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Dr. Josef Olmert Headshot

A Possible Strategic Change: Israel Becomes Energy Independent

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In the early days of Israel, the search for energy sources was of paramount importance. It was so because Israel was under siege by all its neighbors, and the very supply of oil was constantly threatened, let alone that the Arab boycott of the new state was designed to deter potential suppliers from selling to Israel. That sense of vulnerability in a state under constant military threats was compounded by the fact that many Israelis believed, for good reason, that a lot of the hostility towards their state was driven by the influence of the oil companies in the West being totally subservient to Arab pressures. So, one day in the early 1950s when some oil was discovered in Heletz, in Southern Israel, it was a cause for national celebration, but alas, so little was there that the country's dependence on external suppliers continued to be considered a strategic threat of the first order to national security.

Two days ago, there was a day of joy in the country as natural gas from the Tamar site started flowing to the storage depot in Ashdod. This discovery alone can provide Israel's energy needs for 30 years, and other proven discoveries, which are still in the stage of development, will turn Israel very soon into a major exporter of natural gas. Altogether, the recent discoveries are among the largest in the world in the last decade. Clearly another miracle in the Holy Land, coming as it were in the immediate aftermath of an official announcement from the state's water authority confirming that the long water crisis in the country is over, as the desalination installations finally are in full operation, and the traditionally drought-prone country does not depend anymore on rain to get its water. For many Israelis, this amounted to a collective sigh of relief.

Certain developments taking place recently indicate that Israel's newly established status as an energy producing state is paying handsome political dividends. To start with, one of the least publicized explanations for the Israeli-Turkish rapprochement, being made possible by the Netanyahu apology, is the Turks' desire to invest in a joint project with Israel to ship the gas to Europe. Also, their concern about the vastly improving Israeli-Cypriot-Greek relations triggered, among other reasons, by plans to have joint projects to develop gas discoveries found between Cyprus and Israel. Another country, Russia, is showing much interest in the new discoveries, and all in all, being a producer and exporter of energy puts Israel firmly on the radar of world trade, in a way never anticipated before. All this put to rest the attempts to boycott Israel and Israeli goods, which seem now so unrelated to reality. A reflection of hatred, but nothing to do with the way international relations are conducted.

Then there are potential implications concerning the Middle East situation. It is here where the picture is not so encouraging, while having the potential to turn around and be an incentive and catalyst for positive developments. Until recently, one of the very few examples of Egyptian-Israeli economic cooperation was the gas deal between the two countries, according to which the former supplied Israel with natural gas. One of the immediate victims of the collapse of the Mubarak regime was the deterioration of security conditions in the Sinai Desert, and the repeated bombings of the pipeline by Islamic terror groups. Then, the new Muslim Brotherhood government cancelled unilaterally the agreement, causing temporary hardships in Israel, such as a sharp rise of the price of electricity.

The Israelis were naturally upset, but time was on their side, and now in a twist of events, Egypt is in a chaotic situation, and among other things, there is a shortage of supply of natural gas... Can the Israelis be of help? Why not, if the rules of economy and conventional wisdom prevail? But in reality, this is not going to happen, and the hostility towards Israel is such that no "Zionist" gas will be allowed in Egypt, and many Egyptians will suffer for no real reason. This is just one example of how trade can be used to improve relations, or alternatively to sour them. Hopefully, the former option will be on top, though not immediately. If that is the case, Israel could provide the Palestinians and Jordan with cheap energy, as well as with water, always a source of conflict and recriminations. Water can also be used to help the post-Assad Syria, where already now the water and power shortages are acute, and are likely to intensify.

For that to happen, a disc has to change, and neighboring Arab countries should look at the potential positive repercussions of economic cooperation with Israel. Maybe also a change of disc is needed in Israel, where the new gas and water projects should bring a sense of growing confidence, leading possibly to more flexible attitudes towards political solutions with the Palestinians in the present, and Syria in the future. But then I am constantly reminded that asking for so much may be asking for far too much...