that the President of the Republic be a Maronite Christian. Until a leader, one capable of uniting opposing political parties and governing for the common interests of national security, economic stability, and respect for independent judicial processes is agreed upon by all parties, the living situation for Lebanese citizens will not be able to improve. One such test of the Lebanese people’s trust in the judicial system is the investigation of the 2020 Beirut Blast which has yet to be decided as political pressure from all stakeholders has been mounting.

In October of 2022, the Iranian government was ready to offer 600,000 tonnes of fuel to relieve the high fuel prices in the country as economic assistance. However, the United States prevented this from happening, indicating that the Lebanese government would face sanctions were it to accept the gift.[9] Previously, Iran has sent fuel directly to Hezbollah during the fuel shortage, avoiding U.S. sanctions by first shipping it to Syria, in a bid to garner support for their regional ally. Meanwhile, the United States has been attempting to counter Iranian economic influence and regional hegemony encroaching in Lebanon by funding US-supported social programs designed to improve the lives of Lebanese, likewise building support amongst Lebanese people. The Innovation for Affordable and Renewable Energy for All (INARA) plan put forth by the United States Agency for International Development (USAID) looks to allocate $29 million to “deliver reliable energy across all regions of Lebanon.”[10] Through USAID, the United States has supported “41 solar energy projects to date, benefitting 460,000 residents in 70 Lebanese towns and villages.” Additionally, USAID announced in November of 2022 that an additional $8.5 million in funding will be provided to build 22 solar powered water pumping projects, impacting “more than 150 towns and villages and benefiting over half a million Lebanese citizens and refugees.”[11] It is clear through each partys’ attempt to support the Lebanese people they each have a vested interest in maintaining political and economic influence in the country.

 

Energy Sector Background

The energy sector in Lebanon is operated through a vertically integrated system of utility, meaning electricity needs are primarily met through one company: Electricté du Liban (EDL).[12]   Founded by Decree No. 16878 of 1964, EDL was initially tasked with being responsible for the “generation, transmission, and distribution of electrical energy in Lebanon.”[13] As an autonomous public institution, EDL operates within the domain of the Ministry of Energy and Water (MoEW). Law No. 20 of 1966, subsequently amended by Law No. 247 of 2000, founded and tasked MoEW with “proposing comprehensive rules for the organization of services relating to the production, transmission and distribution of electrical energy.”[14] Its thermal plants operating on imported oil control more than 90% of the official Lebanese electricity sector, however, an undermaintained electric grid and consistently unreliable power generating capacities have led to a severe disparity between the company’s energy production and real energy demands, consequently leading to blackouts and energy rationing.[15] In 2012, a contract was signed between EDL and the Turkish power firm Karpowership to provide two ‘Powerships’ totaling 404MW (Mega Watts) in production capacity, covering 25% of Lebanese electricity needs.[16] However, this contract was terminated in May of 2021 when the government proved incapable of paying for the previous 18 months worth of electricity.[17]

Because of the failure of the Lebanese national energy provider  to cover a 1 Gigawatt gap in power supply and demand, most people rely on a highly unregulated network of privately-owned, diesel-powered generators.[18] Generators operate on an individual basis (one person in a community who can afford a generator and sells it back to other individuals, often with significantly high margins of profit), or municipal basis (a local municipality acquires a generator and sells energy back to all members in the community, usually, but not always, at a more regulated price). Consortiums of generator owners in Lebanon have therefore formed a new class of mafia-like businessmen empowered by corrupt public officials who dictate energy supply and prices.[19] Production and sale of energy without state-approved contracts in Lebanon is technically illegal under the jurisdiction of Law No. 462.[20] However, as generators are necessary to make up the significant energy supply-demand disparity, they are an unquestioned exception.

Not operating within any uniform network of system operators, the entire private energy market in Lebanon is open to all kinds of mismanagement and profiteering. First and foremost, this comes from the limited use of government metering to monitor electricity consumption, with private energy providers often opting for highly lucrative flat rate generator subscriptions. In November of 2021, the official prices as set forth by MoEW for those living in city areas was a fixed cost of LL30,000 (LL = Lebanese Liras[21]) for a 5 amps subscription or LL60,000 for 10 amps subscription, plus LL5,200 per kilowatt hour.[22] Lebanese citizens have little agency over who can offer them at least a few hours of stable electricity, whether or not they meter electricity consumption. As such, they cannot be held accountable for playing into an unregulated market when material needs, ie. cooking food and 50ºC+ summer heat, take precedence. Following the November decision, the spokesperson for the syndicate of private generator owners, Abdo Saadeh, demanded a minimum of LL 5,900 per kilowatt hour, plus a fixed charge of LL50,000 and LL100,000 for 5 amps and 10 amps, respectively.[23] A leading French newspaper in Lebanon, L’Orient Le Jour, interviewed Beirut residents from the same area who each reported paying arbitrarily decided amounts for unmetered 5 amp subscriptions, with monthly totals ranging from LL550,000 and LL2,000,000.[24] As of November 29 2022, L’Orient Le Jour reported a government-updated, per kilowatt hour price of electricity produced by private generators to be LL17,585 in cities and LL19,343 in rural areas and those 700 meters above sea level.[25]

