Jun 26, 2022
JERUSALEM WEATHER
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During the last century, energy has played a decisive role in the political-military struggles of the Middle East. It was in February 1944 that the head of the U.S. Petroleum Reserves Corporation, Everette Lee DeGolyer, pronounced that “the center of gravity of world oil production is shifting to the Middle East.”

In 2022, we have two related centers of gravity for energy production, and they both threaten the West: Russia and Iran. In the case of Russia, European dependence on Russian gas has undermined the West’s ability to isolate Vladimir Putin for his savage invasion of Ukraine. In the case of Iran, under the guise of a flawed nuclear deal, the West is preparing to lift sanctions on the world’s No. 1 sponsor of terror and a major oil producer.

If there is one lesson the West should have learned in 2022, it is the danger of relying on rogue states for something as fundamental as energy. The Ukraine crisis in particular has illustrated just how vitally important the diversification of European gas sources has become and the urgency of finding alternatives to Russia, if only to reduce Moscow’s leverage over Europe and the NATO alliance.

A pivotal opportunity to reduce that leverage began to emerge in 2009, with the discovery of immense reserves of natural gas off Israel’s coast—up to 381 trillion cubic feet of gas, or roughly 5% of the world’s gas reserves. This came at a time when European energy was becoming increasingly reliant on natural gas and less dependent upon oil and coal.

Experts who looked at Israel’s offshore geology concluded with certainty that much more gas was present. It only required further investment to extract it. After the discovery of the immense Leviathan gas field, with 18 trillion cubic feet of gas, a team of MIT geologists who analyzed the Levant basin reached the conclusion that there were six more Leviathans within Israel’s territorial waters that could potentially hold 108 trillion cubic feet of gas.

The new discoveries near Israel and Cyprus were made by Noble Energy, a Houston-based American firm that was relatively small in comparison with the major energy corporations in the United States. An undersea pipeline was envisioned to transport the gas to the European market across the Mediterranean, a distance of 1180 miles, from Israel to Cyprus and Greece. The European Union got behind the idea of the Mediterranean pipeline.

Moving gas into Europe for hundreds of miles along the ocean floor was not unprecedented. By comparison, the two Nord Stream undersea pipelines carrying Russian gas under the Baltic Sea to Germany were 764 miles long. The new plan for the Mediterranean route included extending what came to be known as the EastMed pipeline from Greece to southern Italy. This way Israeli gas would reach Europe. The European Union designated the pipeline a project of common interest (PCI), which entitled it to many bureaucratic benefits.

An agreement covering the proposed pipeline was signed in 2020 by Israel, Cyprus and Greece. The completion of the pipeline in 2025 and the export of Eastern Mediterranean gas to European markets would serve the European Union’s interest in diversifying its energy sector, which was highly reliant on gas imported from the Russian Federation. Some 40 per cent of the European Union’s natural gas supplies were under Moscow’s control.

What was needed were much larger investors in Eastern Mediterranean gas. To that end, the American energy giant CHEVRON (Standard Oil of California) stepped up, completing its acquisition of Noble Energy in October 2020. Everything was set for a new EastMed gas pipeline to Europe that would be connected to a trusted ally like Israel.

Unfortunately, the Biden administration withdrew its support for the EastMed pipeline in January 2022 for reasons that are still not entirely clear. As the crisis over Ukraine escalated in 2022, forward movement on the EastMed pipeline could have given the West needed leverage for the diplomatic struggle with Moscow. Now that leverage, instead of being under the sea, is up in the air.

Over the years, because of Western complacency, Russia has systematically brought Germany under its influence in the area of natural gas. It nominated the former chancellor of Germany, Gerhard Schroder, to serve on the board of Gazprom, the Russian state gas company, from 2005 onward.

An important alternative to Russian gas could have been nuclear power, which produced about one quarter of Germany’s electricity back in 2011. But after the Fukushima nuclear accident in Japan, Chancellor Angela Merkel began closing down Germany’s nuclear reactors; there were 17 in 2011, but there are now only three. Thus, Germany’s dependence on imported gas has only grown; today, Germany is the single largest European consumer of Russian gas, with 23% of Russia’s total gas exports going to Germany.

In 2018, at least 70% of Russia’s natural gas exports were delivered to E.U. member states. These numbers are important. The impact of a Russian gas cutoff or reduction of supply will vary with the degree of dependence of the European state in question. Similarly, the policies they will advocate for dealing with Russian gas will depend on the extent to which that gas affects their economy.

Even with their differences, the E.U. Foreign Policy chief, Josep Borrell, was able to voice a united policy for Europe in January 2022 based on his view that “we must reduce our dependency on Russian energy.” In the course of the year, it became clearer that Russian gas sales were helping President Putin pay for his war in Eastern Europe against Ukraine.

Coming up with a solution to the Russian gas question for Europe also has an Israeli angle. The new Israeli government headed by Prime Minister Naftali Bennett modified Israeli energy policy; it halted the granting of licenses for natural gas exploration for one year while it devoted its efforts to work on renewable energy, like solar power and wind power.

Whatever the excuses offered by the Israeli Energy Ministry, there was an increasing risk of their jeopardizing one of the State of Israel’s greatest economic opportunities in decades.

With the postponement of Israel’s gas pipeline to Europe, Israeli gas is still sold to its Middle Eastern partners, particularly Egypt and Jordan. With the anticipated improvement of Israeli ties to Turkey, Ankara could emerge as an export hub for Israeli gas in the future. Gas will be a critical factor in the international politics of the Middle East, but not in the way originally expected when Israel’s Mediterranean deposits were first discovered.

Clearly there is a joint interest across the Western alliance to increase the supply of natural gas to the West as a whole. Increased supplies of gas would help drive down its price just as many states are suffering from unprecedented increases in the price of gas and oil. Failing to complete the EastMed pipeline would be a strategic blunder that will only exacerbate the energy crisis at a time when it has already escalated with the outbreak of a major European war.

Whether it’s reducing Western dependence on Russian gas or Iranian oil, the West is way overdue for a course correction.

Reprinted with author’s permission from Jewish News Syndicate