A key cooperation opportunity lies in the field of energy, and specifically alternative energy transportation methods from the Persian Gulf to Europe through the Mediterranean. On a December 2020 visit to Abu Dhabi shortly before leaving office, Former Trump administration Energy Department secretary Dan Brouillette met with his counterparts from the Emirates, Bahrain, and Israel to discuss energy security and the use of pipelines for gas exports. “If we can move natural gas to the coast of Egypt or the coast of Israel, then we’re moving it through the Mediterranean,” he said. He was referring both to the strategic aspect of such a move vis-à-vis Iran, and the importance of diversifying energy export routes from a sensitive region such as the Persian Gulf.

Following a visit to the Emirates in late January, Israeli Energy Ministry Director-General Udi Adiri issued a statement underscoring “the unique opportunity to develop the energy economy of both states and the entire region.” Adiri said his office was promoting a series of infrastructure projects designed to provide a connection to Europe, “and perhaps to Gulf infrastructure in the future. Electricity and natural gas projects will improve regional cooperation.”

It should be noted that the Europe-Asia Pipeline Company (formerly the Eilat-Ashkelon Pipeline Company) signed a memorandum of understanding in October 2020 for the transportation of fossil fuel from the Persian Gulf to Israel. The fuel and oil products from the UAE will be shipped to a Red Sea terminal in Eilat and from there to the Mediterranean Ashkelon terminal for distribution to clients. The signing ceremony was held in the presence of the then-US Treasury Secretary and the Emirati Minister of Economy.

Reports and analyses have also emerged in recent weeks about plans for an overland pipeline through Saudi Arabia to the Mediterranean. These plans have been denied, citing the high costs of such a project, but those involved in the plans appear to be seized with a spirit of creativity.

The diplomatic-strategic rationale is clear. Diversifying gas and oil export routes from the Gulf would reduce the total dependence on the Strait of Hormuz – a narrow, strategic sea route considerably vulnerable to an Iranian attack. In other words, a pipeline running through Saudi Arabia to the Egyptian or Israeli coasts, as mentioned by the former US Energy Secretary, could change the regional energy map and the relationships between the countries involved.

For now, these ideas and plans are all only on paper. However, they have already generated clear concern in Egypt given their possible implications for the Suez Canal.

The head of the Canal Authority has expressed concern about linking the Europe-Asia pipeline to the Persian Gulf. In an Egyptian television interview (January 29) he noted that Egypt was examining ways to deal with the “Israeli-Emirati project” – as he defined it – that could significantly reduce traffic through the canal.

Income from shipping through the canal, it should be noted, is vital to the Egyptian economy, which has already been severely affected by the novel coronavirus crisis. Such plans could also undermine Egypt’s aspirations to become a regional energy hub.

AS PRECIOUSLY noted, the projects’ diplomatic-strategic rationale is sound. The congruence of interests between the Gulf States and Israel, largely based on fear of Iran, could be translated into the energy field.

Nonetheless, Israel has no interest in undermining its relationship with Egypt. Serious thought must be given to integrating Egypt or compensating it appropriately if that is not possible. From an American standpoint, diversifying export alternatives from the Persian Gulf fits its interest in energy security and does not appear to contradict the Biden Administration’s desire to return to the nuclear deal with Iran.

Nonetheless, these plans generate many challenges and question marks. Can the Gulf States and Saudi Arabia adopt such strategic decisions? Is the level of trust with Israel sufficiently high and stable? And if so, can it be preserved and survive future crises? What about the problematic implications for Egypt? And what about the tremendous costs of such an overland pipeline? And of course, what is the position of the new US administration?

In-depth thinking is required to examine the seriousness and feasibility of such plans. Clearly, the Gulf angle opens up a new horizon for relevant players.

Israel is at a strategic-energy crossroads, facing a new range of options. At a news conference (February 14)) alongside the visiting Cypriot president, Prime Minister Benjamin Netanyahu referred to regional cooperation in the post-Abraham Accords era, including energy cooperation. Netanyahu mentioned the UAE’s desire to join the Eastern Mediterranean Gas Forum and reiterated the shared interest in the proposed East-Med gas pipeline to Europe. The Cypriot president presumably asked how the Gulf angle could be combined with the Hellenic one. As far as Israel is concerned, the two could be complementary.

At issue are strategic-scale decisions and projects. The COVID-19 crisis has exacerbated global economic uncertainty and cast a measure of doubt on the feasibility of these energy plans and the willingness of international energy companies to invest significant sums given the unclear post-pandemic economic picture.

