Next Article in Journal
Increasing the Utilization of Transmission Lines Capacity by Quasi-Dynamic Thermal Ratings
Next Article in Special Issue
Applications of the 3T Method and the R1 Formula as Efficiency Assessment Tools for Comparing Waste-to-Energy and Landfilling
Previous Article in Journal
Harmonic Distortion Prediction Model of a Grid-Tie Photovoltaic Inverter Using an Artificial Neural Network
Previous Article in Special Issue
Novel Yeast Strains for the Efficient Saccharification and Fermentation of Starchy By-Products to Bioethanol
 
 
Search for Articles:
Title / Keyword
Author / Affiliation / Email
Journal
Article Type
 
 
Advanced Search
 
Section
Special Issue
Volume
Issue
Number
Page
 
Journals
Energies
Volume 12
Issue 5
10.3390/en12050791
energies-logo
Submit to this Journal Review for this Journal Propose a Special Issue
► Article Menu

Article Menu

share Share announcement Help format_quote Cite question_answer Discuss in SciProfiles thumb_up
...
Endorse textsms
...
Comment
first_page
settings
Order Article Reprints
Font Type:
Arial Georgia Verdana
Font Size:
Aa Aa Aa
Line Spacing:
Column Width:
Background:
Article

The Application of Analytical Hierarchy Process in Combination with PESTEL-SWOT Analysis to Assess the Hydrocarbons Sector in Cyprus

by
Michail Tsangas
1,*,
Mejdi Jeguirim
2,*,
Lionel Limousy
2 and
Antonis Zorpas
1
1
Laboratory of Chemical Engineering and Engineering Sustainability, Environmental Conservation and Management, Faculty of Pure and Applied Sciences, Cyprus Open University, 33 Giannou Kranidioti St, 2220 Latsia, Nicosia, Cyprus
2
Université de Strasbourg, Université de Haute Alsace, Institut de Science des Matériaux de Mulhouse (IS2M) UMR CNRS 7361, 68057 Mulhouse, France
*
Authors to whom correspondence should be addressed.
Energies 2019, 12(5), 791; https://doi.org/10.3390/en12050791
Submission received: 4 February 2019 / Revised: 21 February 2019 / Accepted: 22 February 2019 / Published: 27 February 2019
(This article belongs to the Special Issue The 6th International Conference on Sustainable Solid Waste Management: NAXOS 2018)
Browse Figures
Versions Notes

Abstract

:
Natural gas reserves have been recently found offshore of Cyprus. Hence, a new energy sector is under development, creating potential for raised welfare for the small insular EU member. Several social and economic benefits could be achieved from the resources’ exploitation. However, natural gas is a non-renewable energy source, connected with the major environmental issues of fossil fuels. The research goal of this work was to evaluate the sustainability of the new hydrocarbons sector. This was attained using a set of indicators, developed from the combination of PESTEL (Political, Economic, Technical, Social, Environmental, Legal) and SWOT (Strengths, Weaknesses, Opportunities, Threats) analyses. These were quantified using the Analytical Hierarchy Process (AHP) weighting method. They were pairwise compared and evaluated, resulting to a size for each one. The judgements of four evaluators, representing diverse interested parties, were used. The strengths and opportunities of the sector were found to be more than the weaknesses and threats. The relevant indicators quantification demonstrates also that the value of the positives is higher than the negatives. Therefore, if the first are enhanced and the latter are mitigated, there is sustainability potential. The sectors environmental issues are evaluated as the most important, followed by the economic. The other takes lower but comparatively significant values, and must be handled accordingly. These results lead to useful conclusions and could be exploited for decision-making and policies formulation.

