Event Reports

Energy in the EasternMed

by Michael Mertes

Transcending Geography, Time, and Money

On May 7th and 8th, the Harry S. Truman Research Institute for the Advancement of Peace at Hebrew University and KAS Israel co-organized an expert workshop on “Energy in the EasternMed: Transcending Geography, Time, and Money”. Its purpose was to investigate the implications of recent offshore energy discoveries in the Eastern Mediterranean – discoveries which are widely recognized as a game-changer, in both the global energy arena and in the geopolitics of the Middle East.

The workshop refined the results of the Truman/KAS Israel conference “A Bridge Under Troubled Water?”, which had taken place on November 27th and 28th, 2013. The Truman Institute and KAS Israel believe that the commercial exploitation of the new-found resources in the EasternMed is relevant to Egypt, the Palestinian Territories (Gaza), Israel, Cyprus, Lebanon, Syria and Turkey. It could have dramatic effects on the geopolitics of the region as well as economic and political ripple effects well beyond the EasternMed – in the European and Asian energy markets, and in the play of the world powers in the region.

Day 1

Panel 1: Beyond Conflict: Energy, the Arab-Israeli Conflict and the Arab Spring

Prof. Moshe Maoz (Truman Center, University of Michigan) opened the first panel with an analysis of the political developments in Tunisia, Egypt and Syria. Regarding Syria he focused on the more and more split opposition and its infiltration by Al-Quaida groups. He questioned the role of Turkey, whose “zero-problem policy” had failed. While its commitment to refugees had to be acknowledged, he criticised what he saw as its dormancy in the fight against Al-Quaida. As Turkey depended on energy supply from Iran, it was hesitant to get involved in Syria. Due to its relations with Hamas, Turkey could play an important role in helping solve the Israeli-Palestine conflict. Israel should continue negotiations with the Palestinians as this could facilitate normalization of its relations with the entire Arab world.

Dr. Michal Ya’ari commented on the deteriorating relationship between the United States of America and Saudi-Arabia. Ya’ari predicted changes in global energy markets as the U.S. seemed to be able to become energy-independent by 2020 after discovering hydraulic fracturing (a.k.a. fracking) as a realizable new method of oil and gas production. It was to be expected that the U.S. would reduce its energy imports and thus its dependence on Mexican as well as Middle Eastern, especially Saudi, oil. While the relationship between Saudi-Arabia and the U.S. had focused on energy and security issues in the past, security issues, including the fight against terrorism, might remain the only field of cooperation in the future.

Panel 2: Beyond the Eastern Med: The Global Context of EasternMed Energy (The EU, the Gulf, Central Asia, Asia-Pacific)

At the beginning the second Panel, Dr. Micha’el Tanchum (Shalem College) introduced the audience to possible trading routes between China and Europe that would bypass Russia, and gave an historical overview. Russia’s involvement in Ukraine had to been seen in the larger context of Russia’s geopolitics. If an overland route from Western China to Western Europe could be created, the Suez Canal would become less important.

Dr. Frans-Paul van der Putten (Clingendael – Netherlands Institute of International Relations) concentrated on emerging conflicts between China and Japan about their sovereign rights to explore and exploit offshore energy resources, instead of expediting joint exploitation. In the South China Sea, where the conflict between China and Vietnam is becoming increasingly heated, the potential for clashes caused by conflicting energy interests are particularly obvious.

Panel 3: Beyond Energy: The Geopolitical Frame of the Eastern Med (Israel, Cyprus, Greece and Turkey)

During the third panel, Prof. Andreas Stergiou (University of Crete) highlighted the immense costs and technical problems an Israel-Cyprus-Greece pipeline to export the recently discovered natural gas in the EasternMed would have to cope with. However, Israel was reluctant to build its own liquefaction plant due to environmental and security concerns. Therefore, it seemed a gas pipeline was still the most viable option.

An alternative route could transport gas from Israel via Cyprus to Turkey, which would, according to the next speaker Hasan Selim Ozertem (International Strategic Research Organisation), be the most secure way. In view of the increasing natural gas exploration in several regions all over the world, he predicted a competitive future for the international natural gas market, which would bring the gas prices down.

In closing this session, Prof. Kıvanç Ulusoy (Istanbul University) reflected on the importance of the Turkey-Cyprus relations for the negotiations between Israel and Turkey regarding the pipeline. Although energy policy was dominated by private interests after the liberalization of the Turkish gas market, a gas pipeline still had to be approved politically, as it represented a strategic project. Therefore a key question would be whether Turkey was serious about finding a comprehensive settlement of the Cyprus issue.

Panel 4 (Evening session open to the public): Turkey’s Upcoming Presidential Elections: The Start of a Post-Erdogan Era?