Roughly 40 percent of the country’s public debt since 1992 can be attributed to the crisis in the energy sector.[26] Needless to say, the dire economic and social situation in Lebanon is inherently linked to the energy crisis which is inherently linked to EDL. An effort to support equal competition was attempted in 2002 by Law No. 462, which provided that so long as an energy provider satisfies the conditions of a National Regulator for the Electricity Sector Organization (NRESO), they are equally eligible for state energy contracts.[27] However, the Lebanese NRESO was never even formed, let alone approved any new energy contracts. Electricity metering is also facing a dire situation following the 2020 explosion in Beirut port where EDL’s data center for billing systems as well as customer meters laboratory were destroyed.[28] In March of 2022, the Lebanese Cabinet approved a new plan to establish an independent National Regulating Authority (NRA) as well as to implement several upgrades to the electricity sector in a bid to secure the IMF bailout.[29] As promising as this may be, similar efforts previously attempted have failed due to private interests of government personnel hindering effective implementation. Like previous attempts, it is possible that the new NRA would become a medium of this environment of regulatory capture in Lebanon.

The MoEW has put forth multiple energy sector plans in the past 12 years: Policy Paper for the Energy Sector (2010), Energy Sector Salvation Plan (2017), and the Updated Policy Paper for the Electricity Sector (2019), however, none of these papers discussed in any capacity the adoption of renewable energy sources being a potential solution to energy insecurity.[30] Many studies since, as pointed out in a letter directed at the MoEW from the Executive Director of Greenpeace MENA, have “shown the need for laying renewable energy, namely, solar power, as the cornerstone of any plan seeking to develop or save the sector from this deep-rooted crisis in Lebanon.”[31]The reality of the broken electricity sector in Lebanon means that renewable alternatives could offer a new solution to present energy obstacles.

IMF Bailout Energy Sector Provisions

In April of 2021, Lebanese and IMF authorities reached a “staff level” agreement on a potential financing deal, which aims to “restore growth and financial stability, strengthen governance and transparency, and increase social and reconstruction spending” in the Lebanese Republic.[32] Following the visit of senior IMF officials to Lebanon in September of 2022, a press release indicated the shortfallings of the Lebanese government to implement the agreed upon economic reforms on which the bailout is contingent. The list of yet-to-be-completed actions included the approval of 2022 and 2023 budgets, implementing capital control measures and likewise, financial sector rehabilitation strategies. The release also pointed out that while the recent Lebanese Parliament’s Banking Secrecy Law “contained some positive steps, it fell short of the changes needed to bring it in line with the best international practices.”[33]

Shortly after this visit and the statement by IMF officials, the Parliament finally passed the annual budget which remains in a deficit of 11 trillion LL ($1.2 billion). As the vote occurred, retired military officials voiced their frustrations with the inaction towards a solution for the financial crisis.[34] The new budget looks to set the official exchange rate to 15,000LL to $1, however, the actual market rate is closer to 42,000LL to $1.[35] The IMF also stipulates that financial sector reforms must include a criminal audit of Central Bank accounts as well as a restructuring of public debt. Even if the IMF loan is approved, the $3 billion “Extended Fund Arrangement” will be a long way from making up for the estimated $80 billion in losses; this will require a fundamental reform which focuses on strengthening the republic’s financial, judicial, and democratic institutions.[36] The IMF also stipulates that “state-owned enterprises, particularly in the energy sector” be reformed to provide the country with a “state-owned enterprises framework to improve governance and oversight [which] will help [to] reduce hemorrhage of scarce government resources.”[37]

With the opportunity of a financial bailout, the Lebanese Ministry has the opportunity to take advantage of international funding to pursue economically and environmentally sustainable energy solutions. Since then, in a new policy statement issued by the MoEW in March, 2022: Setting Lebanon’s Electricity Sector on a Sustainable Growth Path, the primary objective is identified as “ensuring reliable, affordable, and sustainable (24/7) electricity services across Lebanon in an efficient, fiscally balanced, and environmentally friendly manner.” Furthermore, it put forth the following simplified Action Plan approved by the Lebanese cabinet:

Short–term, <1 year

  • Secure electricity imports from Jordan through an agreement with Jordan to import an average of 200 MW surplus Jordanian electricity.
  • Secure gas imports from Egypt through the Lebanese portion of the Arab Gas Pipeline, at a rate of around 650 million cubic meters per year over a ten-year agreement, allowing the generation of an average of approximately 400 MW in the Deir Amarnatural gas plant.

