Poverty & Radical Islam.

In 2000, when oil prices were high, Saudi Arabia's income per head was $7,230, 61st in the world, having tumbled by about 60% from its peak in 1980. With unemployment being 28% among 20- to 24-year-olds and at least 10% among 25- to 29-year-olds, the millions of economically distraught, educated young Saudis form a restive core in the oil-rich kingdom. Their idle presence represents a prime recruiting ground for radical Wahhabi Islamists and is a growing source of anxiety for the House of Saud. More than half of the kingdom 16-17m Saudis are under 20. Their prospects are bleak. Moreover, the economy is growing far more slowly than the population, which means more Saudis entering the workforce each year than jobs being created.

Economic distress has already forced many poor Saudis into the arms of Wahhabi charities which carry a politically laced message. Most middle-class youths veered into religious extremism before becoming terrorists. Many Saudis worry that the wobbly economy, still reeling from the Gulf War of 1991, could worsen if a new war with Iraq removed Saddam from power and started Iraqi oil flowing at the kingdom's expense. Even for employed Saudis, salaries are half what they were in the golden 1970s. 12.The Gas Markets: In the US, a major increase in domestic gas supply will depend on a gas price above $4 per 1,000 cubic feet. US demand for LNG this winter has risen sharply in the north-east.

In Europe, 2002 saw immense upheavals in the structure of the gas market. Apart from France and Germany (where deregulation will be slower), the leading gas consumer countries have split the trading and transport activities of the dominant operator company, which means an end to traditionally integrated utilities (see Part 8).

The liberalisation process in the EU has entered an accelerated phase in the establishment of regulatory tools: TPA tariffs, access to regasificat-ion plants, access to storage facilities, modulation, etc. In countries like Italy, Spain and Austria, the gas and power markets will be totally opened to competition in 2003. In 2004, sectors other than residential should be opened to competition in other EU countries. Thus a new type of industrial and contractual relations will be established between different gas players: producers, suppliers, shippers, transporters and distributors

In Asia, the main gas markets will remain heavily dependent on LNG. A shortage of LNG in Japan and South Korea developed in late 2002 because of severe winter cold and both are importing spot LNG.

Tokyo Electric (Tepco) said in late 2002 it urgently needed enough energy this winter to avoid plunging its 26m customers into darkness. It has to close 15 of its 17 nuclear reactors by February, with atomic power plants generating almost 45% of Tepco's electricity in the vital Tokyo area. In its spot LNG purchases, Tepco is crowding out Korea Gas Corp. (Kogas), which in late 2002 was looking to the same sources of LNG to help cover over 36 spot cargoes it was seeking in the four months from November.