Libya – energy, population and economy

Europe has only 4 contiguous suppliers of imported gas and oil. Russia to the East is by far the most important and to the South,  Algeria, Egypt and Libya. Britain and France bombed Libya into submission in 2011. The outcome to date is likely not what was planned. Oil exports are significantly reduced owing to ongoing civil unrest and gas exports through the Greenstream pipeline to Italy have been disrupted as recently as November 2013.

Figure 1 Sarkozy and Cameron celebrate bombing Libya into submission. Libya exported 9 million tonnes oil equivalent of natural gas to Italy and Spain in 2008. The civil war of 2011 brought oil and gas production to a standstill. Recovery in 2012 has since been reversed as the country has lapsed back to civil unrest.

In this post I am using oil, gas and electricity data from the Energy Information Agency [1] instead of BP [2] for reasons given in the Data Appendix.


I am no expert on Libyan geopolitics. Suffice to say that 27 year old Colonel Gaddafi came to power in 1969 and chose a path for Libya that was frequently in conflict with the interests of The West. The Arab Spring infected Libya in 2011. Pro Gaddafi forces, commanding the levers of State, had the upper hand until France and Britain intervened and bombed them into submission. Gaddafi was captured and executed in October 2011.

Like Iraq, Libya with diverse ethnic, religious and tribal groups was held together purely by brutal dictatorship. With the dictator gone the country is now descending into chaotic civil unrest as numerous minority groups discover that democracy may not cater for their minority interests and needs.

The map (Figure 2) shows part of Libya’s problems. The population and power base is focussed on Tripoli in the West while most of the oil and wealth generation lies in the East.

Figure 2 Libya’s oil wealth is in the East of the country while the population and power base lies to the West in Tripoli.

Population, energy and economy – Suammry

  • The picture of population, energy and economic growth in Libya does not follow conventional rules. I dare say this is linked to a country ruled by a violent dictator, the imposition of UN sanctions and significant oil wealth bestowed upon a small population.
  • Libya’s population trebled from 2 million in 1970 to 6 million today (Figure 3) [3]. This rate of growth beats neighbours Egypt and Algeria albeit from a smaller base in largely uninhabitable desert.
  • The rate of oil production in Libya has historically been controlled by OPEC quotas (Figure 4). Gas production is relatively small but increased with the opening of the Greenstream pipeline to Italy in 2004. Indigenous oil and gas consumption has doubled since 1980 (Figure 5) matching the doubling of population in that time frame, but with a small population, Libya exports most of its production (Figure 6) [1.3].
  • Libya exports gas to Italy through the Greenstream pipeline and prior to the troubles a small amount of LNG to Spain. In 2010, before the troubles began, 9.4 billion cubic metres (BCM) was exported to Italy and 0.34  BCM of LNG to Spain. LNG exports have since ceased [2].
  • The picture of per capita energy consumption and GDP in Libya is rather muddled (Figures 7 and 8). Both are high compared to neighbours Algeria and Egypt but neither has advanced in the last 30 years giving a picture of a stagnant economy which may in part explain the civil war that erupted in 2011 [1, 3].
  • Libya has amassed a huge trade surplus of $610 billion since 1970 but has been unable to use this to progress the well fare of the Libyan people.

Figure 3 Libya’s population has trebled from 2 million in 1970 to 6 million today. Despite this tremendous population growth, 6 million is a tiny population for such a vast oil rich country. In this regard Libya is more similar to the Gulf Emirates than to populous neighbours Algeria and Egypt. Libya participated in OPEC oil production cuts post-1980 and this combined with low and falling oil price led to the economy stagnating. GDP took off with the oil price in 2002 before being crushed by the civil war [3].

Figure 4 BP data 2] show that Libya’s production peaked at 160 million tonnes oil equivalent per annum back in 1970 (Figure 12). The EIA data series begin in 1980 and the production profile is controlled mainly by Libya producing to OPEC quota. Production was ramped up during the noughties in response to rampant global demand and the near term peak of 110 million tonnes translates to around 2.2 million barrels oil equivalent per day. And then came the civil war in 2011. In 2012 production recovered almost to pre-conflict level but has since declined again toward the 2011 production levels as rebels blockade export terminals.

Figure 5 The growth in oil and gas consumption since 1980 effectively mirrors a doubling of population in that time frame [1. 3]. The fall in energy consumption since 2011 will translate directly to hardship among the population.

Figure 6 Libya exports most of the oil and gas produced. The near term peak of 96 million tonnes in 2008 translates to 1.9 million barrels oil equivalent per day [1]. Libya should be an extremely wealthy country.