Nonetheless, Israel is at a fascinating crossroads with significant room for maneuverability. It must ensure a close relationship with the Biden Administration, a necessary precondition for taking advantage of the maneuvering room it now has. The main obstacle for Israel is clear: to conduct itself in light of US plans to renew the nuclear deal with Iran, and to a lesser extent in light of the ongoing Israeli-Palestinian conflict, in a manner that does not place it on a collision course with Biden’s Washington.

**The article was published on The Jerusalem Post, 6 March 2021.

הפוסט Do the Abraham Accords open up new energy opportunities? הופיע לראשונה ב-Mitvim.

Israel, Cyprus, and Greece have demonstrated an enduring interest in collaborating on an ambitious undersea pipeline that would deliver Israeli and Cypriot gas to Europe. Since 2011, heads of state from these three East Mediterranean states have met on a regular basis and signed MOUs pledging future energy cooperation (in addition to other areas), if and when the climate is right. Italy’s deepening participation in these dialogues only adds to the general sense of enthusiasm surrounding the appropriately named “EastMed pipeline”. Neither consensus between multiple governments nor the European Union’s commitment of $100 million in a feasibility study – a number that sounds significant, but in comparison to the estimated $7 billion pipeline costs, is a drop in the ocean – promises that this vision will become reality. After all, the average Israeli family invests a larger percentage as a down payment for an apartment.

Commercial viability lies at the center of the EastMed pipeline debate. At present, companies like Noble Energy and Delek Group have found more success in smaller, regional deals. The decision to export Israeli gas to Egypt, for example, demonstrates the compelling logic of limited scale projects where there is pre-existing infrastructure. By contrast, the EastMed pipeline – which would be the world’s largest undersea pipeline – requires not only investment and partnership between multiple corporations, but also the patience to endure a longer, more ambitious, and riskier route. Eni, the Italian oil and gas supermajor developing many of Egypt’s reserves and also investing in Cyprus’ waters, might be the perfect partner for such an endeavor, however there is little indication at present that developers are in agreement about the EastMed pipeline’s feasibility and estimated timeline.

If a consortium of corporations did decide to invest in the EastMed pipeline, its members would need to be resolute in the face of the proposed pipeline route’s many anticipated engineering challenges, shifts in the global energy market that may temporarily nullify the economic value of the pipeline, as well as the predictable delays that would accompany an enterprise of this scale. It took four years to connect Tamar field – a modest, 90 kilometer pipeline – to Israel’s coastline, so it is ambitious to imagine that a 2,200 kilometer pipeline would be constructed in similar timetable. So long as shorter, cheaper options are available, it is unclear that the EastMed pipeline will reach the minimal financial investment required to get off the ground.

That doesn’t mean Steinitz is barking up the wrong tree. After all, Israel has signed impactful export agreements with Jordan, Egypt, and the Palestinian Authority. In an increasingly diverse and competitive energy market, one must generate headlines in order to attract investment (on November 5, Israel extended its bid round for offshore exploration licenses), and Steinitz has proven to be a talented frontman for the Netanyahu government’s energy ambitions.

Still, Steinitz’s statement to Israeli TV on November 24 was oddly tone deaf. “For decades, we have complained about the Arab influence in Europe due to oil and gas,” he told Hadashot news, “The export of gas to Europe will moderate this influence to a certain extent and be a counterweight to Arab power.” While historically oil-producing Arab states have wielded outsized international influence because of their central role in the global energy market (and specifically in the case of the Arab-Israeli conflict), many of these states are in the midst of a budding security relationship with the Jewish state. Steinitz seemingly ignores the fact that the selling point of the EastMed pipeline from a European perspective is the opportunity to diversify supply and reduce Russian influence, not necessarily Arab influence. Most importantly, the minister’s claim was based on state-level analysis of energy’s impact, sidestepping the bigger question that Israelis should be asking themselves: how will the EastMed pipeline impact my bottom line?

A major infrastructure project that delivers Israeli gas to Europe would be a historic achievement, strengthening a diplomatic and economic partnership that is essential to Israel’s success. But that doesn’t mean the average consumer is going to feel the difference when they receive their monthly electricity bill, and Israel’s government must make a more concerted effort to explain how it remains in the public interest to support projects like the EastMed pipeline. Failure to do so may result in a wave of protests similar to those that responded to the original natural gas framework. Given that the EU feasibility test is expected to offer its conclusions in 2019, there is no better time for the government to start answering the big questions associated with Israel’s energy policy.

Gabriel Mitchell is a Policy Fellow at the Mitvim Institute, and a PhD Candidate in international relations at Virginia Tech University.

(originally published in Globes)

הפוסט EastMed Gas Pipeline Must Overcome Major Obstacles הופיע לראשונה ב-Mitvim.