Opportunity Cost in Managing Libyan Natural Gas Exports: An Analytical Comparison with Gulf Arab States

Abstract

The study aims to draw attention to the wasted resources resulting from poor management in the Libyan economy by presenting a simplified approximate model for calculating the opportunity cost of natural gas exports. This is achieved through adopting a descriptive–analytical methodology based on data obtained from OPEC publications. The study concludes with several key findings, most notably that exporting gas via pipelines while relying on a single importer represents an irrational option that places the Libyan economy under commercial dependency. In addition, this approach leads to the loss of substantial revenues that could have been generated had liquefied natural gas (LNG) technology been adopted, as is the case in the Gulf countries, some of which were used for production and marketing comparisons. The study recommends adopting a dual-track approach in managing gas exports during the initial phase, as a preparatory step toward transitioning to LNG exports, in order to ensure the optimal utilization of economic resources.