ABSTRACT
Scholars in natural gas fields thought to explain the relationship between natural gas utilization and domestic energy development. However, the literature has yet to fully account why developing countries prioritize exporting natural gas over domestic energy development. This gap is theoretically addressed by this study, titled Natural Gas Utilization and Domestic Energy Development in Tanzania, which assesses why Tanzania prioritized the exportation of natural gas over domestic energy development.
Tanzania discovered its first natural gas reserve 50 years ago, and recently, a massive discovery led Tanzania to a total confirmed reserve of 57 trillion cubic feet of natural gas. However, its energy sector is dominated by biomass, mostly charcoal and firewood, which account for about 85% of total energy consumed, and more than 50% of households are not connected to electricity. And those who are connected experience rationing. Since natural gas is the primary contributor to power generation in the national grid, the recent massive discovery of natural gas is expected to change the current energy situation and ensure energy security as well as social and economic development. However, the government has decided to prioritize the exportation of natural gas for global trade. In this context, domestic energy development aspirations have been shadowed by export decisions.
By employing theoretical perspectives from GPN, word system theory, and resource curse theory, I found that two reasons made Tanzania prioritize exportation over domestic energy development. First is the globalization of the natural gas market, which led Tanzania to trade its natural gas for a beneficial market. The second is the materiality of natural gas in terms of discovery location and physical properties, which requires massive capital, advanced technology, specialized infrastructure, and experienced personnel for the operation, which increases cost and leads to complexities in utilizing natural gas. However, these reasons are accelerated by Tanzania's internal incapability in finance, technology, expertise, and inadequate infrastructure, which limit independent utilization of natural gas for domestic energy development and limit state power to influence domestic interest. It is accelerated by profit-oriented international companies, consequently prioritizing the global market and assuring Tanzania of the market and profit.
Nevertheless, there are so many challenges surrounding the exportation of natural gas to global trade including price volatility and uncertainty of the markets which might impact the country's revenue and development of the non-resource sector. Also, the relationship between actors in the global production network of natural gas is bound by inflexible long-term contracts and take or pay clauses. The degree of government participation is limited due to its internal incapabilities, which impacts development outcomes. In this context, the export decision is not seen as a sustainable decision, hence I recommend Tanzania government strengthen its regulatory framework and develop its internal capability through education, research, and training. Promote the domestic market and develop natural gas infrastructure. and lastly, proper management of the natural gas revenue to ensure effective utilization of natural gas for domestic energy development.
