While climate change is hammering the Middle East, and as Syria and Iraq are engulfed in war (Valantin, “Climate nightmare in the Middle East”, The Red Team Analysis Society, September 14, 2015), Egypt and Israel are going through a profound energy revolution.
In effect, since 2011, Israel has discovered two giant natural gas off-shore deposits (Valantin, “Israel, Natural Gas and Power in the Middle East”, The Red Team Analysis Society, April 27, 2015) while in August 2015, the oil Italian company ENI has discovered a mammoth off-shore natural deposit in the Egyptian economic exclusive zone (Anthony Dipaola, “ENI discovers massive gas fields in the Mediterranean”, Bloomberg Business, August 30, 2015).
In other terms, these two countries are transforming themselves into a new, and quite strange breed of energy power.
During the first sixty years of its existence, Israel has no access to energy natural resources. On the contrary, Egypt has been an important exporter of natural gas during the same period. In effect, Egypt is a large producer and exporter of natural gas. Its proven reserves of 77 trillion cubic feet are the highest in Africa after Nigeria and Algeria (Egypt, Energy information Agency, June 2, 2015).
When the supply available for trade is not disrupted by attacks and by the rapidly growing domestic demand, Egyptian dry natural gas is exported through the Arab Gas Pipeline to Jordan, Syria and Lebanon, with a Mediterranean sub-sea segment joining El Arish to Ashkelon in Israel. Indeed, in 2012, Egypt became an importer because of the bombings on the pipelines that year and the decrease in production (Egypt, Energy information Agency, ibid; Gismatullin, “Egypt importing gas for the first time as export disappear”, Bloomberg Business, December 11, 2012). Thus, the ENI discovery has the potential to change again the energy situation for Egypt.
The Israelis and Egyptian natural gas discoveries are transforming the status of these countries through their mutation not only into gas producers, but also into new energy, hence strategic and political powers.
They are acquiring this status that has eluded them during the whole twentieth century, when other Middle East countries, such as Saudi Arabia, Iraq, Iran, or Kuwait, were harnessing their development to their more or less important oil and gas deposits and were becoming the centre of the world competition for energy (Michael Klare, Rising Powers, Shrinking Planet, 2008).
Now, in 2015, Israel and Egypt are becoming energy power. They are on the front line of the current race for every new deposit of oil or natural gas anywhere in the world (Marin Katusa, The Colder War, 2014).
Shifting a shifting balance of power
The discovery of the new Egyptian natural gas deposit might be quite destabilizing for Israel, as it might somehow question Israel’s own path to becoming a new energy power through the exploitation of the Tamal and Leviathan off-shore natural gas fields. The Tamar and the Leviathan fields hold respectively 10 and between 19 and 22 trillion cubic feet of gas of estimated reserves, which could ensure decades of domestic consumption as well as exports (Katusa, ibid).
In effect, since the beginning of 2015, the Israeli political authorities have decided to sell gas to Jordan and to Egypt, which could import from 145 to 210 million cubic feet of LNG per day during 2015 (“Egypt’s petroleum minister increases purchase price of gas from new developments”, Natural Gas Europe, March 24th, 2015).
Thus, for Israel, selling natural gas to Egypt and Jordan was a way to secure and sustain its new status in the region.
However, this political and strategic change is already challenged by the ENI discovery.
Israel was planning to use the sale of gas to Egypt as the main driver for the development of the Leviathan field (Steve Levine, “A gigantic natural gas discovery in Egypt means Israel has to find a new customer for its gas”, Quartz, August 31, 2015), which has accumulated multiple delays because of Israeli’s internal political and judiciary conflicts about the legal status of the energy developers (Scott Belinsky, “Not everyone is happy about latest’s Egypt gas discovery”, Oil Price, 03 September 2015). Meanwhile, the tensions with the Palestinian Hamas do not change and are entangled with the political tensions in Israel.
In this context, the Egyptian discovery could be profoundly questioning the Israeli energy strategy, while the south of the Mediterranean Sea is witnessing the emergence of two important gas natural powers.
To collapse or not to collapse?
However, Egypt and Israel are not simply potential competitors on the natural gas market. They are also both impacted by the destabilization of the whole region, through the rise of extremely violent and armed militant Islamism (Helene Lavoix, Portal to the Islamic State War, The Red Team Analysis Society), combined to the rise of extreme economic and social inequalities (Hamit Bozarslan, Révolution et état de violence, Moyen-Orient, 2011-2015), and growing politico-environmental tensions.
These developments turn these two countries into emerging energy power in a region on the verge of collapse (Jean-Michel Valantin, “Environment, climate change, war and state”, The Red Team Analysis Society, 16th march, 2015).
