US ‘very concerned’ about Lebanon energy crisis

Energy advisor Hochstein to Lebanon, Israel next month

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The US is “very concerned” about Lebanon’s energy crisis and supports a plan to increase electricity in the crisis-struck country, a senior State Department official said, noting that none of the planned projects would support rehabilitating the Assad regime.

Under a World Bank proposal, backed by the United States, two plans would see Egypt and Jordan sell natural gas and electricity to Lebanon via Syria.

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But the deal would require transit fees being paid to the Assad regime, which has had crippling Caesar Act sanctions prevent foreign countries and companies from dealing with the Syrian government as a result of its war crimes.

The deal was first reported by Al Arabiya English last summer and later confirmed by the US Ambassador to Lebanon Dorothy Shea.

It also comes when multiple Arab countries are reestablishing contact with the Syrian government, including a trip by the UAE’s foreign minister to Damascus and Bahrain’s appointment of an ambassador to Syria for the first time in ten years.

Asked about potential sanctions waivers or the ability for the deal to bolster Syrian President Bashar al-Assad, the US official said no Caesar Act sanctions would be lifted or waived “in this case, or any other case, for that matter.”

Speaking on condition of anonymity, the official insisted: “We do not support efforts to normalize relations with Syria or rehabilitate Assad. And none of these projects that we are currently supportive of are designed to do so. Nor do we believe that they actually will do so.”

With Lebanon suffering from one of the worst economic downfalls in history and very few hours of electricity per day, the official said the plans were “entirely intended” to support Lebanon and the Lebanese people. “And if we do not address the power shortages in Lebanon in the near term, there are great risks of continued degradation of the economy.”

Jordan’s and Syria’s energy ministers are in Beirut to sign separate deals, while Egyptian officials are absent.

Amman’s top diplomat was in Washington last week and reportedly received guarantees that his country would not be sanctioned for a deal that would pump excess electricity to Syria’s power grid and then to Lebanon.

There appear to be a few reasons for the delay in the Egyptian gas export deal.

One of the obstacles is the pipeline portion on the Lebanese territory, which is currently being worked on “right now,” the US official said.

Another consideration is the need for the Lebanese government to implement specific reforms in the energy sector, which the official would not elaborate on.

“We are not asking, and the World Bank is not asking, for the kinds of reforms that are not doable; we’re being very realistic,” the US official clarified, adding that they believed the Lebanese government would follow through. “I think they’re [Lebanon’s government] fully aware of what it means if this effort fails because of [the lack of reforms], and the price Lebanon will pay.”

As for any potential timeline of Egyptian gas reaching Lebanon, the official said the contract needed to be finalized. “We’re about 98 percent there, but sometimes the last 2 percent could be the trickiest,” the official said.

Heads of Lebanon, Jordan and Syria’s state-run power companies sign a deal in Beirut, Jan. 26, 2022. (AFP)
Heads of Lebanon, Jordan and Syria’s state-run power companies sign a deal in Beirut, Jan. 26, 2022. (AFP)

After the Lebanese government approves the needed reforms, the World Bank will approve the plan. Following this phase, the US Treasury Department needs to carry out a final review of the project for potential sanctions violations. “I think we should be okay.

But that’s why this has been an effort to a very strict timeline and format and the contract is specifically there to address and ensure it doesn’t violate sanctions,” the US official said.

The US has said it is looking for more sustainable solutions to Lebanon’s decades long electricity crisis. The most recent plan is expected to provide upwards of 10 hours of additional electricity per day, drawing some criticism over such a short additional period.

However, the US official stressed that the plans were sustainable and had the potential to be long-lasting. This includes possibly injecting more gas from “Qatar and other places,” the official suggested.

“This [first phase] is to get us out of the dark and get us into a process to build something that’s modular and increase over time.”

“We have to start with something; I loathe to look at steps two and three, and we need step one first.”

Separately, Amos Hochstein, the State Department’s senior advisor for global energy security, vehemently denied any deal between Lebanon and Israel related to the electricity and natural gas coming from Egypt.

“There is no deal between Israel and Lebanon on gas from Israel to Lebanon, and no Israeli gas is intended to go into this system to get to Lebanon. I foresee no Israeli gas actually ending up in the Lebanese system, regardless of how we do this,” Hochstein recently stated.

Lebanon-Israel maritime dispute

Hochstein was scheduled to visit Beirut and Tel Aviv this month, but coronavirus issues forced the trip to be rescheduled.

At the heart of the dispute between the two countries, technically in a state of war, are close to 860 square kilometers of water where there are believed to be large swathes of natural gas reserves.

Hochstein is expected to make the trip in the coming two weeks, despite pressing US issues, including Russian aggression on Ukraine threatening global energy supplies.

Lebanon’s PM Najib Mikati meets with US Senior Advisor for Energy Security Amos Hochstein (C)and US Ambassador to Lebanon Dorothy Shea in Beirut. (File Photo: AFP)
Lebanon’s PM Najib Mikati meets with US Senior Advisor for Energy Security Amos Hochstein (C)and US Ambassador to Lebanon Dorothy Shea in Beirut. (File Photo: AFP)

He was last in Lebanon in October.

Initially, Hochstein said he hoped to resolve the dispute by March when Lebanon was scheduled to hold parliamentary elections.

But those elections have since been rescheduled for May.

“We got some extra breathing room, but there is no doubt that this is a relatively short timeframe,” the senior State Department official said.

The official said that US diplomats would not be traveling or involving themselves in such diplomacy if they did not believe two things: “How critically important and how doable it is.”

The official remained tightlipped about the sticking points preventing reaching such a deal.

“We have a window of opportunity, a moment in time, and we need to take advantage of this.”

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