On August 10th, the first round of the presidential election will be held in Turkey. For the first time, it will be a direct election. After seven years, the incumbent Abdullah Gül cannot be nominated again. The incumbent Prime Minister of Turkey, Recep Tayyip Erdoğan, is very likely to become the presidential candidate of the AKP.

The panel, chaired by Prof. Moshe Maoz, discussed the implications of Erdoğan’s possible candidacy and victory. Amb. Dr. Alon Liel, former Israeli Ambassador to Turkey, described Erdoğan as a revolutionary who had managed to largely replace Kemalism by what he called “Erdoğanism”. Liel said he was sure that Erdoğan would triumph if he were to become the AKP’s presidential candidate in August. According to Liel, there will be no competitors of equivalent personal charisma and political weight. Most importantly, the majority of Turks believe that the “Erdoğan revolution” has to continue.

Liel estimated that only 20% of the Turkish electorate are (still) Kemalists, i.e., adherents of the old, pre-revolution philosophy. Should Erdoğan be elected president, he will have 10 months (until the next parliamentary election in 2015) to turn the Turkish political system into a presidential democracy based on the model of countries like the U.S., Russia, or France. Liel predicted that Erdoğan’s immediate successor as Turkey’s Prime Minister will be politically weak. This may change in 2015 after the parliamentary election, should the incumbent President Abdullah Gül become head of government.

Prof. Kıvanç Ulusoy advocated a more cautious view with regard to Erdoğan’s prospects as the AKP’s presidential candidate. He pointed to the fact that the 10% electoral threshold had distorted the parliamentary election results in 2002 and, to a lesser degree, in 2007 by giving AKP a bigger majority in Parliament than fully proportional representation would have effectuated. According to Ulusoy, Erdoğan’s and his AKP’s success has been largely due to an un-ideological, pragmatic agenda of modernizing Turkey – something the Kemalists had failed to achieve at the dusk of their decades in power. In the beginning of his tenure as Turkey’s Prime Minister, Erdoğan had to base his power on society rather that the state. After thoroughly “de-kemalizing” the state, he was now basing his power on the state, Ulusoy said. In that sense, one might say that Erdoğan had adapted elements of Kemalism by blending Islamism and nationalism.

Day 2

Panel 5: Beyond the Present: Renewable Energy, Future Generations, Visions of Economic Peace

Prof. Eytan Sheshinski (Hebrew University of Jerusalem) opened the session by describing the discoveries of natural gas fields in the Eastern Mediterranean, their localisation and the possibility of discovering offshore oil in the future. He explained that all known gas fields relevant to Israel were located within the so-called Exclusive Economic Zone (EEZ), which meant, according to maritime law, that Israel had the sovereign right to explore and exploit these ressources. Even the dispute with Lebanon regarding the “Leviathan” gas field had become obsolete since the UN determined that “Leviathan” was located within Israel’s EEZ.

The gas could be exported either in the form of natural gas by pipeline, or in the form of liquefied natural gas by ship – the latter option allowing easier transportation, especially to Europe and Far East countries. However, liquefaction plants were expensive to realize and needed foreign investors. These, in turn, asked for stable political and economic conditions, not least in terms of taxation. Prof. Sheshinski indicated the possibility of building a pipeline to Jordan. After a major debate in Israel on the amount of gas that could be exported, it was decided to allow 40 % for exportation and 60 % for domestic use. He also explained that after the downfall of Mubarak in Egypt and several attacks on the Sinai pipeline to Israel, Egypt was going to produce much less gas than Israel, thus turning from an exporter into an importer.

Dr. Lior Hermann (Hebrew University) analyzed visions of economic peace. He mentioned several factors that determine the degree of energy dependency of a country, such as availability of resources and of infrastructure (pipelines, floating energy facilities e.g.). Though these factors could be used as a political weapon, they could also bring countries closer to one another. Environmental circumstances could result in more regional energy cooperation and better regional relations. The more the energy sector was government-owned, the more it would be used as a political instrument.

Dr. Itay Fishhendler (Hebrew University) concluded this session with reflections on renewable energy and geopolitics from an Israeli perspective in giving a brief overview about the development of use of renewable energy, beginning from the early 1980s. Solar farms, which can be made of photo voltaic or the more expensive thermo solar, which makes storage of energy possible for at least a short time, are the major clean energy resource in Israel today. Fishhendler pointed out that energy in Israel would be 15 % cheaper without renewable energy, which was expensive because of the feed-in tariffs.

It could be seen how a rush towards solar farms in the Negev during the past few years had taken place, although there was not enough suitable land for solar farms in the Negev, as it was mainly used for military purposes, food production, and ecological needs. One of the main concerns expressed during the Knesset debate had been how renewable energy impacted army training capabilities. A key challenge consisted in reconciling different goals, such as advancing energy independency, creating a platform for regional cooperation with Egypt and Jordan, and safeguarding land.

Lea Grohmann / Adam Hoffman / Michael Mertes