Arab Murmuring Over Israeli Gas Already Begun

Oil In Israel (Link) (March 18, 2010)

Most of the people following the story of Israel�s recent off shore gas discovery and possible onshore oil discoveries see idea of Israel as energy independent and economically prosperous as a good thing. At least that�s the assumption. But not everyone sees Israel�s independence and prosperity as a plus � especially her neighbors.

If the Arab world views Israel (without hydrocarbon resources) as a worrisome usurper and unwelcome squatter today, an economically and energy independent Israel certainly won�t reduce fear and loathing of it�s Jewish neighbor.

It�s easy to predict an Arab response to a massively successful hydrocarbon industry in Israel. If the Jewish State is viewed as a usurper now, the natural response would be that if the land (and the sea) doesn�t belong to Israel, then neither does its natural resources. It�s an issue today; when economic quantities of oil and gas come into play it becomes the issue.

It�s no surprise that the Arab world will cry foul when Israel becomes energy independent, I just didn�t expect to see signs of it this soon. The excerpts below are from a March 11 article in Abu Dhabi�s newspaper, �The National�, written by Dubai-based energy economist Robin M Mills. The piece itself sounds well written and even handed � from an Arabist perspective. The general tone of the article , unsurprisingly, paints Israel as an aggressor and exploiter of the Palestinian people. If this apparently reasonable, thoughtful Arabist response predicts political storm clouds from Israel�s oil and gas success, you can imagine what a more radical response might be.

From �Israel�s new gas fields will do little for peace� by: Robin Mills

Middle Eastern country finds large gas reserves. In our hydrocarbon-rich region, this would hardly be news, were it not for the identity of the country: Israel.

Golda Meir, the former Israeli prime minister, used to joke that Israel was the only place in the Middle East without oil. But in January last year, the US company Noble Energy found gas in the Mediterranean: not as good as oil, but a valuable second prize. More recent drilling confirms it is a giant discovery, probably just the first of several.

Suddenly, Israel can look forward to independence from energy imports, a cleaner environment, maybe even earnings from gas exports. But in this troubled region, such a bonanza is not likely to bring benefits to the Palestinians, nor peace. It may even contribute to further conflict (my emphasis) �.

In a happier situation, these discoveries would be a driver for regional economic integration. Some gas could go to energy-poor neighbours and Israel could join the Arab Gas Pipeline that runs from Egypt up to Syria, and ultimately on to Turkey and Europe.

In such an unstable area, of course, these initiatives are impossible. In reality, any significant exports would be as LNG to Europe, bringing no benefits to neighbouring states.

Tamar has ramifications far beyond business and economics. Earnings from gas would make Israel more able to resist international pressure or boycotts over human rights and peace negotiations, and to weather any reduction in US aid. A secure domestic energy source avoids the need to look to Egypt, where recent legal action has sought to block gas exports to Israel.

Palestinians will feel they have some claim on this gas, but they are unlikely to gain anything from it. The people of Gaza can feel particularly aggrieved. In 1999, the British company BG found a large field offshore Gaza, enough to provide power to all Palestinians for a decade and more, but this gas has never been developed. Indeed, the former Israeli prime minister Ariel Sharon stated that Israel would never buy gas from the Palestinians because it had no intention of giving Hamas a source of revenues.

For the Israelis to exploit this gas themselves would be illegal under international law, and forbidden by the Oslo Agreement. They might have chosen to ignore the diplomatic consequences, but with the discovery at Tamar they can afford to leave Gaza�s gas lying idle indefinitely. In the meantime, Gazans face daily eight-hour electricity blackouts.

Tamar itself appears to lie within Israeli waters. However, with no peace agreement and hence border demarcation between Israel and Lebanon, there is always the possibility of new fields being uncovered in disputed areas, at a time of increasing speculation about an Israeli attempt to settle scores with Hezbollah. �

� This episode is a reminder that, in themselves, oil and gas are neither a blessing nor a curse. Everything depends on what is done with them. In this troubled region, Tamar brings benefits only to Israel, and it has the tragic potential to encourage Israeli intransigence.

In the absence of real progress towards peace, gas discoveries cannot be a force for regional prosperity. In the current circumstances, the best that Israel�s neighbours can do is to try to emulate its success.

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