Short–to Medium–term, 1‐2 years

  • Provide natural gas to existing plants and build a gas‐fired combined cycle power plant at Zahrani of 825 MW capacity (Zahrani II) financed by possibly using IMF’s extra SDR allocation, with possible subsequent (built‐in) divestment to the private sector after commissioning.
  • Temporary generation capacity at Deir Amar of up to 520 MW until the permanent Deir Amar II plant is constructed and commissioned. Active market sounding efforts have already identified interests from Egypt, US and others to supply temporary infrastructure late 2022 early 2023.
  • Implement solar independent power producing stations projects; including a pilot program aimed at deploying 12 solar farms with a total generation capacity of 180 MW (15 MW per solar farm) throughout Lebanon in 2023.
  • Introduce on‐grid solar energy; MoEW through the LCEC is piloting a project aiming to deploy solar farms throughout Lebanon with a total generation capacity of 180 MW in 2023 divided into 15 MW per solar farm.
  • Develop wind farms through power purchase agreements signed to establish three wind energy projects with a total capacity of 226 MW in 2024 in

Medium–to Long‐term, 3‐5 years

  • Renewable Energy scale‐up of utility‐scale RE projects (solar, wind and hydropower) towards an objective of reaching at least 30 percent of generation capacity from renewable sources in the energy mix by 2030, as per Électricité de France’s Least Cost Generation Plan.
  • Decommission the outdated steam turbine plants that cannot be switched to natural gas in Zouk and Jieh once new power plants have been installed.
  • Launch competitive procurement program for the design, construction and operation of a gas‐fired combined cycle power plant in Deir Amar, using potential Egyptian gas supply or international Liquefied Natural Gas (LNG) gasified in Jordan and channeled to Deir Amar.[38]

 

Agreement on Maritime Borders with the State of Israel

The recent U.S.-brokered treaty recognizing the maritime borders between Lebanon and Israel offers another potential path to economic recovery. The country has previously remained at a stalemate with regards to any chance of exploring its potentially large off-shore natural gas fields due to the Lebanese government decision not to recognize the State of Israel’s authority over its land and Exclusive Economic Zone.[39] I n a Press Release by U.S. Secretary of State Anthony Blinken, the State Department considered the agreement between the two nations as a “breakthrough” which could promise “prosperity and stability” by providing “vital energy” resources to the both parties.[40] Since the announcement in October of 2022, France’s TotalEnergies and its partner, the Italian state hydrocarbon authority ENI, have announced that they will begin an exploration phase in Block 9 of the Qana natural gas field on the Lebanese side of the maritime border.[41] The “largest independent natural gas producer in Russia,”[42] Novatek had expressed earlier interest in building an oil refinery, however, this offer has since been withdrawn, likely due to the intensification of sanctions against Russian entities since the start of the war in Ukraine.[43] Despite this, Prime Minister Mikati announced in an LBC (Lebanese Broadcasting Corporation) interview that the State of Qatar is looking to step in instead.[44] While projects are still in the initial stages, the hope is that Lebanon could eventually become an oil producing nation, capable of covering and potentially exceeding domestic demand, providing new revenue streams to help cover the nation’s debt. While this ambitious plan would require new productive political discourse and cooperation between Lebanese political parties, it could provide an alternative to the political elite from enacting the IMF’s strict requirements for a bailout, meanwhile reducing dependency on foreign assistance.

Existing Sustainable Energy in Lebanon

Even if political parties agree upon the financial and contractual terms of domestic oil production, there still remains the issue of Lebanon meeting its commitment to international climate change agreements. As part of the United Nations Sustainable Development Goals (SDGs),   even the largest oil-backed economies are adopting national strategies of diversification away from reliance on fossil fuels. In order to meet SDG 7: Affordable and Clean Energy, Lebanon committed to generating 30% of its energy from renewable sources by 2030.[45] Transitioning towards national oil production would require high costs, increased security concerns, and is known to have adverse environmental impacts. Meanwhile, Lebanon’s geography and climate allows for a relatively low-cost shift to renewable energy, particularly solar power with more than 300 days of sunlight a year.[46]  The truth remains that solar and other renewable energy sources are not only becoming cheaper as international demand and production rise around the world, but they are now seen as necessary for national security by countries such as the United States.[47] Given reliance on outdated electricity grids and highly polluting generators powered by foreign oil, expanding the renewable energy sector could provide a path towards Lebanese national energy security and independence.

There is already evidence that solar panels have been effective in small scale, individual installations on houses to cover extra energy needs. While the compounded reality of the economic and energy crises has meant that fuel for cars and generators is unaffordable to most of the population, sustainable alternatives have been filling the gaps where conventional systems previously faltered. The number of companies licensed to install solar panels in Lebanon has increased from 130 in 2020 to around 700 in 2022. Additionally, private installations of solar panels have added 350 MW of power capacity in the same time period.[48] While prices have been steadily decreasing as there is more competition amongst suppliers in the market, prices can range anywhere from around $2,000-$15,000 for a domestic installation, while commercial  building installations can cost up to $200,000.[49] According to the president of the Lebanese Center for Energy Conservation (LCEC), from 2021 to 2022, roughly $350 million has been privately invested in solar energy systems.[50] While private solar panel projects have been placing the fiscal responsibility on individuals and companies, plans for larger-scale, utility-style renewable energy projects have been undergoing planning and implementation processes across the country. So far, much of the success in this regard has started from smaller-scale municipally-operated solar installations, which could easily be connected to existing grids, replacing complete dependence on generators.[51] Prices remain unaffordable to much of the population, however, the rapid market expansion during the crises of the past two years has highlighted the potential for a large-scale energy transformation in the country, if capital control measures prove to be effective in stabilizing the economy.  It also points out how people’s perception of governmental ineffectiveness has transcended the financial burdens associated with installing solar panels; individuals looking to be more in control of their energy security are seeing a decentralized, solar-backed grid as a more feasible solution to the conventional national electricity grid. The rapid increase in demand for solar panels combined with the influx of foreign funding from the United States and others will establish a new and secure renewable energy job market, benefiting local economies and making clean energy a centerpoint of a Lebanese economic revival.