1. Introduction

Cyprus is a small insular EU member Country located in the southeastern Mediterranean. The energy system of the island is based on imported oil-fired electricity generation with a limited contribution of renewable energy sources such as solar, wind and biomass [1,2]. Recently, offshore hydrocarbon explorations have detected natural gas reserves in the “Aphrodite” Natural Gas Field. Furthermore, other licenses have been granted to international Oil and Gas companies and related hydrocarbon prospection activities in other areas, within the island Exclusive Economic Zone (EEZ), are underway [3]. Figure 1 presents a map of the exploration blocks that the Country has established and the corresponding licensees [4]. These local energy sources exploitation could increase incomes and strengthen the energy supply security [5] for Cyprus. Such context could be a force for moving toward the economic and welfare growth of the island.
Natural gas is considered as environmental friendly energy source due to its low pollutant emissions (CO2, CO, nitrogen oxides, particulates, sulfur dioxide) compared to other fossil fuels [6]. However, natural gas extraction and conversion are still connected to several environmental impacts including greenhouse gases (GHG), i.e., carbon dioxide and methane emission, land use alteration and local ecosystem damage [7]. Moreover, fossil fuel such as natural gas, are not renewable and sustainable energy sources and their exploitation is, nowadays, connected to several social, political and economic concerns for producing countries, such as civil war, autocracy, lack of economic development [8] and terrorism [9]. In this context, the sustainability of Cyprus hydrocarbon exploitation is of interest to engineers, scientists, authorities and civil society actors.
Sustainability can be defined as the management of financial, technological, institutional, natural and social resources to guarantee the needs of present and future generations [10]. The related performance can be evaluated by using indicators including policies, decisions and actions to create economic, social and environmental results [11]. These indicators define important characteristics for sustainable development and their availability is a precondition to convert the model into policy [12]. Indicators are the necessary metric to track performance at the horizontal level in sustainability and they provide a comprehensive basis for the assessment of progress against environment, policy, economic, social targets, etc. [13]. According to [14], “indicators quantify information by aggregating different and multiple data (necessary to obtain reliable information); thus, they can be used to illustrate and communicate complex phenomena in a simpler way, including trends and progresses over a certain period of time”. Furthermore, according to the definition given by the European Environmental Agency (EEA), an environmental indicator is an observed value, representative of a phenomenon under study [15] and “a measure, generally quantitative, that can be used to illustrate and communicate complex phenomena simply, including trends and progress over time” [16]. Moreover, indicators can be designed, calculated and measured for different spatial and temporal scales. They also can be used either to compare different systems or the evolution of a system, and are suitable to measure and assess sustainability [10].
Several approaches to determine suitable sustainability indicators are mentioned in the literature. Previous studies and methodologies to select them for plant sustainability evaluation are referred [17]. Literature reviews and expert input to identify them is used for energy planning and management assessment [18]. Literature surveys and stakeholder consultation has been used for solar photovoltaic assessment [19]. An exhaustive list of system observables, i.e., indicators, has been gathered to model the electricity system of India in order to benchmark its sustainability [20]. Performance criteria and sustainable development pillars, i.e., social, economic and environmental have been used for renewable energy sources project evaluation [2]. Indicators have also be chosen to reflect specific conditions for social sustainability assessments of shale gas in the UK [21]. A tool that is used to measure or to rank the chosen sustainability indicators is the Multi-Criteria Analysis Method, AHP [22,23,24,25].
Internal and external context analyses as well as stakeholder opinion considerations are required for effective decision-making. The latest editions of quality management standard, ISO 9001:2015, as well as the environmental management standard, ISO 14001:2015, require organizations to determine the internal and external issues that are relevant to their purpose and strategic direction and the needs and expectations of the interested parties [26,27]. A study of the automotive Original Equipment Manufacturers (OEM) industry and suppliers showed that there is positive correlation between an organization’s capability to understand the context and its ability to change and to achieve improved performance and results [28].
PESTEL and SWOT analyses are extensively used tools to analyze context. The first technique is able to guide, throughout its six perspectives, a literature review of the enhancement themes for construction productivity [29]. It has also been used to identify and overcome the obstacles to the development of the waste-to-energy incineration industry in China [30]. The latter was applied to reveal the drivers and barriers in the course of implementing rural building energy efficiency in China [31]. A SWOT analysis approach was also used for strategic management and technology enablement of machine learning and advanced analytics in the oil and gas industry [32]. Furthermore, it has been adopted for collecting opinions of Chinese small and medium companies for the ISO 14001 standard [33]. The literature also includes combinations of these two tools. In a case study for the Colombian electricity industry, PESTEL was implemented for scenario development and SWOT for their analysis of strategy design [34]. Moreover, Multi-criteria decision-making (MCDM) techniques, like Analytic Network Process (ANP) and fuzzy Technique for Order Performance by Similarity to Ideal Solution (TOPSIS), have been combined with SWOT for analysis purposes [35,36,37]. SWOT/PESTEL analysis combination has been used to identify the factors that can be set as criteria in further analyses for alternative solutions using AHP. Such an application was presented as a case study of reconstructing a water intake structure [38].
Energy related research in Cyprus covers a wide range of areas. It includes renewable energy integration [39], the evaluation of relevant projects [2], as well as their potential [40]. Energy demand forecasting has also been under investigation by scholars [41]. Energy efficiency of buildings is another research subject [42]. Moreover, technical issues like the determination of quality properties of low-grade biodiesel and heating oil blends have been researched [43]. Natural gas planning [1] and related energy security [5] have also been research topics. Furthermore, the island energy resources including renewables, hydrocarbons reserves and their sustainability has been qualitatively analyzed and investigated [44].
Hence, a research question regarding Cyprus’ hydrocarbon development arises; if their exploitation could enable present Cyprus inhabitants to harvest the potential benefits and improve their life without jeopardizing the future generations’ right to a clean environment, social coherence and economic prosperity. In order to answer this enquiry, the institutional, technological, economic, environmental and social framework of the new sector must be analyzed and related performance indicators should be determined and calculated. This paper aims to propose a method combining PESTEL analysis and SWOT analysis in order to determine indicators and to evaluate sustainability performance by quantifying them. This is performed by implementing the weighting technique, which is included in the AHP. The results of the established method for the Cyprus hydrocarbon sector assessment are presented and the derived conclusions are analyzed.

2. Materials and Methods

The proposed method combines quality and quantitative analysis as well as decision-making tools in order to quantify results, which qualitatively emerged. It also enables the involvement of multiple interested parties’ in order to ensure objectivity.

2.1. Problem Analysis Method

The PESTEL (or PESTLE) analysis is a popular tool that helps to consider the political, economic, social, technical, environmental and legal environment of an organization to identify the external environment or issues that could have an impact on its operations [45]. The SWOT analysis is a strategic analysis tool, which combines the study of the strengths and weaknesses of an organization, territory or sector with the study of the opportunities and threats in its environment [46]. The combination of them is suitable to analytically imprint and evaluate the situation of a sector. The PESTEL analysis results to an extensive description of the context and all the factors influence the situation under study. Consequently from the SWOT analysis emerges the internal and external issues that either must be enhanced, when they are strengths or opportunities, or mitigated when they are weaknesses or threats (Figure 2).
Saaty’s AHP multi-criteria decision-making method proposes to structure an evaluation problem into a hierarchical model [47,48]. Accordingly, Cyprus’ hydrocarbon sector evaluation problem was proposed to be analyzed as presented in Figure 3.
Hence, the PESTEL-SWOT combination can be used in order to identify the internal and external issues that can be set as sustainability indicators to cover the external context factors by expressing the strengths, weaknesses, opportunities and threats of Cyprus’ hydrocarbon sector and be used to assess its sustainability.