In effect, the Egyptian government, led by President Abdel Fattah el-Sisi, must fight different Islamist insurgencies, especially the growing presence of guerrillas, which have pledged allegiance to the Islamic State in the Sinai. Since 2011, violent militant Islamism has grown continuously. The Egyptian army and police are leading a war against these groups (Lally Weymouth, “Egyptian President Abdel Fattah Al Sisi who talks “a lot” with Netanyahu, says in country in danger of collapse”, The Washington Post, March 12, 2015).
This situation leads the Egyptian government to buy armaments to Russia and France, in order to intensify their strategic efforts against the jihadis, who work at installing a radical religious regime in Egypt (Jamey Kiten, “France: Egypt first foreign buyer of Rafale fighters Cairo purchases 24 multi-role jets as part of $6 billion defence deal », Times of Israel, February 13, 2015).
This internal war is embedded in a very profound social and economic crisis, which comes from the growth of inequalities since the 1980s, and the fact that, through the development of education and the access to the internet, the different social groups that constitute the society have become aware of these inequalities (Bozarslan, ibid). This creates new political conditions, which are expressed through different forms of protests, and are profoundly changing the Egyptian political field.
In the same time, the war conditions have a repulsive effect on tourism flows and a negative impact on the energy infrastructures, thus threaten both social cohesion and economic activity. (Jean-Michel Valantin, “Security and sustainability: the future of Egypt?”, The Red (Team) Analysis Society, April 28, 2014).
Given this situation, the off-shore natural gas discovery, which is going to attract investments and a renewed strategic attention, has the potential to reinforce the capacity of the Egyptian government to protect the population.
In effect, selling natural gas generates important and permanent financial cash flows, much-needed by the Egyptian government in order to guarantee public services, the military and, most importantly, the capacity to buy food, especially wheat, on the international market, without which the population is threatened with hunger (David P. Goldman, “Wheat at record is the worst thing that could happen to Egypt“, Gatestone Institute, July 20, 2012).
In Egypt, the lack of wheat, or rising food prices, can trigger violent urban riots and support the proselytising of radical Islam militancy (Shadia Nasralla and Shamine Saleh, “Egypt food supplies Shake Up sees officials deferred to prosecutor“, Reuters, 24 February 2014).
Furthermore, this new energy input is going to be extremely useful to support the adaptation of Egypt to the effects of climate change (Valantin, “Egypt and climate security”, The Red Team Analysis Society, May 12, 2014), which can be anticipated through the consequences of the violence of extreme weather events and their brutality for people, infrastructures and social cohesion as the long and extreme heat wave during the summer of 2015 has shown (Valantin, “Climate nightmare in the Middle East”, The Red Team Analysis Society, September 14, 2015).
This means that natural gas is going to become a main support for the legitimacy of the Egyptian government, and can help slow the dynamics of violence and decay of this influential country in the Middle East.
The new energy Egyptian-Israeli nexus?
The development of the Egyptian off-shore natural gas deposit by ENI will necessitate some time, during which Egypt will continue to buy gas from Israel. The Israel political authorities, knowing that this situation will not last, are going to be put under strong pressure to define a clear energy strategy for their country (Belinsky, ibid).
This pressure is building up because of the convergence of the necessity to find new markets for the leviathan gas field with the profound changes occurring in the Middle East energy configuration. The latter results from the creation of the Russian “blue stream” gas pipe-line in Turkey (“Gazprom to build new 63 bcm Black Sea pipeline to Turkey instead of South Stream”, Russia Today, December 1, 2014) added to the new Chinese energy strategy with Iran (“China, Pakistan sign gas pipeline deal key to Iran imports”, Press TV, April 21, 2015) and to the coming end of the energy embargo on Iranian exports.
In the same time, Israel and Egypt are, now, sharing the same strategic problem with the growing presence of radical Islamist militancy, especially stemming from the Islamic State (IS), because of the multiple attacks led by the IS in the Sinai against the Egyptian army, and its challenge to the Palestinian Hamas (“Islamic State threatens to topple Hamas in Gaza strip in video statement”, The Guardian, 30 June 2015).
In other terms, the coming development of the Egyptian natural gas off-shore deposit will take place in a strategic context dominated by the convergence of the Egyptian and Israel strategic interests.
This strategic “competitive cooperation” is going to be profoundly influenced by Russia’s and Iran’s current power games in the region.
To be (soon) continued.
Jean-Michel Valantin, (PhD Paris) leads the Environment and Security Department of The Red (Team) Analysis Society. He is specialised in strategic studies and defense sociology with a focus on environmental geostrategy.
Featured image: Border between Israel and Egypt visible from space, NASA/Chris Hadfield, Public Domain.