Conclusion

The energy sector in Lebanon still faces many challenges, chief among them being the remnants of systemic corruption which continues to infiltrate all aspects of daily life. Lack of regulation and trust of government institutions has resulted in a disorganized and decentralized electricity sector whereby consumers can easily be taken advantage of. Unlike many other highly urbanized populations, Lebanon lacks many of the necessary and modern social and public services needed to facilitate human development and economic growth. Likewise, the absence of a parliamentary consensus on the next President of the Republic means that the Lebanese state cannot function to its fullest extent to solve the energy crisis. In many cases, third-party actors and funders have so far proven to be more effective than the government at implementing many basic electricity and other infrastructure services. That being said, the effectiveness of these programs can be attributed to competent leadership, resource allocation, and oversight of the implementation which the government has been unable to provide.

The opportunity to tap into the natural gas reserves of the Leviathan field could not only provide a new revenue stream for the government if they are to be sold in international markets, but could possibly replace the existing diesel generator infrastructure to implement less polluting fuels. However, while the former implies that any gas will be found at all, the latter implies that the ‘generator mafia’ would still be in charge of energy production and distribution. On the other hand, while it would require serious international funding, updating existing or investing in new power generating facilities, such as domestically operated LNG power plants or LNG to power ships, could give EDL a chance to revitalize the centralized national grid. Given EDL’s history of severe mismanagement and corruption, this seems unlikely and far-fetched. Uniquely though, the clean energy sector growth that has been observed in the years since the financial crisis has indicated the potential of a nation-wide transition towards a decentralized, solar-backed grid.

Regardless of the types of fuel used, Lebanon presently has an opportunity to pursue a new national energy reality whereby proper sourcing, procurement, and management of energy resources could provide a path out of the economic crisis. Ultimately, Lebanon will now need to effectively implement and nationalize the sustainable development plan of the energy sector in order to ensure long-term energy security.  World Bank loans, IMF bailouts, fuel donations from Iran, or international development projects such as those advanced by USAID can often provide short-term relief and social improvements in isolated areas, however, they contribute to an unsustainable cycle of government reliance on foreign assistance to cover basic services. A comprehensive and pragmatic approach would require both development of the nation’s potential natural gas resources as a dependable source of revenue, while also advancing the renewables markets to build a sustainable twenty-first century economy.

 

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“Administrator Samantha Power Announces 22 New Solar-Powered Projects in Lebanon.” U.S. Embassy in Lebanon, U.S. Embassy in Lebanon, 9 Nov. 2022, https://lb.usembassy.gov/administrator-samantha-power-announces-22-new-solar-powered-projects-in-lebanon/. Accessed 12 Dec. 2022.

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Chehayeb, Kareem. “After Heist, Lebanese Activists Promise More Bank Raids.” AP NEWS, Associated Press, 15 Sept. 2022, https://apnews.com/article/middle-east-lebanon-beirut-dde578ae694865fc915f6832b7e8f201.

Chehayeb, Kareem. “Lebanon-Israel Deal a Landmark but with Limits, Experts Say.” AP NEWS, Associated Press, 3 Nov. 2022, https://apnews.com/article/middle-east-business-israel-lebanon-united-states-361853ca67b2a3dd5625a9dbe34fefd7.

Energy Compacts Registry. “SDG7 Energy Compact of the Republic of Lebanon.” United Nations, United Nations, 18 Sept. 2022, https://www.un.org/en/energycompacts/page/registry#Lebanon.

“Historic Breakthrough on the Israel-Lebanon Maritime Boundary |.” U.S. Department of State , Anthony J. Blinken, Secretary of State, 11 Oct. 2022, https://www.state.gov/historic-breakthrough-on-the-israel-lebanon-maritime-boundary/. Accessed 12 Dec. 2022.

Homsi, Nada. “IMF Bailout a Long Way off for Lebanon despite Passage of 2022 Budget.” The National, The National, 28 Sept. 2022, https://www.thenationalnews.com/mena/lebanon/2022/09/28/imf-bailout-a-long-way-off-for-lebanon-despite-passage-of-2022-budget/.

“IMF Reaches Staff-Level Agreement on Economic Policies with Lebanon for a Four-Year Extended Fund Facility.” IMF, International Monetary Fund, 7 Apr. 2022, https://www.imf.org/en/News/Articles/2022/04/07/pr22108-imf-reaches-agreement-on-economic-policies-with-lebanon-for-a-four-year-fund-facility. Accessed 12 Dec. 2022.

“IMF Staff Concludes Visit to Lebanon.” International Monetary Fund, International Monetary Fund, 21 Sept. 2022, https://www.imf.org/en/News/Articles/2022/09/21/pr22314-lebanon-imf-staff-concludes-visit-to-lebanon. Accessed 12 Dec. 2022.