2.2. Sustainability Indicators Quantification Method

AHP, besides the decision problem structuring step, includes a technique to weight the proposed alternatives, based on the pairwise comparison of the importance of the included criteria [47,48,49,50]. This was used in the proposed method to evaluate and quantify the formed sustainability indicators as alternatives. According to the AHP, verbal comparison judgments are transformed into numerical quantities on a 1 to 9 scale (1 for equal importance judgements to 9 for absolutely more important judgements). In a similar approach, political, economic, social, technical, environmental and legal issues of Cyprus’ hydrocarbon sector could be pairwise compared as follows:
Political vs. EconomicEconomic vs. Social
Political vs. SocialEconomic vs. Technical
Political vs. TechnicalEconomic vs. Environmental
Political vs. EnvironmentalEconomic vs. Legal
Political vs. LegalSocial vs. Technical
Technical vs. EnvironmentalSocial vs. Environmental
Technical vs. LegalSocial vs. Legal
Legal vs. Environmental
These comparisons are ranked and quantified by using the following judgement choices:
  • First issues are of absolutely higher importance;
  • First issues are of very strongly or demonstrably higher importance
  • First issues are of strongly higher importance
  • First issues are of higher importance
  • The compared issues are of equal importance
  • Latter issues are of higher importance
  • Latter issues are of strongly higher importance
  • Latter issues are of very strongly or demonstrably higher importance
  • Latter issues are of absolutely higher importance
An evaluator can be called to pairwise compare political, economic, social, technical, environmental and legal issues by selecting one of the above judgement choices for each pair of issues. Therefore according to the evaluators judgements for each pair, the weight of a quantity for each issue, i.e., the indicator, can be calculated following the AHP criteria weighting technique [47,48]. The inconsistency-checking step included in the method aids in detecting judgements that should be corrected in order to yield consistent results. Furthermore, strengths are positives and weaknesses are negatives related to internal factors. Opportunities are external factors having a positive interaction and threats represent the negative effects on the system environment [38]. Consequently, values of indicators expressing the strengths and opportunities take a positive sign while values of indicators expressing weaknesses and threats are negatives. Hence, according to the choices and their classification, the related indicators are quantified and evaluated, showing the importance of each issue and enabling observers to draw conclusions.

2.3. Evaluations Collection Method

The AHP theory of measurement through pairwise comparisons relies on expert judgements to derive the priorities [50]. In order to ensure the results objectivity, the problem evaluation should be based on the judgements of a team composed of different experts. These evaluators will pairwise compare the importance of the PESTEL issues in the hydrocarbon sector in Cyprus. The evaluation team synthesis should include the interested parties of Cyprus’ hydrocarbon development and at the same time should consider all sustainability dimensions. In order to enable convenience and uniformity, a structured multiple-choice questionnaire was used for answers collection.

3. Results

3.1. PESTEL Analysis

Cyprus’ hydrocarbon sector is currently under development and the situation is changing due to the detection of natural gas reserves. The following analysis includes issues and facts that either influence the sector or are inherent. The data were collected and gleaned from secondary data, as academic literature, government or international organizations websites, factsheets, reports, etc.
Political issues influence Cyprus’ hydrocarbon development since Cyprus joined the European Union in May 2004, and therefore is committed to European policies and legislative framework as well as to the Europe 2020 targets [51]. Moreover, there is a particular situation known as the Cyprus Problem, Cyprus dispute or Cyprus conflict. After the military Turkish invasion in 1974, the country was divided into two main parts, the southern part which is under the control of the recognized Republic of Cyprus government, and the northern part which is under Turkish occupation [52].
The economic context includes economy growth after a recession period. In fact, the gross domestic product (GDP) growth rate for the second quarter of 2018 was +3.9% compared to the same quarter of 2017 [53]. Moreover, Cyprus has been a Eurozone member since 2008. This membership offers advantages and benefits to its economy such as improved economic stability and growth, greater security and more opportunities for businesses and markets [54]. Other related facts which should be noted are that natural gas consumption has a significant and positive impact on economic growth in the long run [55], and that it is anticipated that electricity generation fuel shift from heavy fuel oil to natural gas for power generation will lead to a lower generation cost for the country [39]. Furthermore, the development, exploitation size and speed of the deep water oil and gas discoveries depend on sustainable contemporary international oil price levels [56].
In relation to the social issues that influence the hydrocarbon sector, the Human Resources Development Authority of Cyprus forecasts that the electricity supply and natural gas sector will have new employment needs for the next years, i.e., from 1930 positions in 2017 to 2079 in 2027 [57]. On the other hand, oil and gas extraction activities meet social resistance [58] and they have a high occupational health and safety risk as they are connected to high rates of injuries and fatalities [59].
Regarding the technical context, the energy demand in Cyprus is projected to rise, calculated to be 5% to 44% higher in 2040 than that it was in 2010 [41]. Furthermore, there is planning for energy interconnections such as the "EastMed Pipeline", aiming to link the East Mediterranean gas reserves to the Greek mainland via Crete, which has been labelled as a Project of Common Interest (PCI) by the European Union [60].
Concerning the environmental issues, it could be noted that natural gas has environmental benefits. It is considered to be a more environmentally friendly clean fuel than other fossil fuels such as coal and crude oil [61]. Due to the relatively low emissions of carbon dioxide and local air pollutants, it is a promising transition energy source between higher-carbon fossil fuels and renewable energy sources [62]. On the other hand offshore oil and gas activities are associated with many potential impacts to the environment [56,63].
The legal framework is dominated by solid Cypriot and European legislation, which regulates all key issues of hydrocarbon prospection, exploration and exploitation, such as licensing, health and safety as well as environment protection issues.

3.2. SWOT Sustainability Indicators

The above PESTEL analysis shows the strengths, weaknesses, and opportunities of Cyprus’ Hydrocarbon sector, which are settled as sustainability indicators. These indicators are presented and classified in the SWOT matrix in Table 1.

3.3. Pairwise Comparisons

Cyprus’ hydrocarbon sector is still at the embryonic stage with an unusually complex microenvironment, a unique macro-environment and a large number of gestating public and private actors [64]. Decision making requires knowledge of the problem, the need and purpose, the criteria and sub-criteria, the affected stakeholders and groups and the alternative actions to carry out [50]. In order to satisfy these four conditions, experts with different backgrounds were called to pairwise compare the importance of the six elements of the PESTEL analysis through a structured questionnaire. These were a hydrocarbon expert, who is a marine engineer working for a company supporting exploration activities, an economy expert, who works in the accounting services sector, an environment expert who is an environment scientist and consultant and an environmentalist who is active member of the environment interested civil society. The array of the chosen specialties aimed to cover all three sustainability pillars, i.e., society, economy and environment, as well as the interested parties of the hydrocarbon development process. Different specializations and points of view are expected to guide to diverse comparisons and to generate the most possible complete result.
The collected judgements, per choice, are presented in Figure 4 and Table 2. The answers summary review shows that there is a diversity of opinions. Although trends to one or other direction for some pairs are observed, e.g., economic issues vs. technical or political issues, environmental vs. technical or social, more comparisons include at least one judgement of equality or of the opposite view. For the cases of economic vs. environmental or social issues, there was a completely divided view from the evaluators, i.e., two of them choose one side and the other two promoted the other side. The only shared belief is that environmental issues are of higher importance compared to political issues. It is obviously concluded that Cyprus’ hydrocarbon sector assessment is not an object of common perception and there is agreement between the several parts involved.

