Egypt Shuts off Israel Gas

February 9, 2011 by  

Back in December I wrote “Egyptian Gas Deals Threaten Tamar Exploration” and a reader asked (I paraphrase), “What does Egypt have to do with oil and gas in Israel?”

As we’ve watched a revolution in Egypt unfold from our TV screens in the last two weeks, we now know the answer to our reader’s question … plenty!

Egypt Pipeline Explosion

Al Jazeera reported on Saturday. “Egypt gas pipeline attacked“. Israel gets about 40% of its natural gas from Egypt, from the Egypt gas pipeline. Fortunately, the terrorists blew up the side that supplies gas to Jordan rather than Israel. Unfortunately, Egypt shut down the gas pipeline to Jordan and Israel until they could quell the terrorist activity … which may be awhile. That means 40% of Israel’s natural gas requirement isn’t getting to Israel right now. According to a UPI report out today, that’s costing Israel $1.5 million per day in ‘alternate’ energy sources.

Al Jazeera reminded readers: “Israel is realising that their good friend (Mubarak) is on his way out, and they are not sure who is on the way in.”

Forbes’ Chris Barth asked the question in his Monday blog: “Will Egypt Protests Boost Israel’s Budding Energy Market?” Barth says:

“As protests in Egypt continue, investors are pondering the future of Israel’s energy supply, with one eye on Cairo and the other on Israeli energy companies. Although Israel has been quickly moving toward a more diverse energy structure, however, it still relies on Egypt for a full quarter of its energy needs, mainly natural gas delivered via the Arish-Ashkelon section of the Arab Gas Pipeline. Indeed, existing contracts with Egypt seem to prevent any large-scale shakeups in Israel’s energy imports, even in the face of recent domestic natural gas discoveries. Despite what has been a nerve-wracking month for energy-minded Israeli investors wary of instability, the state’s reliance on Egyptian gas doesn’t look to be going away any time soon.”

Protests in Cairo's Tahrir Square

Israel’s gas supply from Egypt has been cut off by the unrest and terrorist bombings in Egypt. It’s long term gas supply from Egypt is jeopardy, depending on whatever form of government comes up on top after the revolution. No more gas from Egypt – that’s bad news for Israel, right?

Maybe not. In the short run it certainly hurts now; but in the long run, Israel, I believe,  will be much better off.

Remember what I said in December’s article? “Egyptian gas deals threaten Tamar exploration.” The sweetheart gas deal Israel has had with Egypt for the last thirty years as a stipulation of the Camp David Peace Treaty (40% of Israel’s natural gas imports) means that actually producing the gas discovered inside Israel’s territory has been slowed or even threatened because Israel prefers cheap Egyptian gas to paying the price of getting Israeli gas to market. Why build Israeli infrastructure when we can get Egyptian gas for a few shekels less?

I’ll tell you why – sometimes ‘cheap’ isn’t so cheap. The Egyptian sweetheart gas deal won’t last forever – as far as we know, we could be witnessing its death on Cairo’s Tahrir Square right now. With not-so-friendly neighbors surrounding her and political turmoil rebooting the Israel ‘friendly’ Egyptian government, it’s a pretty good bet that the foreseeable future of  ‘cheap’ Egyptian gas for Israel may be ticking down.

For Israel, energy isn’t just an economic issue it’s a national security issue. If Israel has a domestic energy source available she’d better start developing the infrastructure to bring it to market. Relying on the neighbors for natural gas doesn’t seem like such a good long term strategy anymore … even if it’s cheap.


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Comments

4 Responses to “Egypt Shuts off Israel Gas”

  1. kumar soysa on February 10th, 2011 9:40 am

    It will be good for “Al Jazeera” to know that Israel’s Friend is the Keeper of Israel, the Captain of the armies of Israel, the God of Israel, the Holy One of Israel. The Mighty Lion of the tribe of Judah. He is the One who never stepped out!! He will hold Al Jazeera and all Israel’s enemies in derission. And accountable.

  2. S. Paquette on February 10th, 2011 2:49 pm

    The sooner Isreal can be self-sufficient the better.

  3. Susan on February 10th, 2011 5:03 pm

    I hate what is happening and that the Muslim Brotherhood are like sharks just waiting for the opportunity to strike. Israel is as always in this Christian woman’s prayer.

  4. Bernard Nadel on January 11th, 2012 11:11 am

    All this fuss about fossil fuel, Israel accused of plundering Lebonese oil and gas; we could walk away from all this bickering by switching to hydrogen and Israel’s non friends could then drink their oil or inhale their gas.

    Hydrogen, the most plentiful element in the universe has more latent energy than does gasoline or natural gas and is safer since it does not burn and burn should an explosion take place. It could be used just about anywhere where fossil fuels are now being used. Just for one example, if we would replace those silly lithium ion batteries in electric cars, which would take you a few paltry miles after which several hours would be required to recharge. Replace with hydrogen cells, expect to go hundreds of miles between recharges and recharge in a few minutes. What comes out of one’s tailpipe is harmless water vapor.

    We can now produce hydrogen cheaply, in enormous quantities by converting the energy and substance of sea waves into DC current and hence into hydrogen with a kiss of oxygen for the atmosphere as the only other emission..

    Rick Farmer, at the department of energy is aware of a device that does the conversion, now in the prototype stage. I assume he would direct one to its source.

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