Natural Gas Asia

Tuesday, March 28, 2017

Role of Natural Gas Assets in Middle East Conflict

The Arab Awakening and Iran's continued pursuit of a nuclear program dominated the conversation in the Middle East in 2011. But a longer view calls for greater attention to a seemingly obscure but potentially pivotal issue: the discovery of large natural gas deposits in the Eastern Mediterranean, known as the Leviathan  Basin. Shared economic interests should compel the nations of the Middle East and Europe to set aside their differences and quickly exploit Leviathan. But as tensions among the United States, Israel, and Iran increase and unrest in the region persists, this valuable resource could become a casualty – or even driver - of an international row, scuttling a key opportunity for European and global energy consumers.

When a US energy company discovered new areas of the Leviathan basin between Israel and Cyprus in mid-2011, regional players weighed in decisively. Turkey deployed a naval mission to explore deposits in the waters off Turkish Cyprus. A demonstration of Turkey's discomfort with a closer relationship between Israel and Cyprus, this alone nearly sparked a conflict between Israel and Turkey. Iran also weighed in, offering to help Lebanon explore its own waters and supporting Lebanon's claim that parts of the basin lay within its territory. The US quickly sided with Israel and Cyprus, creating the appearance of further Turkish alignment with Iran and a division between two diametrically opposed camps.

But this division was not as stark as it appeared, as several parties have conflicting interests in the dispute. For example, the growing din of adversarial dialogue with Iran, underscored by its recent possession of a US stealth reconnaissance aircraft, will almost certainly bring about closer ties among Turkey, the US, and Europe. The Turkish government's agreement to host NATO anti-missile radars and their calls for President Assad's resignation in Syria underscore Turkey's reciprocal interest in maintaining strong ties to the West. In addition, Turkey's cessation of military ties with Israel makes it more dependent on US assistance against Kurdish insurgents along its border with Iraq, as Israel had previously provided Turkey with key equipment for this fight.

Egypt, which until recently supplied around 40 percent of Israel's natural gas, is of course in the midst of dramatic political change, much of which Israel views with great trepidation. In fact, Egypt's provision of natural gas to Israel was one of many complaints against President Mubarak that contributed to his downfall in early 2011. Intermittent attacks on Egyptian pipelines indicate gas supplies to Israel will continue to be a source of contention in Egypt. The results of the first round of parliamentary elections do not bode well for Israel on this point.

An energy-independent Israel, for which Leviathan presents some prospect, would have less incentive to work with Egypt and other regional players on issues like the disposition of the Palestinian territories. Israel may also feel empowered to take more aggressive action against its adversaries - specifically Iran and Iranian proxies in Lebanon and Syria - when freed from its fears of losing access to energy supplies. Hezbollah, with its growing share of power in Lebanon, is unlikely to work to counter this trend, increasing the chances of another conflict between Lebanon and Israel. And while the outcome of the unrest in Syria remains unknown, the potential for civil war in the wake of regime change looms increasingly large.

A reduced overt US presence in the region, if not handled properly, will compound Israel's sense of insecurity and increase the chances of a dangerous miscalculation on its or Iran's part. Regardless of whether Iraq actually draws closer to Iran after the US withdrawal, it will almost certainly draw away from alliances that would complicate Prime Minister Maliki's rule, creating the impression of increased Iranian influence. The same could happen in Afghanistan, although Pakistan provides a strong counterbalance. As the US departs from Iraq and draws down in Afghanistan, the perpetuation of its intelligence infrastructure in particular will be critical to maintaining awareness and influence, and to reassuring allies that while the troops may be gone, the US is not reverting to a 1990s-style isolationism.

Russia could view the development of Leviathan as a geopolitical threat, but more likely it will treat it as an opportunity to protect and enhance its ability to supply gas to Europe. The basin offers a potential Southern alternative to the Northern gas pipelines from Russia, but unlike the planned Nabucco pipeline, its development is unlikely to be free of Russian interests. While Russian involvement could limit the extent to which Europe is eager to rely on Leviathan-sourced gas supplies, prices will be the more significant factor as the European economies continues to falter.

The discovery of the Leviathan basin has already altered the regional balance of power in the Middle East and Europe, dividing Turkey and Israel and stoking tensions with Iran. And while mutual economic interests typically beget cooperation, the prospect of conflict remains in a time of great political uncertainty. Therefore, both caution and active mediation are required. The economies of Europe, not to mention the Middle East and beyond, cannot afford to let miscalculation or aggression slow the development of critical resources.

Mr. Devine is a former CIA deputy director of operations and president of the Arkin Group, a private sector intelligence company based in New York.Ms. Kassel is a director at the Arkin Group and a former counterterrorism analyst at the Department of Defense.

Source: AOL Energy

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