3.4. Indicators Quantification

For group decision-making, judgements must be combined so that the reciprocal of the synthesized judgements are equal to the syntheses of the reciprocals of these judgements. Therefore, the geometric mean of the hierarchies calculated should be used as the final collective hierarchy [50]. Hence, the four experts’ answers were individually processed in order to quantify the indicators according to each opinion. Using this process, the final indicators values were calculated as defined above.
Quantifications were processed by using the free web based AHP Calculator, AHP Online System–BPMSG (Business Performance Management Singapore) [65]. The twelve (12) indicators were input as criterions and sixty-six pairwise comparisons were processed for each expert case. The expressed judgement relationships of the six issues, i.e., political, economic, social, technical, environmental or legal were used and the indicators concerning the same issues were judged as of equal importance. After the necessary consistency ratio improvement, in order to be under 10%, the priority percentage hence weight, i.e., value of each indicator, was calculated. The results and the indicators’ rank, as were exported by the calculator for each expert responses, are presented in Table 3.
The geometric means of the calculated values are presented in Table 4. The indicators, classified as strengths and opportunities, are positive and the ones as weaknesses and threats, are negative. Therefore, in order to take their final value, they take the corresponding sign as indicated in Table 4. The indicators size as well as their rank are pictured in Figure 5. The total negative vs. the total positive area, the indicators cover, are presented in Figure 6, respectively.

4. Discussion

According to the above results, the primary qualitative analysis emerges that Cyprus’ hydrocarbon sector could be sustainable. In the framework of the formed indicators evaluation, it obviously presents more positives than negatives. The quantification process verifies this result also. Detected sector strengths and opportunities are more than the weaknesses and threats, and the total area they occupy, as presented in Figure 6, is more extensive.
The environmental issues importance is in all comparisons was greater than any other issue, except the legal ones. Furthermore, all experts’ judgements, except the economy expert’s ones, emerged as of the highest value. Therefore, the protection of the environment is highly evaluated and the relevant matters should be treated by priority. The two relevant indicators are calculated to have the first and second highest values. So they are ranked accordingly. Moreover, it must be noted that EN1 (natural gas environmental benefits as fossil fuel) is a strength with a positive value and EN2 (natural gas extraction environmental impacts) is a weakness with a negative value. Hence, these two indicators distribute their importance and value between the positive and the negative areas. This demonstrates that the environmental issues of the hydrocarbons sector have both constructive and contrary effects.
The third and fourth ranking positions are allocated to the two economic indicators. E1 (natural gas price) is a strength and E2 (Cyprus GDP growth) is an opportunity. So both add their value to the positive area. Therefore, hydrocarbons’ economic aspect is considered to be of high importance and it positively affects sector development. So it should be handled accordingly. However, it is notable that only the economy expert evaluated them as of the highest value. The others’ judgements, ranked them between the third and fifth highest value.
The political and legal issues of the sector are evaluated as of the lowest importance. The relevant experts’ opinions resulted in generally low, but diverse ranking positions. The indicators P1 (EU membership) and L1 (legislative context) were expressed as an opportunity for the former and as a strength the latter, so they affect positively the sector development. P3 (Cyprus problem) is a threat with a negative impact. Their collective input into the positives area is not significant. Nevertheless, they add to the total result and their low values indicate that they should be treated. However, it must be ensured that the consequent decisions will not delay the development of the hydrocarbon sector.
The middle values and ranking positions are occupied by technical and social issues. Both technical indicators are positive. They should be used accordingly. However, it must be noted that T1 (interconnection pipeline) which is a strength has a significantly higher value than T2 (energy demand rise) which is an opportunity and this should be considered. The ranking positions between them are occupied by the three social indicators. The threat S3 (social acceptance) had the highest value, and strength S1 (sector employment needs) had the second, and the weakness S2 (health and safety risks) were the lowest among them. However, it is obvious that the two of them contributed significantly to the negative area. If they will not be efficiently treated, they could be a strong burden for the sectors sustainability. Another observation regarding these issues is that the experts’ evaluations for them were not in consonance.
The above results features the positives that need to be either improved or exploited and the negatives that need to be mitigated or eliminated. In this framework, in order to develop the Cyprus hydrocarbon sector in a sustainable way, the following recommendations for decision-making and policy formulation were extracted. Hydrocarbon development in Cyprus should proceed by ensuring the protection of the environment. Environmental impacts of the activities may be multiple [56,63] and are evaluated by the experts as significant, so they should be eliminated. The same should be done for the health and safety risks, which could also be severe [59], although they have a medium value. Furthermore, since renewable energy projects could be effectively developed on the island [2], their promotion instead of fossil fuel extraction should be seriously considered. Economic issues such as natural gas price, Cyprus’ economic growth and their contribution to a positive result should also be considered in the process. The first should be monitored and be a key decision factor, as it plays a significant role in the speed and extent of the development [56]. The second could ensure the needed financial sources for the undertaking in the long term.
Social acceptance is also important and needs to be established. Opposition from local communities is connected to the environmental issues [58], so ensuring protection of the environment will contribute to mitigate any rejections or protests. The advantage of the sectors potential employment needs must be exploited as well as Cyprus’ EU membership. This could ensure the elimination of civil war, autocracy, lack of economic development and terrorism, connected to fossil fuel production [8,9]. Cyprus’ political problem, which is a significant issue for the island, may not have been comparatively evaluated or of major importance, but as it is a threat for the sustainability of the process, it must be suitably managed. Besides, hydrocarbon development could potentially enable a Cyprus problem settlement [66]. Furthermore, the technical aspects of the process could be exploited more intensely. Prospected country energy demand rise [41] could create local interest and need. Moreover, the planned pipeline interconnections [60] could provide overseas sale options for the available natural gas.
MCDM techniques can be used to support sustainable decision-making for energy issue solving and to evaluate contradictory effects [25]. Furthermore, their use with SWOT [35,36,37] and SWOT-PESTEL [38] has proved effective for analysis. Moreover, the PESTEL-SWOT combination is able to guide results and conclusions. The method applied in this paper presents the successive application of the three tools for sustainability assessment and planning for energy issues. The results of PESTEL fed the SWOT analysis. Afterwards, AHP was used to quantify and evaluate the SWOT output. The Cyprus hydrocarbon sector evaluation results show that this method can be implemented and export useful outcomes.