Figure 7 This chart of GDP v energy consumption lacks any specific trend [3]. But it must be noted that per capita GDP ($10,015) in 2010 is high compared with neighbours Egypt ($1633 in 2010) and Algeria ($3147 in 2010). The question really is how much of Libyan GDP found its way into the pockets of the citizens. Per capita energy consumption over 2 TOE per annum is high compared with African neighbours and this must bring a higher level of living standard.

Figure 8 The lack of correlation between GDP and energy is born out by this chart. I suspect this pattern may be symptomatic of a resource dominated economy. Libya seems to be neither using its energy wealth or financial wealth that this generates to leverage greater wealth by adding value through refining, manufacturing etc.

Figure 9 The GDP v energy picture so far. The trends in the data for Egypt, Algeria and Russia [4, 5, 6] shows that the economies in each of these countries are going somewhere. Libya, on a per capita basis, is the wealthiest of these countries but the lack of structure suggests the economy has gone nowhere for over 30 years, and this may in part explain the troubles in that country. Note how Egypt in 1970 had effectively nothing and while it remains incredibly poor, real economic if not social progress has been made.

Figure 10 None of the Libyan charts are simple. BP do not report electricity for Libya and the EIA data series stops in 2006 [1]. The sharp decline in generation in 1998 suggests a power plant coming off line. There was a US commando strike on Libya that year but no reports of bombing. Per capita electricity consumption in 2006 was only marginally higher than  1987, another sign of a stagnated economy. But the annual consumption of 4 MWh is double that of neighbouring Algeria.

Figure 11 Libya has run a huge trade surplus since 1970 totalling $610 billion [3]. This is part of the flip side of trade deficits in certain western economies. Their inability to stimulate economic activity that would balance the books and boost trade with their trading partners contributes to the economic malaise in the energy importing nations such as Italy, Spain and the UK.

Appendix: Data source

I have been using the BP statistical review of world energy [2] in this series of posts on population, energy and economy of selected countries and deducting consumption from production to create a proxy for exports or imports. BP has the advantage that it reports, oil, gas, coal, nuclear, hydro and renewables and provides data converted to the uniform datum of million TOE. However, for Libya (and other small countries) BP does not report oil, gas or electricity consumption figures. In this post I have therefore used data from the Energy Information Agency of the USA [1]. These data are in some ways superior to BP since, for example, they report imports and exports of refined petroleum products alongside crude oil and report direct data on imports and exports. This adds detail but also complexity. However, the data series only begin in 1980 and budget cuts at the EIA means that certain data series have also been discontinued.

For comparison, the oil and gas production data from BP are shown in Figure 12. It can be seen that the overall picture is the same as the EIA data (Figure 4) but in detail there are differences in the figures. For consistency, I have calculated exports the same way as before using the balance between production and consumption. For gas production I have used the marketable gas data that excludes flared gas and re-injected gas.

Figure 12 Libyan oil and gas production according to BP 2013 [2]

[1] Energy Information Agency: Countries
[2] BP: Statistical Review of World Energy 2013
[3] UN: National Accounts Main Aggregates Database
[4] Egypt – energy, population and economy
[5] Post-peak Algeria?
[6] Russian Power

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4 Responses to Libya – energy, population and economy

  1. Kit P says:

    “Britain and France bombed Libya into submission in 2011.”
    Of course you meant to say NATO led. I suspect a civil war led to reduced energy production not the invention in the outcome.

  2. Hi Euan,

    Great summary. Truth can be stranger than fiction.


  3. Roger Andrews says:

    Euan: As a resident of a developing country I’m somewhat suspicious of the population estimates published by developing countries. The circumstances will of course be different in Libya and elsewhere, but an obstacle to getting an accurate count here in Mexico is that a lot of people refuse to be counted. Why? Because they think that if they get counted they will appear on a government list and then the govt will be after them for income taxes, which Mexicans see no point in paying if they can possibly avoid it.

    As to how much difference this might make, some years ago I saw a census that listed the population of the Guadalajara metro area just north of here as three million and change. But the census also listed a vehicle ownership ratio of one for every five people. How many vehicles were circulating in Guadalajara at the time? Over a million, and they were just the registered ones.

    I’m also somewhat suspicious of the per-capita GDP estimates. Per cap GDP in Mexico is reportedly around $10,000 (almost three times higher than Ukraine, incidentally) but looking around it’s hard to see it, even allowing for the skewed income distribution. $5,000 strikes me intuitively as being nearer the mark.

    So how accurate are the published population numbers? I’m sure experts have looked into this question and sprinkled holy water on them, but it would be nice if the charts came with error bars.

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