Jalabi, Raya. “Lebanon’s Failing State Forces Unplanned Shift to Solar Power.” Financial Times, Financial Times Ltd., 10 Nov. 2022, https://www.ft.com/content/118fdb22-b51c-4579-b55b-a04625a33022.

Jbeili, Olga, et al. “Bailing out on Rights: The High Cost of an IMF Deal in Lebanon.” Edited by Marie-Noëlle AbiYaghi , Civil Society Knowledge Centre, Friedrich Ebert Foundation & Civil Society Knowledge Centre, Nov. 2022, https://civilsociety-centre.org/resource/bailing-out-rights-high-cost-imf-deal-lebanon.

Mroue, Bassem. “Total to Launch Sea Exploration after Lebanon-Israel Deal.” AP NEWS, Associated Press, 15 Nov. 2022, https://apnews.com/article/middle-east-business-israel-lebanon-mediterranean-sea-2967b8cd2114f61488c94e41787111bf.

Nakat, Ghiwa. “Open Letter to H.E. Dr. Walid Fayad, Minister of Energy and Water.” Greenpeace MENA, Greenpeace Middle East and North Africa 2022, 21 Oct. 2021, https://www.greenpeace.org/mena/en/open-letter-to-h-e-dr-walid-fayad-minister-of-energy-and-water/.

Prentis, Jamie. “Lebanon Passes Budget after Protest by Retired Servicemen.” The National, The National, 27 Sept. 2022, https://www.thenationalnews.com/mena/lebanon/2022/09/26/tension-outside-lebanese-parliament-as-mps-discuss-controversial-draft-budget/.

“Sanctions Strengthen Novatek’s LNG Role in Russia.” Edited by Tom Daly, Energy Intelligence , Energy Intelligence Group, 13 Sept. 2022, https://www.energyintel.com/00000183-2d3a-db0d-afb7-bd3a27270000.

Seip, Norman R. “Renewable Energy as a Key National Security Interest.” Global Institute of Sustainability and Innovation, Arizona State University , 12 May 2014, https://sustainability-innovation.asu.edu/news/archive/renewable-energy-as-a-key-national-security-interest/.

“Setting Lebanon’s Electricity Sector on a Sustainable Growth Path | Policy Statement .” Ministry of Energy and Water, Lebanese Republic, 29 Mar. 2022, https://energyandwater.gov.lb/ar/details/100778/setting-lebanon-s-electricity-sector-on-a-sustainable-growth-path-policy-statement-march-2022-1668521780. Accessed 12 Dec. 2022.

“Treasury Sanctions Oil Shipping Network Supporting IRGC-QF and Hizballah.” U.S Department of the Treasury, U.S Department of the Treasury, 3 Nov. 2022, https://home.treasury.gov/news/press-releases/jy1076. Accessed 12 Dec. 2022.

Tschunkert, Kristina, and Amal Bourhrous. “War in the Breadbasket: The Impacts of the War in Ukraine on Food Security and Stability in Lebanon.” SIPRI, Stockholm International Peace Research Institute , 4 Apr. 2022, https://www.sipri.org/commentary/blog/2022/war-breadbasket-impacts-war-ukraine-food-security-and-stability-lebanon.

“US Congress Members in Lebanon Urge New President ‘as Soon as Possible’.” L’Orient Today, L’Orient-Le Jour, 28 Nov. 2022, https://today.lorientlejour.com/article/1319656/us-congress-members-in-lebanon-urge-new-president-as-soon-as-possible.html.

“USAID Launches $29 Million Project to Deliver Reliable Energy across Lebanon.” U.S. Embassy in Lebanon, U.S. Embassy in Lebanon, 6 Oct. 2021, https://lb.usembassy.gov/usaid-reliable-energy-lebanon/. Accessed 12 Dec. 2022.

[1]  “World Population Prospects”. 2022. Population Division – United Nations. bit.ly/3vBV1e7.

[2] “Lebanon Crisis Response Plan 2022”. 2022. UN Migration. bit.ly/3Z4KsxP.

[3] Chehayeb, Kareem. “After Heist, Lebanese Activists Promise More Bank Raids.” AP NEWS, Associated Press, 15 Sept. 2022, bit.ly/3Pp5djo.

[4] Tschunkert, Kristina, and Amal Bourhrous. “War in the Breadbasket: The Impacts of the War in Ukraine on Food Security and Stability in Lebanon.” SIPRI, Stockholm International Peace Research Institute, 4 Apr. 2022, bit.ly/3FLxxZX.

[5] “IMF Reaches Staff-Level Agreement on Economic Policies with Lebanon for a Four-Year Extended Fund Facility.” IMF, International Monetary Fund, 7 Apr. 2022. bit.ly/3iMaTHK. Accessed 12 Dec. 2022.

[6] “US Congress Members in Lebanon Urge New President ‘as Soon as Possible’.” L’Orient Today, L’Orient-Le Jour, 28 Nov. 2022, bit.ly/3UMd4Z7.

[7] Ibid.

[8] Abu Shaqra, Iyad. “لبنان: أوراق بيضاء في نهاية عهد أسود.” Asharq Al-Awsat, Saudi British Research and Marketing Company, 2 Oct. 2022, bit.ly/3iYL0EE.