5. Conclusions

The proposed methodology provides a suitable tool, able to analyze both external and internal issues, to consider multiple interested parties’ opinions and to extract quantified results. The importance of the derived results is that they contribute to general conclusions and recommendations; they also give values to individual sustainability indicators. Therefore, a decision maker is able to know the specific matters and situations that should be treated and the appropriate timeframe and intensity of handling. Moreover, despite the diverse experts’ judgements and evaluations for the issues and the indicators, a composed outcome is extracted. This could aid to an agreement, between the stakeholders, for the necessary policies and actions.
The interpretation of the results of the evaluation of the PESTEL-SWOT formed sustainability indicators leads to the general observation that the hydrocarbon sector in Cyprus could be sustainably developed. In order to reach this sustainability, it’s political, economic, social, technical, environmental and legislative negative aspects, that have been detected and evaluated, should be mitigated or eliminated and the respective positive ones should be enhanced and exploited. The present works’ observations could be quite useful for decision makers to form relevant decisions and choices in order to incorporate them into a strategic planning framework. Other East Mediterranean countries, like Israel [67] and Egypt [63] have natural gas reserves also. So the proposed methodology could be considered for their energy planning as well.
Although the PESTEL issues pairwise comparison facilitated the judgements’ selection by the experts, and the calculations and opinions collected were extended to the relevant indicators, it should be noted that the results could be more representative, if the comparisons were performed for each indicator to all others. This would be more demanding to process, but the detailing could guide to more accurate and extensive conclusions.

Author Contributions

Conceptualization, A.Z.; Data curation, M.T.; Investigation, M.T.; Methodology, A.Z.; Project administration, L.L.; Supervision, M.J. and A.Z.; Validation, M.J. and A.Z.; Writing—original draft, M.T.; Writing—review & editing, M.J.

Funding

This research received no external funding.

Conflicts of Interest

The authors declare no conflict of interest.

