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Tuesday, November 27, 2012

Follow the energy

Some intriguing news items:
Egypt would consider importing natural gas from Oman and Equitorial Guinea, Petroleum Minister Osama Kamal said on Monday.

Egypt imports gas to meet developmental need targets as established by the government, Kamal said, adding that there is a growing need for gas in Egyptian power stations.
But Egypt also exports gas - to Jordan (and formerly to Israel.) The supply has been disrupted both because of Islamists bombing the pipeline to Israel and because of Egypt's own shortages. As a result, Jordan also suffers a gas shortage.

That shortage, and Jordan's decision to end subsidies on fuel, helped spark the deadly riots that Jordan has been suffering from.

And Iran might be trying to leverage this to its advantage:

The Iranian ambassador to Amman Mostafa Moslehzadeh declined the rumors about Iran's readiness to supply Jordan with free energy resources for 30 years, the Mehr News Agency reported.

The Jordanian newspaper Ammon News on November 22 quoted Moslehzadeh as saying that Iran is ready to supply free crude oil and other energy resources to Jordan for 30 years in exchange for some products which are in demand in Iran, as well as for expansion of religious tourism in Jordan.

Moslehzadeh has reportedly made the remarks during a televised interview with a local TV station. Later, the Iranian ambassador said that Jordanian media has misquoted him.

During his interview, Moslehzadeh said that Iran is seeking to strengthen relations with Jordan in the fields of economy, energy and diplomacy and will consider exporting oil to Jordan in exchange for some items.

Earlier Moslehzadeh had told reporters that Iran is interested in exporting gas to Jordan and to this end Tehran will soon send a formal proposal to the country.

In turn, previously the official representative of the Jordan Energy Ministry Mahmoud Al-Ees told Trend that Jordan is seeking to diversify its gas sources and is therefore interested in the purchase of Iranian gas.

"The Jordanian side has not yet received an official offer from Iran for gas supply to the country, but if the proposal is made, Jordan will consider this option," Al-Ees said.
The two "moderate" Arab states that made peace with Israel are both suffering gas shortages that threaten their economies.

Israel, of course, is sitting on hundreds of billions of cubic feet of natural gas in the Mediterranean.

While the fields are not yet operational, Israel could be providing gas to its neighbors.

Yet, as I discovered recently, Israel did offer to provide gas for Jordan - and it was considered politically unfeasible for Jordan to have a gas pipeline from Israel.

Egypt would be at least as bad.

And Iran is waiting in the wings, ready to rescue their Muslim brothers both from fuel shortages and from the ignominy of buying fuel from Jews (all while easing their own isolation.)

The energy story is going to be the real driver behind Middle East politics for the coming decades. Israel has to play it smart, and if it does, natural gas can do more for peace than any politician could ever hope to do.