Calev’s newsroom: Energy cooperation between UAE and Israel

There’s an old joke that Israelis used to like to tell, that if Moses had only turned right (south) instead of let (north) when he led the Israelites out of Egypt, we would have ended up with oil instead of oranges.

That quip became outdated in 2009 when Israel discovered the Tamar natural gas field off its Mediterranean coast, and the even larger Leviathan discovery a year later. With a combined estimated 690 billion cubic metres of gas, Israel has more than enough fuel to be self-sufficient for decades, and begin exporting to regional neighbours Egypt, Jordan and the Palestinian Authority.

Thus when Israel signed the Abraham Accords with the UAE and Bahrain, importing fuel from the Gulf for itself was not part of the economic equation. But Israel’s strategic location, with one coastline facing the eastern Mediterranean and its southern the port of Eilat sitting atop the Red Sea’s Gulf of Aqaba, makes it potentially a hugely valuable transit point to ship Gulf energy exports to Europe and beyond.

In the days following the accords, a consortium of Israeli and Emirati companies signed a deal to ship Gulf crude to Eilat and make use of the existing pipeline owned by the Europe Asia Pipeline (EPAC) that connects it to the Mediterranean port of Ashkelon. EPAC was reportedly even discussing with officials the future possibility of constructing a pipeline that would move fuel directly from the Gulf to Israel, via Saudi Arabia and Jordan.

These ambitious projects soon faced opposition. For Israeli officials, the proposals raised environmental concerns, including pollution in Eilat’s waters and fears of disasters such as the 2014 oil spill from the Eilat-Ashkelon pipeline that caused serious ecological damage in the
Negev desert. Israel’s current Energy Minister Karen Alharrer came into office vowing to halt new development of fossil fuel projects, and last year she announced her fi rm opposition to the EPAC proposal, essentially ending it.

It may well be that the real future of energy cooperation between Israel and the UAE lies not with fossil fuels, but cleaner alternative sources of fuel. Both nations are leading innovators of the latter, especially initiatives that make use of their copious, year-long sunny weather. For example, last year, Israel and Jordan signed a landmark solar energy and water deal brokered by the UAE. It involves Israel purchasing power from a massive solar field built in Jordan by an Emirati company, in exchange for water produced by an Israeli desalination plant.

Elharrar, signing the deal at the Expo 2020 Dubai, hailed it as exactly the kind of regional cooperation she would like to see emerge from the Abraham Accords.

But plans to write off new development in fossil fuels have been upended by the Ukrainian crisis, and the resulting cut-off of Russian oil and gas exports to Europe. Looking to make up for the loss of Russian fuel, Europe has turned to the East Mediterranean, including Israel. To help meet this demand, Elharrar in May abruptly reversed her previous opposition to new offshore energy development, and instructed her ministry to prepare for the launch of a fresh round of bids for natural gas exploration licences in Israel’s Exclusive Economic Zone.

On June 15, Elharrar joined with European Commission President Ursula von der Leyen and Egyptian energy officials in Cairo, to sign a landmark agreement that will see Israel send its natural gas to Egypt via the Sinai pipeline (that a decade ago brought Egyptian gas to Israel), where it will be liquefied in two under-utilised LNG plants and then shipped to Europe.

In talks with Israeli officials, Von der Leyen also spoke encouragingly of a project long thought economically and politically problematic, the construction of a pipeline extending from Israel’s waters to the European mainland, allowing it and other stakeholders in the East Mediterranean gas fields, including Egypt, Cyprus, Greece, Turkey and potentially even Lebanon – to ship fuel directly to Europe.

But even the highest estimates of gas reserves in the East Mediterranean fall far short of compensating for Russian exports to Europe. To make up for the shortfall, Europe will likely have to turn to the Gulf – and one has to wonder if the prospect of creating a direct supply route
between them, will create the impetus to revive the prospect of using Israel as a key transit point, via existing pipelines or even the creation of a new one.

The Ukraine crisis has provided the world, especially Europe, with a rude awakening that while it hopes to meet the Energy Roadmap 2050 goal of net-zero carbon emissions, that still leaves some three decades in which fossil fuels remain essential. And meeting that need may end up
requiring that the vision of a Gulf-Israel pipeline proves more than just a pipe dream.

Calev Ben-David, anchor of the nightly news programme, The Rundown, on i24NEWS