References

  1. Taliotis, C.; Rogner, H.; Ressl, S.; Howells, M.; Gardumi, F. Natural gas in Cyprus: The need for consolidated planning. Energy Policy 2017, 107, 197–209. [Google Scholar] [CrossRef]
  2. Zorpas, A.A.; Tsangas, M.; Jeguirim, M.; Limousy, L.; Pedreno, J.N. Evaluation of renewable energy sources (solar, wind, and biogas) established in Cyprus in the framework of sustainable development. Fresenius Environ. Bull. 2017, 9, 5529–5536. [Google Scholar]
  3. Hydrocarbons Service. Granted Licenses. Available online: http://www.mcit.gov.cy/mcit/hydrocarbon.nsf/page16_en/page16_en?OpenDocument (accessed on 29 September 2018).
  4. CHC. Blocks 6, 8, 10. Available online: http://chc.com.cy/activities/blocks-6810/ (accessed on 16 December 2018).
  5. Taliotis, C.; Howells, M.; Bazilian, M.; Rogner, H.; Welsch, M. Energy Security prospects in Cyprus and Israel: A focus on Natural Gas. Int. J. Sustain. Energy Plan. Manag. 2014, 3, 5–20. [Google Scholar]
  6. US Energy Information Administration. Ch. 2 Natural Gas and the Environment. In Natural Gas 1998 Issues and Trends; Office of Oil and Gas, U.S. Department of Energy: Washington, DC, USA, 1998. [Google Scholar]
  7. World Energy Council. World Energy Resources; World Energy Council: London, UK, 2016. [Google Scholar]
  8. DeMeritt, J.H.R.; Young, J.K. A political economy of human rights: Oil, natural gas, and state incentives to repress. Confl. Manag. Peace Sci. 2013, 30, 99–120. [Google Scholar] [CrossRef]
  9. Lee, C.Y. Oil and Terrorism: Uncovering the Mechanisms. J. Conflict Resolut. 2018, 62, 903–928. [Google Scholar] [CrossRef]
  10. Valenti, W.C.; Kimpara, J.M.; de Preto, B.L.; Moraes-Valenti, P. Indicators of sustainability to assess aquaculture systems. Ecol. Indic. 2018, 88, 402–413. [Google Scholar] [CrossRef]
  11. Büyüközkan, G.; Karabulut, Y. Sustainability performance evaluation: Literature review and future directions. J. Environ. Manag. 2018, 217, 253–267. [Google Scholar] [CrossRef] [PubMed]
  12. Schlör, H.; Fischer, W.; Hake, J.F. Methods of measuring sustainable development of the German energy sector. Appl. Energy 2013, 101, 172–181. [Google Scholar] [CrossRef]
  13. Inglezakis, V.J.; Zorpas, A.A. Environmental indicators. In Sustainability behind Sustainability; Nova Science Publishers, Inc.: Hauppague, NY, USA, 2014; pp. 17–33. [Google Scholar]
  14. Herva, M.; Franco, A.; Carrasco, E.F.; Roca, E. Review of corporate environmental indicators. J. Clean. Prod. 2011, 9, 1687–1699. [Google Scholar] [CrossRef]
  15. EEA. Environmental Indicators: Typology and Overview; European Environmental Agency: Copenhagen, Denmark, 1999.
  16. EEA. EEA Core Set of Indicators; European Environment Agency: Luxembourg, 2005.
  17. Jayawickrama, H.M.M.M.; Kulatunga, A.K.; Mathavan, S. Fuzzy AHP based Plant Sustainability Evaluation Method. Procedia Manuf. 2017, 8, 571–578. [Google Scholar] [CrossRef]
  18. Luthra, S.; Mangla, S.K.; Kharb, R.K. Sustainable assessment in energy planning and management in Indian perspective. Renew. Sustain. Energy Rev. 2015, 47, 58–73. [Google Scholar] [CrossRef]
  19. Li, T.; Roskilly, A.P.; Wang, Y. Regional Life Cycle Sustainability Assessment Approach and its Application on Solar Photovoltaic. Energy Procedia 2017, 105, 3320–3325. [Google Scholar] [CrossRef]
  20. Sharma, T.; Balachandra, P. Benchmarking sustainability of Indian electricity system: An indicator approach. Appl. Energy 2015, 142, 206–220. [Google Scholar] [CrossRef] [Green Version]
  21. Cooper, J.; Stamford, L.; Azapagic, A. Social sustainability assessment of shale gas in the UK. Sustain. Prod. Consum. 2018, 14, 1–20. [Google Scholar] [CrossRef]
  22. Diaz-Balteiro, L.; González-Pachón, J.; Romero, C. Measuring systems sustainability with multi-criteria methods: A critical review. Eur. J. Oper. Res. 2017, 258, 607–616. [Google Scholar] [CrossRef]
  23. Khalil, N.; Kamaruzzaman, S.N.; Baharum, M.R. Ranking the indicators of building performance and the users’ risk via Analytical Hierarchy Process (AHP): Case of Malaysia. Ecol. Indic. 2016, 71, 567–576. [Google Scholar] [CrossRef]
  24. Ameen, R.F.M.; Mourshed, M. Urban sustainability assessment framework development: The ranking and weighting of sustainability indicators using analytic hierarchy process. Sustain. Cities Soc. 2019, 44, 356–366. [Google Scholar] [CrossRef]
  25. Siksnelyte, I.; Zavadskas, E.K.; Streimikiene, D.; Sharma, D. An overview of multi-criteria decision-making methods in dealing with sustainable energy development issues. Energies 2018, 11, 2754. [Google Scholar] [CrossRef]
  26. ISO. ISO 9001:2015 Quality Management Systems—Requirements; ISO: Geneva, Switzerland, 2015. [Google Scholar]
  27. ISO. ISO 14001:2015 Environmental Management Systems—Requirements with Guidance for Use; ISO: Geneva, Switzerland, 2015. [Google Scholar]
  28. Fonseca, L.M.; Domingues, J.P. Reliable and Flexible Quality Management Systems in the Automotive Industry: Monitor the Context and Change Effectively. Procedia Manuf. 2017, 11, 1200–1206. [Google Scholar] [CrossRef]
  29. Pan, W.; Chen, L.; Zhan, W. PESTEL Analysis of Construction Productivity Enhancement Strategies: A Case Study of Three Economies. J. Manag. Eng. 2019, 35, 05018013. [Google Scholar] [CrossRef]
  30. Song, J.; Sun, Y.; Jin, L. PESTEL analysis of the development of the waste-to-energy incineration industry in China. Renew. Sustain. Energy Rev. 2017, 80, 276–289. [Google Scholar] [CrossRef]
  31. Zhang, L.; Guo, S.; Wu, Z.; Alsaedi, A.; Hayat, T. SWOT analysis for the promotion of energy efficiency in rural buildings: A case study of China. Energies 2018, 11, 851. [Google Scholar] [CrossRef]
  32. Hajizadeh, Y. Machine learning in oil and gas; a SWOT analysis approach. J. Pet. Sci. Eng. 2019, 176, 661–663. [Google Scholar] [CrossRef]
  33. Pesce, M.; Shi, C.; Critto, A.; Wang, X.; Marcomini, A. SWOT analysis of the application of international standard ISO 14001 in the Chinese context. A case study of Guangdong Province. Sustainability 2018, 10, 3196. [Google Scholar] [CrossRef]
