Sunday, January 18, 2009

Is this what Gaza is really all about?

The official explanation for Israel’s military campaign in the Gaza Strip was security, the cynical one was that it was an election year ploy by the Kadima/Labor coalition, which was trailing badly in the polls, but what if there was a different explanation entirely? And what if that explanation was natural gas?

I’ve read a number of blog posts recently suggesting that Israel’s real motivation for invading the Gaza Strip and trying to drive Hamas from power was to gain control over a valuable reserve of natural gas lying just off the coast of Gaza. This morning the Jerusalem Post weighed in on the issue.

Some background – in the 1990s a large natural gas deposit was discovered about 20 miles off the coast of the Gaza Strip. The deposit is estimated to hold at least one trillion cubic feet of natural gas – equal to about 150 million barrels of oil. Under a 1994 agreement between Israel and Palestine, the waters 20 nautical miles out from the Gaza coast were the Palestinians to use for economic development (when the agreement was signed it was assumed that fishing would be the economic activity, they didn’t know about the gas deposits yet).

In late 1999 Yasser Arafat, the PLO Chairman and then de facto leader of the Palestinians, signed a deal with British company BG Group to sink wells in the field. The agreement would give the Palestinians 10% of the profits from the field, with BG getting the other 90%. The main customer for the gas, aside from the Palestinians, would of course be Israel, but then Ariel Sharon took over as Prime Minister and vowed never to buy gas from the Palestinians, so development of the field came to a halt.

After winning a majority of seats in the Palestinian Legislative Council in 2006, Hamas took control of the Gaza Strip. They looked at the BG Group agreement and decided that a 90/10 split for their gas really wasn’t a fair deal (perhaps they remembered Iran’s dealings with the Anglo-Persian Oil Company in the first half of the 20th century – APOC was suppose to pay Iran 16% of the profits from their oil fields, but in practice, thanks to some creative accounting, APOC seldom ever paid Iran anything). Hamas voided the BG Group deal, but said that they would be open to negotiating a new, fairer deal with them in the future.

So here we are – there’s a huge pool of natural gas just sitting off the coast of Gaza, a resource that could bring billions of dollars into a region plagued by grinding poverty. Yet because of the current situation in Gaza/Israel there it sits. The position of the Israeli government, according to the Jerusalem Post, is that not only should the Palestinians stick to the original 90/10 gas deal Arafat signed with BG Group, but Israel (under the convenient catch-all rationale of ‘security’) should also determine how that 10% is spent by the Palestinians, if they don’t spend the money ‘properly’, Israel would have the right to cut off the royalty payments.

Israel is actively moving it’s energy sector away from being oil-based, so that they won’t be dependent on potentially hostile Persian Gulf countries for their energy supply, making the gas off Gaza even more important to them. But their steps to block the Gaza gas field are another example of a self-defeating Israeli policy. There is a clear link between poverty and the willingness of young men - feeling they have no future because of their dire economic situation - to join radical terrorist groups. Billions of dollars in gas revenues would have a dramatic affect on life in the Gaza Strip, helping to give the place an actual functioning economy (the unemployment rate in the Strip is over 50% and many families rely on food assistance from groups like the UN just to survive). That, in turn, would make radical groups like Hamas seem a whole lot less attractive to the Gazans, and isn’t that what Israel ultimately wants?
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