A bonanza under Mediterranean waters

Yossi Mekelberg
Yossi Mekelberg
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Jubilant statements by Israeli politicians followed by triumphant newspaper headlines welcomed the first batch of natural gas extracted from the Tamar gas field in the Mediterranean basin last month. The gas field is located in Israel's exclusive economic zone, around 50 miles west of Haifa. It took four years to construct an infrastructure for the extraction of this valuable natural resource, including the laying of hundreds of miles of underwater pipes for transporting the gas to a reservoir in the south of the country.

Suddenly, a country whose citizens used to half-jokingly complain that Moses led them (wrongly) to one of the only parts of the region with scarce natural resources, finds itself in the midst of an energy bonanza. However, as always with new found wealth, it doesn’t come without challenges and disputes, in this case both domestically and internationally.

Domestically, a public row erupted regarding the national strategy for use of this resource; internationally the disagreement is about commercial rights and ownership in disputed maritime borders. Seeing as natural resources do not recognise political borders, some of these fields are in the territorial waters of Lebanon, Palestinian Territories (Gaza), Syria and Cyprus. Exploiting these fields could and probably should lead towards a necessary regional co-operation. Nevertheless, considering the turmoil the Middle East is experiencing, it might also lead to more disputes and conflict. For those who need a historical reminder, the European Union vision started in 1951 with a relatively modest Steel and Coal Treaty. The French Foreign Minister at the time, Robert Schuman, envisaged only few years after the devastation caused by the Second World War, that world peace can be realised through economic cooperation and development. His vision led to decades of peace and prosperity.

The situation in the Eastern part of the Mediterranean basin is far from being ripe for such a historical leap. Nonetheless, some of the political actors should take initial steps to ensure that the discovery of natural gas be used for the benefit of their citizens, and certainly avoid making it another source of conflict. An additional possible point of contention is Israel granting international investors the right to explore, oil in the West Bank and the Golan Heights.

The discovery of massive gas fields off the shores of Israel might alter her situation from almost complete dependency on energy imports to a net exporter. The combined gas reserves in the Tamar field and the Leviathan field, where production will start within the next 4 years, amount to an estimated 810 billion square meters. According to all estimates this will ensure Israel’s energy supply for many decades, depending on how much of the gas it intends to export. Public debate was sparked in Israel, due to the intention of the companies holding rights for these natural gas fields to export some of it. The question remains as to what proportion of the gas should be exported. As it stands now it seems that the government intends to allow half of the natural gas to be exported and thereby guarantee, according to some estimates, at least 25 years’ supply for the Israeli energy market.

The exploration of natural gas couldn’t come at a better time for Israel. In the aftermath of the fall of the Mubarak regime, Israel stopped receiving preferential treatment in the supply of natural gas from Egypt. This agreement, part of the economic annex of the peace treaty, was unpopular in Egypt, and many Egyptians saw it as part of the corrupt handling of the economy under former president. Following his downfall, the gas pipeline from Egypt to Israel has been bombed at least 15 times by militants, and eventually Egypt terminated its agreement to supply Israel with gas last year, quoting a business dispute as its reason for doing so. What was a vital source of energy supply was rendered almost insignificant following the discovery of the new fields.

International reaction to the announcement of the discovery of the Tamar and Leviathan gas fields varied from disputing Israeli right to it by its immediate neighbours, to eagerness to collaborate in developing and marketing it. Lebanon, who is in desperate need of income to clear some of its national debt, reacted immediately claiming that the field extends into the Lebanese maritime zone. Formally both countries are in a state of war and the maritime border between them has never been agreed. Any negotiations between the two countries, especially under the current circumstances, are a remote possibility. Since 2010, both sides have exchanged belligerent statements. The leader of the Shia Amal movement said in the past that, “Lebanon’s army, people, and resistance will be ready to thwart any attempt to steal its natural resources,” implying that the Hezbollah was onboard as well on this issue. Israeli officials in return reiterated that the government would not hesitate to use force to defend its gas fields. Even though these kind of hostile statements are not heard that often in the absence of direct negotiations or international arbitration, they only add to already tense relations between the two countries.

Disagreements appear also between Israel and the Palestinians over developing natural gas off the shores of Gaza. Israel will not negotiate with the Hamas over it (and vice versa), and the Palestinian Authority has very little influence on Gazan affairs. The unfortunate result is that a natural gas reservoir estimated at $4 billion, a substantial sum of money for the ailing Palestinian economy, is falling victim to the lack of peace or any constructive channel of communication between Israel and Palestinians. A further area which became focal point for exploration of oil is the occupied Golan Heights. In February it was disclosed that the Israeli government has awarded the first license to drill for oil on the Golan Heights to the Israeli-American company Genei Energy Ltd. As the civil war in Syria worsens, Israel will most likely ignore any protestation by the Syrians that this violates international law. If oil is found in the Golan, it might serve either as another issue of contention or as a catalyst for both sides to use it as a bargaining chip in negotiating a comprehensive peace agreement.

Israel’s improving status in the energy market results in ongoing flirtation from Turkey about a pipeline for its gas, from Russia’s Gazprom who agreed to market Israeli liquified gas and Greece and Cyprus who would like to collaborate on developing gas fields. However, there is no Schuman like statesman who would see the potential in this newly found wealth as a vehicle and catalyst for peace and cooperation. Instead the future of this underwater invisible gold will be decided by the most powerful and will probably end enriching the already wealthy.

Yossi Mekelberg is an Associate Fellow at the Middle East and North Africa Program at the Royal Institute of International Affairs, Chatham House, where he is involved with projects and advisory work on conflict resolution, including Track II negotiations. He is also the Director of the International Relations and Social Sciences Program at Regent’s University in London, where he has taught since 1996. Previously, he was teaching at King’s College London and Tel Aviv University. Mekelberg’s fields of interest are international relations theory, international politics of the Middle East, human rights, and international relations and revolutions. He is a member of the London Committee of Human Rights Watch, serving on the Advocacy and Outreach committee. Mekelberg is a regular contributor to the international media on a wide range of international issues and you can find him on Twitter @YMekelberg.

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