Friday, 27 February 2015

The Great Game in the Holy Land - How Gazan Natural Gas Became the Epicenter of An International Power Struggle

Guess what? Almost all the current wars, uprisings, and other conflicts in the Middle East are connected by a single thread, which is also a threat: these conflicts are part of an increasingly frenzied competition to find, extract, and market fossil fuels whose future consumption is guaranteed to lead to a set of cataclysmic environmental crises.
Amid the many fossil-fueled conflicts in the region, one of them, packed with threats, large and small, has been largely overlooked, and Israel is at its epicenter. Its origins can be traced back to the early 1990s when Israeli and Palestinian leaders began sparring over rumored natural gas deposits in the Mediterranean Sea off the coast of Gaza. In the ensuing decades, it has grown into a many-fronted conflict involving several armies and three navies. In the process, it has already inflicted mindboggling misery on tens of thousands of Palestinians, and it threatens to add future layers of misery to the lives of people in Syria, Lebanon, and Cyprus. Eventually, it might even immiserate Israelis.
Resource wars are, of course, nothing new. Virtually the entire history of Western colonialism and post-World War II globalization has been animated by the effort to find and market the raw materials needed to build or maintain industrial capitalism. This includes Israel's expansion into, and appropriation of, Palestinian lands. But fossil fuels only moved to center stage in the Israeli-Palestinian relationship in the 1990s, and that initially circumscribed conflict only spread to include Syria, Lebanon, Cyprus, Turkey, and Russia after 2010.
The Poisonous History of Gazan Natural Gas
Back in 1993, when Israel and the Palestinian Authority (PA) signed the Oslo Accords that were supposed to end the Israeli occupation of Gaza and the West Bank and create a sovereign state, nobody was thinking much about Gaza's coastline. As a result, Israel agreed that the newly created PA would fully control its territorial waters, even though the Israeli navy was still patrolling the area. Rumored natural gas deposits there mattered little to anyone, because prices were then so low and supplies so plentiful. No wonder that the Palestinians took their time recruiting British Gas (BG) -- a major player in the global natural gas sweepstakes -- to find out what was actually there. Only in 2000 did the two parties even sign a modest contract to develop those by-then confirmed fields.
BG promised to finance and manage their development, bear all the costs, and operate the resulting facilities in exchange for 90% of the revenues, an exploitative but typical "profit-sharing" agreement. With an already functioning natural gas industry, Egypt agreed to be the on-shore hub and transit point for the gas. The Palestinians were to receive 10% of the revenues (estimated at about a billion dollars in total) and were guaranteed access to enough gas to meet their needs.
Had this process moved a little faster, the contract might have been implemented as written. In 2000, however, with a rapidly expanding economy, meager fossil fuels, and terrible relations with its oil-rich neighbors, Israel found itself facing a chronic energy shortage. Instead of attempting to answer its problem with an aggressive but feasible effort to develop renewable sources of energy, Prime Minister Ehud Barak initiated the era of Eastern Mediterranean fossil fuel conflicts. He brought Israel's naval control of Gazan coastal waters to bear and nixed the deal with BG. Instead, he demanded that Israel, not Egypt, receive the Gaza gas and that it also control all the revenues destined for the Palestinians -- to prevent the money from being used to "fund terror."