Hydrocarbon Resources in Tanzania: Achieving Benefits with Robust Protection

Like many other natural endowments, natural gas is a finite resource. Its consumption today is a subtraction from, and detrimental to, the resources of future generations. Therefore, the extraction of finite resources must be based on, and guided by, broad and long-term considerations instead of being limited to immediate and short-term proceeds and benefits. Put differently, inasmuch as investors who devote huge financial and technological resources to prospecting for natural gas must recover their costs and profit from the activity, the immediate and short-term earnings derived from their discoveries should not be oblivious to long-term and strategic benefits for future generations in the host country. Using historical and contemporary sources as well as theoretical materials, this paper provides a partial explanation of Article 2.4 of the Natural Gas Policy of Tanzania. In a discussion of three thematic issues, the paper shows that Tanzania is not alone in seeking the maximum possible long-term benefits from its natural gas. In other words, efforts to protect national interests in natural gas reserves should not be seen as a peripheral exercise peculiar to Tanzania.