Israel's gas may spur Mideast strife, study finds

In an article on "Bloomberg", Harvard's Prof. Meghan O'Sullivan offers possible ways of avoiding conflict, but she is not optimistic.

Israel's offshore natural gas discoveries in the eastern Mediterranean have reduced Israel's worries about the cessation of gas deliveries from Egypt, but are liable to cause regional conflicts, states Prof. Meghan O'Sullivan of Harvard's Kennedy School of Government in an article on "Bloomberg". She also offers possible solutions for avoiding conflict, although she is not optimistic.

O'Sullivan says, "Because nothing is simple in the Middle East, there is also a real threat that these gas discoveries could serve as a spur for conflict rather than economic growth. The Tamar and Leviathan discoveries are generally accepted to fall within Israels exclusive economic zone in the Mediterranean, although Lebanon originally insisted that Leviathan crosses into its waters. Exploration continues, and it could be only a matter of time before a field is discovered straddling contested boundaries."

O'Sullivan points to the 8.3 trillion cubic foot (TCF) Tamar discovery in 2009 and the 16 TCF Leviathan discovery in 2010. "These finds, and the prospect of more in adjacent waters, could be strategic game-changers for Israel. A 2010 US Geological Survey study estimated that the Levant Basin off the coast of Syria, Lebanon, Israel and the Gaza Strip could hold about 1.7 billion barrels of recoverable oil, 122 TCF of recoverable gas and 5 billion barrels of natural gas liquids. If true, Israel could meet its own electricity needs in the future and possibly become a net exporter to a gas-thirsty region. This would bring economic and political benefits as well as regional clout at a time when Israels regional standing is more uncertain than it has been for decades."

However, O'Sullivan suggests scenarios for potential conflict, instead of cooperation. "Imagine a scenario in which a new field is found in Israeli waters but bleeds into the 330-square-mile disputed area where Israel and Lebanons claimed economic zones overlap. It could also run into Cypriot territorial waters. Suddenly, the world could face a situation in which Turkey insists that the field not be developed until the problem of a divided Cyprus is resolved, while Hezbollah threatens to take military action against what it sees as an Israeli effort to commandeer Lebanese national resources. (In December 2010, Hezbollah stated that it wouldnt allow Israel to plunder Lebanons maritime assets.) The US would be pulled in two directions - one by its NATO ally Turkey, the other by Israel."

O'Sullivan suggests two solutions, modeled by her students at Harvard.

The first solution is "politics-before-economics", which posits that the regional conflicts need to be resolved before the gas can be developed, in the hopes that energy riches and economic necessity are enough to push conflicts to resolution. "But optimism should be tempered by reality," she concludes, pointing to the failure of the countries bordering the Caspian Sea to reach an agreement, stalling development of gas and oil fields.

The second solution, based on precedents in South East Asia and the Persian Gulf, is for the countries to agree to disagree about ownership of the gas fields, while reaching limited bargains to develop them, which do not demand final resolution of complex territorial and political disputes.

"These precedents suggest a less ambitious approach to developing eastern Mediterranean gas is worth exploring if more comprehensive peace efforts prove impossible at the time. Too often, politics trumps economics in the Middle East. Let this time be an exception," concludes O'Sullivan.

Published by Globes [online], Israel business news - - on May 22, 2012

Copyright of Globes Publisher Itonut (1983) Ltd. 2012

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