Thursday, December 17, 2015

The East Mediterranean Nat Gas Realities

Let it be known that it will be easier to find water on the Moon than to find a grain of truth in Israel. With this caveat in place, let us discuss what is known about the natural gas situation in the Eastern Mediterranean region.

It was revealed a few years ago that gas was discovered in an area where the economic zones of Turkey, Syria, Lebanon, Cyprus, Palestine and Israel converge. Even though the proven reserves that Israel may legitimately claim did not exceed the 4.5 trillion cubic feet, Israel's officials jumped the gun and declared it was 18 trillion – a figure that would include the possibility of the “proven” reserves quadrupling … something that happens at times under the most favorable of circumstances.

The truth, however, is that the circumstances in that region are the worst they can be for Cyprus and for Israel. This is the case because of the obvious political reasons– which are that nobody gets along with their neighbors – and because Cyprus and Israel are small territories extended by limited territorial waters and equally limited economic zones. Thus, the probability that gas reserves will quadruple with new gas being discovered in their zones is infinitely small.

Upon learning these realities, Cyprus did the right thing and scaled down its expectation on how much gas it will rely on. As to Israel, it stuck to its guns and kept peddling the old figure of 18 trillion. What happened subsequently was that 30 trillion cubic feet of gas were discovered in Egypt's zone. And that's when the Israelis did the very Jewish thing of inflating their figure to 22 trillion cubic feet. Later, they inflated once more to 25 trillion. Give it a little more time, and they'll be talking about a hundred trillion cubic feet … and more.

Before the Egyptian discovery, the talks were not going well between the international companies and Cyprus; between the companies and Israel. The reason is that the gas is in deep waters, and the infrastructure that will be necessary to get it out will cost between 8 and 15 billion dollars for each location – depending on may factors; a reality that's not unusual for projects of this kind. Thus, for these companies to start working on the infrastructures, Cyprus and Israel will have to accept practically zero return in royalties, yet pay international prices for buying the gas that's coming out their own territorial waters.

Because Egypt's discovery is huge, and because the infrastructure is already there, the gas will come out of its zone in record time and will be profitable to all the participants. Realizing that cooperating with Egypt can be its salvation, Cyprus went to Egypt and asked to have its discovery developed together with that of Egypt. Greece came along too, and will act as a gateway to Europe for the Egypt/Cyprus natural gas.

You would think that the Israelis had the IQ of at least a bird, and realized that Egypt was their salvation too, thus followed in the footsteps of Cyprus and sought Egypt's goodwill. But no; they didn't have this level of an IQ. What they did instead, was to go to a self-declared obscure tribunal with a post office box in Geneva and another one in Paris, where they lodged a complaint against Egypt asking for – what else – compensation.

This story is told in an article that came under the title: “Dispute With Egypt Threatens Israeli Gas Plan” and the subtitle: “Egypt halts plans to import Israeli gas after arbiter rules it owes $1.76 billion to state-owned Israel Electric Corp.” It was written by Roy Jones and Summer Said, and published on December 16, 2015 in the Wall Street Journal.

The Egyptians are by nature an easy going people and do not have the necessary meanness to deal with situations like these – as they should. And so, we can only hope that the Jews will push them so hard as to awaken the lion in them, forcing them to go all out and teach those parasitic cockroaches a lesson they will never forget.

The way that thing should turn out is this: We assume, for the sake of this discussion that Egypt fulfilled only half the contract and reneged on the other half. Israel says it bought fuel at a higher price, paying an extra $1.76 billion dollars for it, and wants to be compensated. Thus, the counter argument Egypt must use is that it was underpaid by that amount for the gas it sent to Israel. And it is Egypt that needs to be compensated, not the other way around.

And there remains a lingering question: How did Israel get a deal like that?

It happened because there was corruption both in Egypt and in Israel under a previous regime. The new government caught the culprits in Egypt, tried them and threw them in jail; and the same must happen in Israel. Therefore, Egypt must notify Interpol and the ICC to see to it that justice is done, and return to Egypt the amounts that the Jews shortchanged it during all those years.