Energy wars in the Middle East

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Middle East Eye, 26 February 2015

 

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. [...] [T]he Palestinians took their time recruiting British Gas (BG) -- a major player in the global natural gas sweepstakes -- to find out what was actually there. [...]

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.

[...] In 2000, [...], with a rapidly expanding economy, meagre fossil fuels, and terrible relations with its oil-rich neighbours, 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 [...] 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."

With this, the Oslo Accords were officially doomed. By declaring Palestinian control over gas revenues unacceptable, the Israeli government committed itself to not accepting even the most limited kind of Palestinian budgetary autonomy, let alone full sovereignty. Since no Palestinian government or organization would agree to this, a future filled with armed conflict was assured. [...]

When the Palestinians still refused to accept Israel's terms, the Olmert government decided to unilaterally extract the gas, something that, they believed, could only occur once Hamas had been displaced or disarmed. [...]