Feeding Lebanon’s energy and securing maritime border needs government commitment

Hanin Ghaddar
Hanin Ghaddar
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Lebanon’s energy sector has been the focus of the international community through two initiatives: the maritime border demarcation with Israel and the electricity and gas deals with Jordan and Egypt. Both endeavors require high-level diplomatic engagement with the Lebanese government and state institutions, but none involves any severe pressure on the Lebanese political elite to implement reforms.

At their best, these diplomatic plans might help provide some very much-needed hours of electricity to the Lebanese people, but they will not fix the real problem in the long term. Without reforms, these solutions are not sustainable.

The maritime border negotiators have been going on for many years. Still, the new US envoy Amos Hochstein visited Beirut in early February with a new proposal, offering more than the Hof Line -- a demarcation zone proposed by Frederic Hof in 2012. According to local media, Lebanon’s share might expand in zigzag lines within a 1430-kilometer area created by the new boundary; less than Lebanon considers its property rights.

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Lebanon has a deadline of four to six weeks to respond to Hochstein’s offer. But in a surprising move on February 16, President Michel Aoun announced that he accepts the proposal, sidelining the Lebanese army, which has coordinated with Aoun to send a letter to the UN “to shift negotiations on the southern maritime border; from Line 23 to Line 29.”

It is indeed a step forward as the Lebanese hope that the commercially viable hydrocarbon resources off the coast could help the country out of its financial crisis. Israel could accept as it has been pushing for speeding up the negotiations to start drilling for gas in the disputed Karish field. Of course, Aoun could still be a political maneuver to marginalize the army and its presidential-hopeful commander, General Joseph Aoun, ahead of the parliamentary and presidential elections. In addition, Hezbollah has not commented on this issue yet, and will probably wait until the Vienna talks conclude before giving away a negotiations card with the US.

In any case, whatever profits these resources might bring, the Lebanese people will probably benefit the least. The current corrupt political class will ensure to siphon the financial benefits to themselves and not to the state and the people.

Negotiating with this current class of politicians will only boost their chances ahead of elections and allow them to use the talks as a bargaining chip to serve their interests.

A United Nations ship is pictured in the southernmost area of Naqura, by the border with Israel, on October 14, 2020. Lebanon and Israel, still technically at war, began unprecedented talks sponsored by the United Nations and the United States today to settle a maritime border dispute and clear the way for oil and gas exploration. (Stock photo)
A United Nations ship is pictured in the southernmost area of Naqura, by the border with Israel, on October 14, 2020. Lebanon and Israel, still technically at war, began unprecedented talks sponsored by the United Nations and the United States today to settle a maritime border dispute and clear the way for oil and gas exploration. (Stock photo)

Meanwhile, the US is facilitating another energy-related initiative to bring to Lebanon electricity from Jordan and gas from Egypt. While the maritime border boundaries are political, these deals are part of the humanitarian aid policy that the Biden administration has developed to help Lebanon. Accordingly, the World Bank is supposed to fund the logistics, pipes reconstruction, and the rehabilitation of the power stations assigned to produce power.

The problem with these deals is that electricity and gas are going through Syrian territory, and the Assad regime will benefit by taking a share of around ten percent and a say in the matter. For pure humanitarian reasons, the US assured all countries involved that there won’t be any repercussions from the Caesar Act sanctions targeting the Syrian regime. If all goes well, and the World Bank finally approves the funding, Lebanon will get about two full hours of electricity in total from Jordan, and probably the same via the Egyptian gas. But considering all the concessions that these deals involve, is it worth it?

Besides involving the Assad regime, the United States, Jordan, and Egypt will have to work through a government where Hezbollah and its allies still enjoy the blocking third veto. All corruption is being covered and protected. Providing electricity to Lebanon could also demotivate the Lebanese government from implementing critical reforms to the sector. It will also allow the current political elite to leverage energy assistance for elections.

These are short-term fixes and will not resolve the problem. Only sustainable energy policies and reforming the sector could offer long-term solutions. Like every problem in Lebanon, it begins with corruption and bad management. Still, the potential funder of these initiatives is the World Bank, which has already offered detailed recommendations to reform the sector.

These include appointing a regulator, modernizing the transmission grid, adding gas-fired fuel stations, changing fuel stock to natural gas, reforming electricity tariffs, and promoting decentralized renewable energy applications.

Without reforms, the electricity sector, which suffered losses of up to $2 billion in 2018, cannot serve its primary function. These reforms will benefit Lebanese electricity consumers and restrain those who corruptly benefit from the current reliance on private generators.

Both the maritime border demarcation talks and the electricity and energy deals are good for Lebanon in the long run, and Washington can do more to help the Lebanese people. For example, the US support for the World Bank to fund the plans and the negotiations its envoy is carrying between Lebanon and Israel should come with an explicit requirement to the Lebanese government to implement comprehensive energy sector reforms. These requirements would ensure that the Lebanese people – not the corrupt political class – benefit in the long run. The goal should always be to strengthen state institutions – not political parties.

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