  34. Quiceno, G.; Álvarez, C.; Ávila, R.; Fernández, Ó.; Franco, C.J.; Kunc, M.; Dyner, I. Scenario analysis for strategy design: A case study of the Colombian electricity industry. Energy Strateg. Rev. 2019, 23, 57–68. [Google Scholar] [CrossRef]
  35. Starr, M.; Joshi, O.; Will, R.E.; Zou, C.B. Perceptions regarding active management of the Cross-timbers forest resources of Oklahoma, Texas, and Kansas: A SWOT-ANP analysis. Land Use Policy 2019, 81, 523–530. [Google Scholar] [CrossRef]
  36. Wang, X.; Li, C.; Shang, J.; Yang, C.; Zhang, B.; Ke, X. Strategic choices of China’s new energy vehicle industry: An analysis based on ANP and SWOT. Energies 2017, 10, 537. [Google Scholar] [CrossRef]
  37. Cayir Ervural, B.; Zaim, S.; Demirel, O.F.; Aydin, Z.; Delen, D. An ANP and fuzzy TOPSIS-based SWOT analysis for Turkey’s energy planning. Renew. Sustain. Energy Rev. 2018, 82, 1538–1550. [Google Scholar] [CrossRef]
  38. Srdjevic, Z.; Bajcetic, R.; Srdjevic, B. Identifying the Criteria Set for Multicriteria Decision Making Based on SWOT/PESTLE Analysis: A Case Study of Reconstructing A Water Intake Structure. Water Resour. Manag. 2012, 26, 3379–3393. [Google Scholar] [CrossRef]
  39. Taliotis, C.; Taibi, E.; Howells, M.; Rogner, H.; Bazilian, M.; Welsch, M. Renewable energy technology integration for the island of Cyprus: A cost-optimization approach. Energy 2017, 137, 31–41. [Google Scholar] [CrossRef] [Green Version]
  40. Theofanous, E.; Kythreotou, N.; Panayiotou, G.; Florides, G.; Vyrides, I. Energy production from piggery waste using anaerobic digestion: Current status and potential in Cyprus. Renew. Energy 2014, 71, 263–270. [Google Scholar] [CrossRef]
  41. Zachariadis, T.; Taibi, E. Exploring drivers of energy demand in Cyprus—Scenarios and policy options. Energy Policy 2015, 86, 166–175. [Google Scholar] [CrossRef]
  42. Serghides, D.K.; Dimitriou, S.; Katafygiotou, M.C. Towards European targets by monitoring the energy profile of the Cyprus housing stock. Energy Build. 2016, 132, 130–140. [Google Scholar] [CrossRef]
  43. Poyadji, K.; Stylianou, M.; Agapiou, A.; Kallis, C.; Kokkinos, N. Determination of Quality Properties of Low-Grade Biodiesel and Its Heating Oil Blends. Environments 2018, 5, 96. [Google Scholar] [CrossRef]
  44. Tsangas, M.; Zorpas, A.A.; Jeguirim, M.; Limousy, L. Cyprus energy resources and their potential to increase sustainability. In Proceedings of the 2018 9th International Renewable Energy Congress, IREC 2018, Hammamet, Tunisia, 20–22 March 2018; pp. 1–7. [Google Scholar]
  45. Team FME. PESTLE Analysis, Strategy Skills; Team FME: Warwickshire, UK, 2013. [Google Scholar]
  46. Fertel, C.; Bahn, O.; Vaillancourt, K.; Waaub, J. Canadian energy and climate policies: A SWOT analysis in search of federal/provincial coherence. Energy Policy 2013, 63, 1139–1150. [Google Scholar] [CrossRef]
  47. Saaty, T.L. The Analytic Hierarchy Process: Planning, Priority Setting, Resource Allocation; McGraw-Hill International Book Co.: New York, NY, USA; London, UK, 1980. [Google Scholar]
  48. Mateo, J.R.S.C. AHP. In Multi-Criteria Analysis in the Renewable Energy Industry, Green Energy and Technology; Springer: London, UK, 2012. [Google Scholar]
  49. Zorpas, A.A.; Saranti, A. Multi-criteria analysis of sustainable environmental clean technologies for the treatment of winery’s wastewater. Int. J. Glob. Environ. Issues 2016, 15, 151–168. [Google Scholar] [CrossRef]
  50. Saaty, T.L. Decision making with the analytic hierarchy process. Int. J. Serv. Sci. 2008, 1, 83–98. [Google Scholar] [CrossRef]
  51. European Commission. Europe 2020 Targets: Statistics and Indicators for Cyprus. Available online: https://ec.europa.eu/info/business-economy-euro/economic-and-fiscal-policy-coordination/eu-economic-governance-monitoring-prevention-correction/european-semester/european-semester-your-country/cyprus/europe-2020-targets-statistics-and-indicators-cyprus_en (accessed on 28 September 2018).
  52. PIO. Invasion/Occupation—Developments. Available online: http://www.aspectsofcyprus.com/consequences-of-the-cyprus-problem/ (accessed on 25 September 2018).
  53. Ministry of Finance. Economic Indicators. Available online: http://mof.gov.cy/en/economic-indicators/macroeconomics/main-economic-indicators/gdp-growth-rate-2013-q1-2018-q2 (accessed on 28 September 2018).
  54. European Commission. The Benefits of the Euro. Available online: https://ec.europa.eu/info/about-european-commission/euro/benefits-euro_en (accessed on 31 December 2018).
  55. Aydin, M. Natural gas consumption and economic growth nexus for top 10 natural Gas–Consuming countries: A granger causality analysis in the frequency domain. Energy 2018, 165, 179–186. [Google Scholar] [CrossRef]
  56. Speight, J.G. Handbook of Offshore Oil and Gas Operations, 1st ed.; Gulf Professional Publishing: Waltham, MA, USA, 2015. [Google Scholar]
  57. HRDA. Electricity and Natural Gas Supply. Available online: http://www.anad.org.cy/images/media/assetfile/D.pdf (accessed on 28 September 2018).
  58. Pierk, S.; Tysiachniouk, M. Structures of mobilization and resistance: Confronting the oil and gas industries in Russia. Extr. Ind. Soc. 2016, 3, 997–1009. [Google Scholar] [CrossRef]
  59. Tan, K.H.; Ortiz-Gallardo, V.G.; Perrons, R.K. Using Big Data to manage safety-related risk in the upstream oil & gas industry: A research agenda. Energy Explor. Exploit. 2016, 34, 282–289. [Google Scholar] [Green Version]
  60. European Commission. SWD (2017) 425 Final; European Commission: Brussels, Belgium, 2017. [Google Scholar]
  61. Faramawy, S.; Zaki, T.; Sakr, A.A.E. Natural gas origin, composition, and processing: A review. J. Nat. Gas Sci. Eng. 2016, 34, 34–54. [Google Scholar] [CrossRef]
  62. Chávez-Rodríguez, M.F.; Dias, L.; Simoes, S.; Seixas, J.; Hawkes, A.; Szklo, A.; Lucena, A.F.P. Modelling the natural gas dynamics in the Southern Cone of Latin America. Appl. Energy 2017, 201, 219–239. [Google Scholar] [CrossRef]
  63. Elbisy, M.S. Environmental management of offshore gas platforms in Abu Qir Bay, Egypt. KSCE J. Civ. Eng. 2016, 20, 1228–1241. [Google Scholar] [CrossRef]