[9] “Treasury Sanctions Oil Shipping Network Supporting IRGC-QF and Hizballah.” U.S Department of the Treasury, U.S Department of the Treasury, 3 Nov. 2022, bit.ly/3VTgieK. Accessed 12 Dec. 2022.

[10] “USAID Launches $29 Million Project to Deliver Reliable Energy across Lebanon.” U.S. Embassy in Lebanon, U.S. Embassy in Lebanon, 6 Oct. 2021, bit.ly/3W9bxxt. Accessed 12 Dec. 2022.

[11] “Administrator Samantha Power Announces 22 New Solar-Powered Projects in Lebanon.” U.S. Embassy in Lebanon, U.S. Embassy in Lebanon, 9 Nov. 2022, bit.ly/3FMT0S4. Accessed 12 Dec. 2022.

[12] Abou Jaoude, Carlos, Souraya Machnouk, Hachem El Housseini, Rana Kateb, and Chadi Stephan. 2022. “The Energy Regulation And Markets Review: Lebanon”. The Law Reviews. bit.ly/3VKJmnS.

[13] Ibid.

[14] Ibid.

[15] Karam, Nay. 2019. “Prosumers In Lebanon: A Wasted Potential?”. Energy Democracy | The Rise Of Prosumers. bit.ly/3Iot54V.

[16] “Karpowership.” Lebanon, bit.ly/3Cqmp2x.

[17] Blair, Edmund, and Can Sezer. “Turkey’s Karpowership Shuts down Power to Lebanon.” Reuters, Reuters, 14 May 2021, bit.ly/3XaBfCp.

[18] Salame, Richard. 2021. “Lebanon’s Generator Sector: The Known Workings Of A Once Illegal, Largely Unregulated Industry”. L’Orient-Du Jour. bit.ly/3CpieUK.

[19] Mullen, Tahlia, and The Author Tahlia Mullen. “Rooting out Lebanon’s Generator Mafia.” The London Globalist | An Student-Run International Affairs Magazine Based at the LSE, 4 Mar. 2022, bit.ly/3Ijmx7Q.

[20] Ayat, Carol, Jessica Obeid, Laury Haytayan, and Marc Ayoub. 2021. “Keeping The Lights On; A Short Term Action Plan For Lebanon’s Electricity Sector”. Beirut: AUB Issam Fares Institute for Public Policy and International Affairs. bit.ly/3Covitl.

[21] Despite being officially pegged in the international exchange market at 1,500LL / 1USD, the actual market exchange rate is nowhere near that with prices fluctuating around 36,000LL / 1USD. Meanwhile, the Lebanese central bank has authorized bank withdrawals at the rate of 8,000LL / 1USD.

[22] “Les Propriétaires De Générateurs Veulent Fixer Le Kwh À 5 900 Livres”. 2021. L’Orient-Le Jour. bit.ly/3GEypQB.

[23] Ibid.

[24] Salame, Richard. 2021. “Lebanon’s Generator Sector: The Known Workings Of A Once Illegal, Largely Unregulated Industry”. L’Orient-Du Jour. bit.ly/3Qch8RX.

[25] “Generators: Kilowatt-Hour Price Slightly up in November.” L’Orient Today, L’Orient Le Jour, 29 Nov. 2022, bit.ly/3WNnR79. .

[26] Ayat, Carol, et al. “Keeping The Lights On; A Short Term Action Plan For Lebanon’s Electricity Sector” Beirut: AUB Issam Fares Institute for Public Policy and International Affairs, 2021. bit.ly/3Covitl.

[27] Ibid.

[28] Ibid.

[29] Saad, Patrik, et al. “Legal Framework of the Lebanese Renewable Energy Sector and Its Good Governance.” Rule of Law Programme Middle East and North Africa; Legal Framework of the Lebanese Renewable Energy Sector and Its Good Governance, Konrad Adenauer Stiftung, 14 Oct. 2022, bit.ly/3QmKX2b.

[30] “2019 Article IV Consultation—Press Release; Staff Report; Informational Annex; And Statement by the Executive Director for Lebanon.” International Monetary Fund , International Monetary Fund , 17 Oct. 2019, bit.ly/3Y9Eviu. Accessed 12 Dec. 2022.

[31] Nakat, Ghiwa. “Open Letter to H.E. Dr. Walid Fayad, Minister of Energy and Water.” Greenpeace MENA, Greenpeace Middle East and North Africa 2022, 21 Oct. 2021, bit.ly/3Fn0OsD.

[32] “IMF Reaches Staff-Level Agreement on Economic Policies with Lebanon for a Four-Year Extended Fund Facility.” IMF, International Monetary Fund, 7 Apr. 2022, bit.ly/3iMaTHK. Accessed 12 Dec. 2022.

[33] “IMF Staff Concludes Visit to Lebanon.” International Monetary Fund, International Monetary Fund, 21 Sept. 2022, bit.ly/3Pl6IyQ. Accessed 12 Dec. 2022.

[34] Homsi, Nada. “IMF Bailout a Long Way off for Lebanon despite Passage of 2022 Budget.” The National, The National, 28 Sept. 2022, bit.ly/3hehfiZ.

