LEVIATHAN – THE GEO POLITICAL, ECONOMIC , AND STRATEGIC REALITIES

Since its establishment, Israel’s Achilles heel has been its reliance upon imports to meet its energy requirements. The situation radically changed in 2009 with the discovery of the Tamar off shore gas field within Israel’s maritime exclusive economic zone. This win fall was fortified by the discovery of the even bigger gas and oil reserve -Leviathan the following year. Not only have these reserves placed Israel in a position to become energy independent but they have also transformed it into a net exporter of gas. So far its principal client has been Jordan. Withstanding the objections of a majority of its Parliament the Hashemite Kingdom purchased ten billion dollars worth of gas last year. Indeed this new found abundance of natural resources has profound political, strategic and economic implications for Israeli relations with its neighbors. 

Leviathan has featured as a maritime border dispute between Israel and Lebanon. In particular, Hezbollah has trumpeted Lebanese sovereignty claims over part of these reserves. Israel has not been hesitant in repudiating such assertions. Several Cabinet ministers have affirmatively stated that Israel will take swift military action to counter any use of force against the infrastructure being installed. As a practical measure the Israeli Navy has purchased a number of additional corvettes to bolster its presence in the disputed waters. At present, it seems that Lebanon has neither the will nor ability to take matters further. The only plausible scenario for an eruption of conflict would be a situation in which Hezbollah acquires advanced anti ship missiles from Iran (as it has in the past) and launches them against Israeli Naval targets and rigs. 

A notable geo-political outcome of the gas fields has been the blossoming relationship between Israel, Greek Cyprus and Greece which until recently has been lukewarm at best. The precursor to this was the deterioration in ties between Israel and Turkey. Israel’s traditional military cooperation with Turkey precluded a closer alliance with Greece, as Greece and Turkey were historically mutually alienated even though they are both ostensibly NATO allies. However Erdogan’s rise to power altered this drastically. His Islamist party has acted with hostility towards Israel. He has adopted inflammatory rhetoric against Israel, reflecting some of the excesses of the Ayatollah’s in this regard. He views himself as the leader of the Islamic world, resurrecting notions that hail back to the days of the Ottoman Sultans. This has involved advocating for the Palestinians, particularly those in Gaza. Relations hit rock bottom following the Mavi Marmara incident when Israeli commandos boarded some of the vessels headed to break the blockade on Gaza that resulted in the deaths of eight Turkish citizens in the Summer of 2010. Consequentially joint military drills were called off and the Israeli Air force is no longer welcome to utilize Turkish Airspace for training. The Greek government has enthusiastically come to Israel’s assistance in filling this logistical gap. Indeed both military and economic ties have been strengthened with expanded trade particularly in the area of technological goods and services. In concert with these moves, Israel and Greek Cyprus have signed agreements to endeavor in joint future exploration of bordering regions of their respective gas fields.

Furthermore, ministers from Israel, Greece, Italy and Cyprus, as well as the European Union’s commissioner for climate action and energy, signed a joint declaration in 2017 to commit to building a gas pipeline that would bring natural gas from Israel and Cyprus to Italy and the European market via Greece. The pipeline, which Israeli Minister of Energy Yuval Steinitz described as “the longest and deepest subsea gas pipeline in the world”, is projected to be in operation by 2025.

Steinitz surmised the project as the “beginning of a wonderful friendship between four Mediterranean countries”, while Miguel Arias Canete, the EU commissioner for climate action and energy, commented: “We strongly support the development of the region, both from a general point of view and in particular as future gas suppliers.”

Although Canete could not make “formal commitments”, he expected the project to meet all the necessary requirements to receive funding via the EU’s Connecting Europe Facility, a program that supports the development of trans-European infrastructure, and which already funded the project’s commercial and technical viability study.

Defined as a “project of common interest” by the EU, the pipeline has been marketed as an alternative to the bloc’s current reliance on Russian energy and on the depleting North Sea reserves. But some analysts have expressed reservations that the high infrastructure costs, coupled with low gas prices, will be able to compete with Russian gas and that the project will be able to attract large amounts of investment capital. Brenda Shaffer, a senior fellow at the Atlantic Council Global Energy Centre, suggested that the agreement represents the four countries’ common political goals, which will not necessarily translate into investment decisions by commercial companies.”Their considerations and goals may be very different than the political level,” Shaffer told one publication. “At this stage, the proposed project is a political aspiration and far from a commercial reality, and it is not certain that current gas demand trends in southern Europe commercially justify an additional new gas supply project.”

However, It is important to note that Texas based Nobel Energy which owns almost 40% of Leviathan has access to advanced American technology such as sophisticated innovations in horizontal drilling which Russian state owned Gazprom lacks. This gives Israel a competitive edge in terms of extraction. Also, as of yet we are unsure of how large Leviathan is. So for now the jury is out on whether Israel will be able to compete with Russia as an alternative source of gas for the EU. What is certain, is that this new Greco-Israeli nexus has proved to be the conduit for improved EU-Israeli relations. This is cemented by the fact that unlike other Middle Eastern gas producing countries like Qatar, Israel has direct access to European sea ports.