With so much attention focused on the efforts to impeach President Trump, the alarming spread of the coronavirus, and the untimely passing of basketball legend Koby Bryant, very little notice was paid to a breakthrough deal between Israel and Egypt. That’s unfortunate, because the story is proof of dramatic events unfolding in the Mideast and beyond.
On Wednesday, January 15, Israel signed a deal to export natural gas to Egypt. For starters, this historic agreement signals the end of an era marked by war, contention, and suspicion, and the start of a new one characterized by recognition, alliance, and cooperation. It also places Israel among the world’s major energy exporters.
Yuval Steinitz, Israel’s energy minister, called this the most significant economic cooperation project with Egypt since the peace plan between these two countries was signed back in 1979.
The revenues and profits that will be generated from this deal will boost the Israeli economy. Even more important is that Israel is now an important player in the energy industry in the Middle East and will reap the political benefits that come along with this role.
According to Reuters, the Egyptian energy company Dolphinus Holdings agreed to purchase 85 billion cubic meters of gas from Israel’s Leviathan and Tamar offshore fields in the next 15 years. The deal has an estimated value of $19.5 billion - an amazing turn of events for a small country once thought to have few energy resources. In fact, former Prime Minister Golda Meir once joked that “Moses spent 40 years traveling around the desert and stopped at the only place that has no oil.”
“Important Development”
How things have changed since then! In a joint statement released in Cairo, Steinitz and his Egyptian counterpart, Tarek el-Molla, called the deal an “important development” that would “serve the interests” of both countries.
A pipeline under the Mediterranean will connect gas flowing from Israel’s Leviathan and Tamar gas fields to Egypt’s Sinai Peninsula. Egypt will use some of this gas for its own energy needs, and export the rest to energy-hungry Europe.
US News comments that “The European Union, seeking to reduce its dependence on Russian gas, has encouraged the formation of new delivery routes, including through the eastern Mediterranean. These routes could also curtail Iranian ambitions to use Syria as a gateway to the Mediterranean.” If so, many countries, worried about Iran increasing its influence in the region, will breathe a sigh of relief.
This agreement with Egypt follows another massive pipeline deal Israel inked a few weeks ago. That one, with Cyprus and Greece, also will transport natural gas from the eastern Mediterranean to markets in Europe.
Clean, Green And Available
Clearly, the world is moving away from fossil fuels and toward cleaner energy sources, an unmistakable trend evident from the rapidly growing number of electric vehicles on the highways and the steadily increasing use of wind and solar power projects around the U.S. and the world. Among those are solar power projects that Israel has completed in the Negev, and others now being completed. These projects establish Israel among the “greenest” countries in the world.
As more gas from Leviathan, Tamar, and other offshore gas fields makes its way into Israel, their economy will further wean itself off coal and switch to gas energy, a cleaner burning fuel. “The natural gas revolution turns us into an energy power and affords us not just huge income for the country but also a dramatic decrease in air pollution,” Steinitz said.
The Critics Speak
Not all Israelis are convinced that the country is doing enough to protect the environment. They say that gas tycoons are benefiting unfairly and that the massive investment in these offshore fields has drained too much money away from renewable energy projects.
They also want Israel’s Delek Drilling and its U.S. partner Noble Energy to move their gas rigs farther out to sea to prevent polluted water and air from reaching their homes in the event of an unexpected accident or equipment malfunction.
Delek, Noble, and the Israeli government all assert that strict and effective safety precautions already are in place and that additional measures are unnecessary.
Meanwhile, the development of Israel’s offshore fields is having another unexpected but welcome development: helping improve relations with Arab countries in the region. According to the Wall Street Journal, these agreements are part of a broader U.S.-based effort to build economic alliances between Israel and its neighbors.
Several weeks ago, Egypt presented its first-ever regional gas forum and Steinitz was one of the participants; this is the first time an Israeli cabinet member visited that country since 2011.
“Although past economic agreements with Israel have been controversial in Egypt, where support for the Palestinians runs high, relations have been steadily warming,” writes US News.
Incidentally, Israel already sells small quantities of gas to the Palestinians and to Jordan, and as more supplies come on stream, those quantities may increase.
On a related matter, the Zohr gas field, discovered off the coast of Egypt in 2015, is believed to be the largest in the Mediterranean. It’s interesting that despite having massive quantities of its own gas, Egypt has signed a long-term agreement to purchase more from Israel. Why would they do that? Who can say? After all, we’re talking about the Middle East. And who can figure out the mysteries there?
Sources: jns.org; reuters.com;
usnews.com; wsj.com.
Gerald Harris is a financial and feature writer. Gerald can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it.