[35] Prentis, Jamie. “Lebanon Passes Budget after Protest by Retired Servicemen.” The National, The National, 27 Sept. 2022, bit.ly/3WeeJrQ.

[36] Jbeili, Olga, et al. “Bailing out on Rights: The High Cost of an IMF Deal in Lebanon.” Edited by Marie-Noëlle AbiYaghi , Civil Society Knowledge Centre, Friedrich Ebert Foundation & Civil Society Knowledge Centre, Nov. 2022, bit.ly/3Yk9Mzx.

[37] “IMF Reaches Staff-Level Agreement on Economic Policies with Lebanon for a Four-Year Extended Fund Facility.” IMF, International Monetary Fund, 7 Apr. 2022, bit.ly/3iMaTHK. Accessed 12 Dec. 2022.

[38] “Setting Lebanon’s Electricity Sector on a Sustainable Growth Path | Policy Statement .” Ministry of Energy and Water, Lebanese Republic, 29 Mar. 2022, bit.ly/3Yi8ULB. Accessed 12 Dec. 2022.

[39] Chehayeb, Kareem. “Lebanon-Israel Deal a Landmark but with Limits, Experts Say.” AP NEWS, Associated Press, 3 Nov. 2022, bit.ly/3hmG8ZI.

[40] Blinken, Anthony J. Secretary of State “Historic Breakthrough on the Israel-Lebanon Maritime Boundary.” U.S. Department of State, Office of the Spokesperson, 11 Oct. 2022, bit.ly/3X8eEpJ. Accessed 12 Dec. 2022.

[41] Mroue, Bassem. “Total to Launch Sea Exploration after Lebanon-Israel Deal.” AP NEWS, Associated Press, 15 Nov. 2022, bit.ly/3hlA03W.

[42] “About Us.” Novatek, Pao Novatek, bit.ly/3W8uPTC.

[43] “Sanctions Strengthen Novatek’s LNG Role in Russia.” Edited by Tom Daly, Energy Intelligence, Energy Intelligence Group, 13 Sept. 2022, bit.ly/3UQsLi7.

[44] Aboud, Mario, and Najib Mikati. “مقابلة مع الرئيس نجيب ميقاتي على الأحد مع ماريو.” LBC International, Lebanese Broadcasting Corporation International, 28 Nov. 2022, bit.ly/3V6VKOZ. Accessed 12 Dec. 2022.

[45] Energy Compacts Registry. “SDG7 Energy Compact of the Republic of Lebanon.” United Nations, United Nations, 18 Sept. 2022, bit.ly/3HAyzcJ.

[46] Nakat, Ghiwa. “Open Letter to H.E. Dr. Walid Fayad, Minister of Energy and Water.” Greenpeace MENA, Greenpeace Middle East and North Africa 2022, 21 Oct. 2021, bit.ly/3Fn0OsD.

[47] Seip, Norman R. “Renewable Energy as a Key National Security Interest.” Global Institute of Sustainability and Innovation, Arizona State University , 12 May 2014, bit.ly/3hqMTtn.

[48] Jalabi, Raya. “Lebanon’s Failing State Forces Unplanned Shift to Solar Power.” Financial Times, Financial Times Ltd., 10 Nov. 2022, bit.ly/3YkquPh.

[49] Ibid.

[50] BOUTROS, Philippe HAGE. “Lebanon Is Turning to Solar Energy, but Are There Risks?” L’Orient Today, L’Orient Today, 13 Sept. 2022, bit.ly/3vDWi4l.

[51] AFP. “’A Necessity’: Lebanon’s Forced Conversion to Solar.” France 24, 11 Sept. 2022, bit.ly/3ULI7V2.

AWS Picture

Amazon Cloud Gets More Global Thunder with New AWS Data Centers in US, Australia, and India

| By Alexander Haidar |

On January 20, 2023, Governor Glenn Younkin of Virginia announced that the Amazon subsidiary Amazon Web Services (AWS) is planning to invest $35 Billion into expanding its operations in the state over the next seventeen years. According to the Director of Economic Development for AWS, investment from the company has already boosted the state’s Gross Domestic Product by roughly $7 Billion since 2006. Amazon is already a significant employer in Virginia, and aims to add an additional 1000 jobs in this expansion.

AWS has shown to be a particularly profitable endeavor in recent years with third quarter results showing that AWS sales increased 27% year-over-year to $20.5 billion total. AWS has also announced on January 23, 2023 a plan to invest $4.5 Billion into cloud infrastructure in the Melbourne, Australia region, eventually supporting more than 2,500 full time employees. AWS is also going to be investing ₹36,300 Cr (Roughly $4.5 Million) in building data centers in the State of Telangana in India. 

These trends in Amazon’s resource allocation are part of a larger shift of the Amazon business model. Earlier this month, CEO Andy Jassy announced a reduction of 18,000 jobs, expected to be primarily in the human resources and store divisions. Amazon has been increasingly focusing its efforts on cloud computing as the company secures AWS’ position as the world’s largest cloud service provider, controlling around 34% of the market. 

