Elections in Turkey and Gas Discoveries in Egypt Bode Ill for Israel’s Natural-Gas Industry

July 13 2018

While the dictates of economics, geography, and technology suggest that Turkey would be the best possible market for the natural gas beneath Israel’s coastal waters, politics dictate otherwise. Recep Tayyip Erdogan, recently reelected to the Turkish presidency, has been hostile to the Jewish state since first coming to power, and is unlikely to be eager to set up a gas pipeline between the two countries. But, write Oded Eran and Elai Rettig, further gas extraction is only worthwhile if the gas can be exported, and it is now unclear whether Egypt, the only viable alternative to Turkey, will be any more receptive:

Turkey’s regional relations in general, and with Israel in particular, do not provide the gas companies with the stability required to build an inter-state pipeline and sign off on such capital-intensive contracts. Although the deterioration of Turkish-Israeli bilateral relations that began in late 2008 was halted temporarily by the normalization agreement signed in June 2016, it resumed with even greater intensity over the past year with the violent events on the Temple Mount and in the Gaza Strip. . . . It is currently doubtful that Erdogan will approve an agreement whereby Israeli companies supply natural gas to Turkey. It is also doubtful that the gas companies themselves will agree to incur the risk of relying on a Turkish president so hostile toward Israel. . . .

A greater worry [stems from] reports on a new gas-field discovery in Egypt, [which preclude] Israel’s use of the liquefaction facilities in Egypt. The new field, if confirmed, will meet the Egyptian demand for natural gas for the foreseeable future and will rekindle Egypt’s desire to export liquid gas to Europe through its underutilized facilities. New Egyptian discoveries leave no room to accommodate Israeli gas and will create additional hurdles for Israel’s desire to reach the European market, [since the most efficient way to get the gas to Europe would be first to send it to Egypt for liquefaction]. Although a new and larger Egyptian gas field could encourage the construction of an additional liquefaction facility in Egypt or the expansion of the existing facilities, any such addition would require a substantial investment of time and capital.

The natural gas that was discovered in Israel’s [coastal] waters has the potential to generate immense profits and revenue, as well as to improve Israel’s relations with its neighbors. However, the prolonged internal political process within Israel regarding the development of the reserves, the method of taxation, and the ratio between domestic use and exports, in addition to the recent developments in Turkey and Egypt, make it difficult for Israel to realize these benefits. . . .

[E]ven in the most optimistic of scenarios, the Israeli economy cannot itself absorb a large enough volume of gas in the coming years to justify the capital investment needed for the development of the Leviathan gas field. If the gas export deal with Egypt does not materialize, the gas partners will become dependent on the relatively small export deal with Jordan as their only anchor. . . . Therefore, gas companies should push for the rapid implementation of the export deal with Egypt while the Egyptian gas shortage continues. In turn, the Israeli government should provide behind-the-scenes assistance in this matter to the extent necessary.

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More about: Egypt, Israel & Zionism, Natural Gas, Turkey

Russia Has No Interest in Curbing Iran in Syria—Despite Putin’s Assurances

July 20 2018

In his joint press conference on Monday with Vladimir Putin, Donald Trump stated that in their meeting he had brought up U.S. concerns about the Islamic Republic’s malign influence in the Middle East, and that he’d “made clear [to Putin] that the United States will not allow Iran to benefit from [America’s] successful campaign against Islamic State.” It does not appear, however, that any concrete agreements were reached. To Alexandra Gutowski and Caleb Weiss, it’s clear that agreements will do little, since Putin can’t be trusted to keep his word:

In late June, Russia began to unleash hundreds of airstrikes on [the southwestern Syrian province of] Deraa, in flagrant violation of the U.S.-Russian cease-fire agreement that Trump and Putin personally endorsed last November. While Russia struck from the air, forces nominally under the control of Damascus conducted a major ground offensive.

Closer examination shows that the dividing line between Assad’s military and Iranian-aligned forces has become ever blurrier. Before the offensive began, Lebanese Hizballah and other Iranian-backed militias staged apparent withdrawals from the region, only to return after donning [Assad]-regime uniforms and hiding their banners and insignia. Tehran is also directly involved. On July 2, a senior commander of Iran’s elite Islamic Revolutionary Guard Corps (IRGC) died in Deir al-Adas, a village in northern Deraa province along the strategic M5 highway. Persian sources describe him as the commander for the province. [In fact], forces nominally under the control of Damascus are permeated with troops that are at least as close to Tehran. . . .

It’s also becoming clear that Russian aircraft are supporting the efforts of Iranian-backed units nominally under the control of Damascus. . . . Russia has also now deployed military police to hold terrain captured by Iranian-aligned forces, demonstrating a level of coordination as well as Russia’s unwillingness to use its forces for more dangerous offensive operations. These terrain-holding forces free up Iran-aligned actors to continue undertaking offensives toward the Golan.

Reported meetings between militia commanders and Russian officers suggest these operations are coordinated. But even without formal coordination, Russian air cover and Iranian ground offensives are mutually dependent and reinforcing. Iran can’t be in the sky, and Russia refuses to put significant forces on the ground, lest too many return home in body bags. Thus, Putin requires Iran’s forces on the ground to secure his ambitions in Syria.

President Trump should remain highly skeptical of Putin’s interest in serving as a partner in Syria and his ability to do so. The humanitarian relief Putin proposes [for postwar reconstruction] is designed to fortify the regime, not to rehabilitate children brutalized by Assad. Putin also has limited interest in curtailing Iran’s deployment. Russia itself admits that Iran’s withdrawal is “absolutely unrealistic.” Trump should not concede American positions, notably the strategic base at Tanf which blocks Iran’s path to the Mediterranean, for empty promises from Russia. Putin can afford to lie to America, but he can’t afford to control Syria without Iranian support.

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More about: Donald Trump, Iran, Politics & Current Affairs, Syrian civil war, U.S. Foreign policy, Vladimir Putin