  64. Thrassou, A. Real-time analysis of Cyprus’ embryonic oil and gas industry. EuroMed J. Bus. 2016, 3, 376–402. [Google Scholar] [CrossRef]
  65. BPMSG Software AHP Online System. Available online: https://bpmsg.com/academic/ahp.php (accessed on 28 September 2018).
  66. Gürel, A.; Le Cornu, L. Can Gas Catalyse Peace in the Eastern Mediterranean? Int. Spect. 2014, 49, 11–33. [Google Scholar] [CrossRef]
  67. Shaffer, B. Israel-New natural gas producer in the Mediterranean. Energy Policy 2011, 39, 5379–5387. [Google Scholar] [CrossRef]
Energies 12 00791 g001 550
Figure 1. Exploration blocks and the corresponding licenses holders [4].
Figure 1. Exploration blocks and the corresponding licenses holders [4].
Energies 12 00791 g001
Energies 12 00791 g002 550
Figure 2. Political, Economic, Social, Technical, Environmental, Legal (PESTEL)-Strengths, Weaknesses, Opportunities, Threats (SWOT) analyses combination.
Figure 2. Political, Economic, Social, Technical, Environmental, Legal (PESTEL)-Strengths, Weaknesses, Opportunities, Threats (SWOT) analyses combination.
Energies 12 00791 g002
Energies 12 00791 g003 550
Figure 3. Evaluation problem structure.
Figure 3. Evaluation problem structure.
Energies 12 00791 g003
Energies 12 00791 g004 550
Figure 4. Pairwise comparisons.
Figure 4. Pairwise comparisons.
Energies 12 00791 g004
Energies 12 00791 g005 550
Figure 5. Indicator values size.
Figure 5. Indicator values size.
Energies 12 00791 g005
Energies 12 00791 g006 550
Figure 6. Positive indicators area vs. negative indicators area.
Figure 6. Positive indicators area vs. negative indicators area.
Energies 12 00791 g006
Table
Table 1. Cyprus Hydrocarbons sector sustainability indicators SWOT (Strengths, Weaknesses, Opportunities, Threats) matrix.
Table 1. Cyprus Hydrocarbons sector sustainability indicators SWOT (Strengths, Weaknesses, Opportunities, Threats) matrix.
IndicatorsStrengthsWeaknessesOpportunitiesThreats
Political P1. EU membershipP2. Cyprus problem
EconomicE1. Natural Gas price E2. Cyprus GDP growth
SocialS1. Sector employment needsS2. H & S risks S3. Social acceptance
TechnicalT1. Interconnection pipeline T2. Energy demand rise
EnvironmentalEN1. Natural Gas environmental benefits as fossil fuelEN2. Natural Gas extraction environmental impacts
LegalL1. Legislative context
Table
Table 2. Collected judgements.
Table 2. Collected judgements.
PAIRWISE COMPARISONSFIRST ARE OF ABSOLUTELY HIGHER IMPORTANCEFIRST ARE OF VERY STRONGLY OR DEMONSTRABLY HIGHER IMPORTANCEFIRST ARE OF STRONGLY HIGHER IMPORTANCE FIRST ARE OF HIGHER IMPORTANCE THESE ARE OF EQUAL IMPORTANCE LATTER ARE OF HIGHER IMPORTANCE LATTER ARE OF STRONGLY HIGHER IMPORTANCE LATTER ARE OF VERY STRONGLY OR DEMONSTRABLY HIGHER IMPORTANCELATTER ARE OF ABSOLUTELY HIGHER IMPORTANCE
Environmental issues vs. Political issues211000000
Economic issues vs. Environmental issues002000110
Environmental issues vs. Social issues002110000
Technical issues vs. Environmental issues000010210
Environmental issues vs. Legal issues000010210
Economic issues vs. Political issues201010000
Economic issues vs. Social issues001101100
Economic issues vs. Technical issues021010000
Economic issues vs. Legal issues002010100
Political issues vs. Social issues000120100
Political issues vs. Technical issues011020000
Political issues vs. Legal issues001020100
Social issues vs. Technical issues001110010
Social issues vs. Legal issues110020000
Table
Table 3. Indicators quantification and rank for each expert (AHP (Analytical Hierarchy Process) Online System –BPMSG (Business Performance Management Singapore) results).
Table 3. Indicators quantification and rank for each expert (AHP (Analytical Hierarchy Process) Online System –BPMSG (Business Performance Management Singapore) results).
EVALUATORECONOMY EXPERTENVIRONMENTALISTHYDROCARBONS EXPERTENVIRONMENT EXPERT
NUMBER OF COMPARISONS66666666
CONSISTENCY RATIO (CR):9.2%9.7%8.1%9.8%
INDICATORPriority
(%)		RankPriority
(%)		RankPriority
(%)		RankPriority
(%)		Rank
P1. EU MEMBERSHIP2.6125.873.494.97
P2. CYPRUS PROBLEM3.4115.873.3104.97
E1. NATURAL GAS PRICE15.418.3314.345.55
E2. CYPRUS GDP GROWTH15.418.3314.835.55
S1. SECTOR EMPLOYMENT NEEDS9.236.155.362.410
S3. SOCIAL ACCEPTANCE9.234.9106.552.59
T1. INTERCONNECTION PIPELINE7.463.0114.088.53
T2. ENERGY DEMAND RISE7.463.0112.2117.14
EN1. NATURAL GAS ENVIRONMENTAL BENEFITS AS FOSSIL FUEL7.4821.5118.9225.82
EN2. NATURAL GAS EXTRACTION ENVIRONMENTAL IMPACTS7.4821.5120.4128.91
L1. LEGISLATIVE CONTEXT6.3105.791.7121.712
Table
Table 4. Indicator values.
Table 4. Indicator values.
IndicatorGeometric Mean (%)+/−Value (%)
EN2. NG extraction environmental impacts17.50−−17.50
EN1. NG environmental benefits as fossil fuel16.69+16.69
E2. Cyprus GDP growth10.10+10.10
E1. NG price10.01+10.01
T1. Interconnection pipeline5.24+5.24
S3. Social acceptance5.20−−5.20
S1. Sector employment needs5.17+5.17
S2. H & S risks5.17−−5.17
T2. Energy demand rise4.32+4.32
P2. Cyprus problem4.23−−4.23
P1. EU membership3.98+3.98
L1. Legislative context3.19+3.19

Share and Cite

MDPI and ACS Style

Tsangas, M.; Jeguirim, M.; Limousy, L.; Zorpas, A. The Application of Analytical Hierarchy Process in Combination with PESTEL-SWOT Analysis to Assess the Hydrocarbons Sector in Cyprus. Energies 2019, 12, 791. https://doi.org/10.3390/en12050791

AMA Style

Tsangas M, Jeguirim M, Limousy L, Zorpas A. The Application of Analytical Hierarchy Process in Combination with PESTEL-SWOT Analysis to Assess the Hydrocarbons Sector in Cyprus. Energies. 2019; 12(5):791. https://doi.org/10.3390/en12050791

Chicago/Turabian Style

Tsangas, Michail, Mejdi Jeguirim, Lionel Limousy, and Antonis Zorpas. 2019. "The Application of Analytical Hierarchy Process in Combination with PESTEL-SWOT Analysis to Assess the Hydrocarbons Sector in Cyprus" Energies 12, no. 5: 791. https://doi.org/10.3390/en12050791

Note that from the first issue of 2016, this journal uses article numbers instead of page numbers. See further details here.

Article Metrics

Back to TopTop