Sources: 

Photo Credit: Complex Discovery, bit.ly/3j5UtKM

Glenn Younkin Press Release on AWS Investment 

Amazon Quarterly Results 

AWS in Melbourne and Telangana 

Amazon Job Cuts Press Release

 

MIT 3D Printing

MIT Creates 3D Printing Technique with Alloys for Extreme Environments

| By Alex Haidar | 

MIT developers published a research paper in the peer-reviewed journal Additive Manufacturing which demonstrated the potential for metal components used in high-stress and temperature applications (such as turbine blades) to be 3D printed from a specially heat-treated nickel superalloy.

Currently, air turbine blades are fabricated from solid castings of mixed metal alloys. 3D printing of turbine blades could help produce more intricate blade geometrics to improve fuel efficiency. Products made by traditional 3D-printed processes previously have left micro-structures imprinted on products, making the molecular structure vulnerable to weakening under the extreme temperatures and forces involved in turbine usage.

This research investigated how a certain heating process could be applied to 3D printed materials in order to increase the structural rigidity of the material. One of the MIT corresponding authors charged with Conceptualization, Funding Acquisition, Supervision Writing, and Editing envisions that in the future, “gas turbine manufacturers will print their blades and vanes at large-scale additive manufacturing plants, then post-process them using our heat treatment.”

The process, known as Directional Recrystallization (DRX), is a post-processing heating cycle directly applied to a 3D printed material which melts inconsistencies and reconfigures the molecular structure into a stronger form. Their research paper ultimately found “significant improvements” in the structural strength of these materials treated with DRX with regards to “optimization of material composition, initial texture, and component geometry.”

The MIT study was conducted under the support of funds provided by the Office of Naval Research and in partnership with Top Grain Technologies, Inc. The “Directional Recrystallization Processing of Additively Manufactured Metal Alloys” patent is currently pending at the United States Patent and Trademark Office.

Photo credit: Dominic David Peachey via TechXplore

Project NEOM

Saudi Arabia Moves Forward on NEOM Vision 2030 Project

| By Alex Haidar |

Saudi Arabia is advancing the reality of its futuristic plans for developing 3 regional centers in Neom. The Kingdom considers the project to be a “revolution in civilization” and is part of the country’s diversification away from economic reliance on fossil fuels in its Vision 2030.

Trojena NEOM Saudi Arabia
Trojena Mountain Resort, NEOM Saudi Arabia

Trojena plans to host luxurious year-round facilities with focuses on outdoor activities and entertainment. On October 4th the Olympic Council of Asia announced it chose Saudi Arabia to host the 2029 Winter Games in the planned ski resort of Trojena in the Neom mountains.

Oxagon Port City, NEOM Saudi Arabia
Oxagon Port City, NEOM Saudi Arabia

Oxagon aims to function as a reimagined, fully automated port city in the Gulf of Aqaba which will spur technological innovation. In October, with the support of the Saudi Ministry of Education, 61 teams participated in a hackathon to generate ideas for “technology in the service of people” and “renewable energy alternatives”. The three chosen winning teams and their respective projects are as follows:

  1. Blindline, Prince Mohammad Bin Fahd University: Utilize AI to learn Braille
  2. 3D & IOT Integrated Construction System, Princess Nourah Bint Abdul Rahman University: Utilize drones to monitor construction progress
  3. Savetro, King Abdulaziz University: Converting petrol cars to electric vehicles
The Line, NEOM Saudi Arabia
The Line NEOM, Saudi Arabia

The Line looks to accommodate roughly 9 million residents within a footprint of only 34 square kilometers while hosting state of the art technologies and amenities.

Photo Credits: Project NEOM Vision 2030 Website

Battery Tech Advances

Li-Ion EV Battery Tech Advances

| By Alex Haidar |

As governments and car manufacturers around the world shift their focus towards incentivizing and producing electric vehicles, lithium-ion cell manufacturers are looking for new ways to increase battery efficiency and performance

In a new study published by Penn State University’s Electrochemical Engine Center and Department of Mechanical Engineering and EC Power developers, Thermally Modulated Cell Technology (TMCT) has shown to be effective in both reducing charging times and maintaining battery performance in low temperatures. Similar science has been previously used by EV manufacturers, except with oversized external heating and cooling systems. 

TMCT Battery
TMCT Battery Configuration, Photo Credit: EC Power

TMCT utilizes ultra-thin layers of resistive heaters made from Nickel embedded within Lithium-Ion battery cells to moderate temperature. In the studies, researchers used TMCT to increase battery temperatures to an optimal range prior to charging, which resulted in effectively increasing the rate at which lithium ions could travel between the internal anodes and cathodes. The implications of this technology mean that conventional electric vehicle batteries could be better suited for a lifetime of quick-charging stops without their range being severely impacted. Batteries could therefore be downsized to save limited lithium resources, a necessity as car developers from General Motors to Toyota to Mercedes have ambitious transition goals within the next 10-20 years to meet increasing EV demand and regulation. 

EC Power claims that a third-party evaluation showed its new cells developed with TMCT were able to meet US Department of Energy goals of 500 fast charging cycles of 200 miles range within 10 minutes, while also retaining >90% of their original capacity after 2,500 charging cycles (500,000 mile range). 

Photo Credits: EC Power