As cheap natural gas is getting scare, some of the world’s major oil producers grouped in the Gulf Cooperation Council (GCC) are faced with a dilemma of higher energy costs in the future.

The economic slump world over has led to reduced reliance on natural gas, however, in the Gulf, there still remains a growing demand for natural gas necessary for power generation for the industrial sector. The region is accountable for roughly 23 percent of global gas reserves.

GCC economies have grown at a rate of around 7.6 percent a year. Even a seven-fold regional production increase over 25 years is not good enough to keep pace with the high demand needed to meet long term gas export contracts, increase oil recovery, boost the electricity generation and built up the huge petrochemical industry. The power generation requirements for the region will also increase by 50 percent over the next two decades. More than 90 percent of the region's power generation will come from gas, significantly increasing the GCC power sector's reliance on gas.

Saudi Arabia, Kuwait, Oman, Bahrain and the United Arab Emirates have been denied access to the neighboring gas supplies of Iran and Qatar. A combination of political and economic reasons are behind this strange scenario as the GCC countries have ineffectively tried to negotiate for almost two decades with Iran and Qatar, without much success.

GCC gas-hungry countries still have to meet future energy demand and they may have to resort to even more expensive alternatives. This may include options such as renewable energy or importing LNG at much higher price. The implications of such measures could have a serious impact on the economies of these countries.