Israel hopes keeping cool can save ties with volatile Egypt (TIMES OF ISRAEL) By RAPHAEL AHREN 04/24/12)
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Severing of agreement to supply gas isn’t political, it’s commercial,
Israel’s leaders chorused. But they know better
Even as tensions between Israel and Egypt continue flaring up,
Jerusalem has adopted a keep cool and wait for better times strategy
in the hopes of keeping the peace with its neighbor. With the supply
of gas from Egypt unreliable long before it was canceled altogether
this week, and with the outcome of Egypt’s democratization process
unclear, Jerusalem has evidently decided that the best policy is to
sit quietly and hope for the storms to pass.
The strategy was much in evidence this week when the bitter initial
Israeli response to the cancellation of Egypt’s deal to supply
natural gas — Finance Minister Yuval Steinitz called the move “very
worrying,” and a dangerous precedent that cast a shadow over
bilateral ties — rapidly gave way to milder comments. Leaders from
both countries rushed to assert that the move was the result of a
commercial dispute and had no deeper implication for the peace treaty
the two nations signed 33 years ago.
“We don’t see this cutoff of the gas as something that is born out of
political developments. It’s actually a business dispute between the
Israeli company and the Egyptian company,” Prime Minister Benjamin
Netanyahu stated reassuringly.
Officials in Cairo, including the head of the state-owned Egyptian
Natural Gas Holding Company, Mohamed Shoeb, also said the cutoff was
the result of alleged breaching of agreements on the part of the
Israeli company managing the gas transfer. Egypt’s Minister of
International Cooperation, Fayza Abul Naga, on Monday agreed in
principle to renew the gas deal with Israel, albeit “with new
conditions and new prices.”
The apparent exception to the “sit quiet” strategy, not atypically,
has been the blunt-speaking Foreign Minister Avigdor Lieberman, who
earlier this week provoked the ire of many Egyptians when he
reportedly suggested their country was a greater threat to Israel
than Iran. Prominently reported in the Egyptian media, and not denied
by his office, the remarks drew a bitter response from Egypt’s
interim leader, Field Marshal Muhammad Hussein Tantawi in Cairo.
Chastened, perhaps, Lieberman toed the line on the gas deal, giving
two radio interviews to insist that the gas rupture shouldn’t be
portrayed as political.
Such finessing apart, however, there can be no doubt that the treaty
signed by Anwar Sadat and Menachem Begin in 1979 is under concerted
attack in Egypt. And whether the gas cutoff was motivated by money or
politics is not exactly the point. Potential Egyptian presidents know
that bashing Israel is a sure-fire vote-winner, and the interim
military leadership knows how profound the anti-Israel bitterness has
become in the street.
In a different phase of relations, Israeli officials acknowledge
privately, the Egyptian government simply would not have allowed a
dispute over payment to sever the gas deal. In a different phase of
relations, they add dryly, Egypt’s government would have been able to
prevent the incessant sabotaging of the supply pipeline — blown up
more than a dozen times in the past year.
In Egypt, things are changing fast
“I think it’s both political and commercial,” Magdy Nasrallah, a
professor in the department of petroleum and energy at the American
University in Cairo, told The National newspaper regarding the
canceled deal. “Everybody has to realize that things in Egypt are
changing very fast. We have serious economic problems and we’re not
going to keep subsidizing Israel’s gas needs.”
On Tuesday, German Foreign Minister Guido Westerwelle got involved,
saying the cutoff must not endanger the peace between the two
nations. “I expect from the current and future leaders of Egypt a
clear commitment to peace inside and outside its borders. Part of
this is also the historic peace treaty with Israel.”
It is no secret that the peace agreement — which stipulates that
bilateral relations would include “normal commercial sales of oil by
Egypt to Israel” — was never popular on the Egyptian street. But
after president Hosni Mubarak fell in early 2011, the people became
more vocal about their displeasure over their government’s business
dealings with the Zionists, turning it into an issue with which
aspiring politicians can score points without much effort.
Several prominent Egyptian leaders have expressed their delight over
this week’s suspension of the deal, among them presidential hopefuls
Abdel Moneim Aboul Fotouh and Hamdeen Sabahi. “The Egyptian people do
not want to export gas to Israel and the president must act according
to their wishes,” Fotouh said.
Tantawi’s sharpened rhetoric underlines the point. Just recently he
reiterated “the importance of the peace agreement and cooperation to
both countries,” but on Monday, responding to Lieberman, he sounded
very different. “Our borders are constantly burning, but we do not
attack any neighboring country but only protect our borders,” Tantawi
said during a live ammunition maneuver in the Sinai. “If anyone comes
close to Egypt’s border, we will break their leg. Therefore, our
forces must be in a perpetual state of alert.”
Obviously, Israel is registering all of this. But, for now at least,
it apparently intends to do very little about it..
“The prime minister is concerned about keeping the peace and is
mindful of acting responsibly,” a government official said,
indicating that Israel can do very little but wait for the bad
weather to pass.
Diplomatic Israeli sources said they were being careful not to
escalate the crisis and therefore decided not to respond in kind to
Tantawi’s belligerent statement. Jerusalem is “just trying to contain
the crisis” and is waiting for the formation of an elected
government “in order to establish a working dialogue,” one official
told The Times of Israel.
Israeli sources also said they were continuing to talk with Cairo
about economic cooperation, especially in the framework of the
Qualifying Industrial Zone, or QIZ. Signed by Israel and Egypt under
American auspices in 2004, the QIZ grants Egypt duty-free access to
US markets for products that contain at least 12% Israeli components.
Observers said the QIZ agreement meant only few political and
economic gains for Israel, despite a slight boost in exports. It
mainly helped “remove the Arab ‘taboo’ against conducting business
openly with Israeli firms,” according to political scientist and
financial analyst Vikash Yadav.
Plenty of gas?
Never mind the reasons for Egypt’s gas-supply decision and what it
signals for the future of bilateral relations — at least Israelis
need not worry about running out of power, energy analysts say.
They basically agree with Netanyahu, who declared himself “quite
confident” about covering the country’s energy needs for the future.
The country has “the reserves of gas to make Israel totally energy
independent, not only from Egypt but from any other source, and to
have Israel become one of the world’s large exporters of natural
gas,” the prime minister said Monday.
Since the Arab Spring started, the frequent attacks on the gas
pipeline have cost Israel NIS 15 billion, and yet “we don’t think
that the damage to Israel is particularly visible,” financial giant
Citi Capital Markets said, according to Globes.
Economics professor Eytan Sheshinski, who chaired a committee that
determined the government’s policy regarding the recent natural gas
findings off Israel’s coast, agrees. “De facto, the situation is not
going to change very much. The Egyptians have not supplied the amount
they have been contracted to, and the Israel Electric Company and
other clients of the Egyptian national gas company have all factored
in that Egyptian gas won’t be flowing,” he told The Times of Israel
If everything goes according to plan, Israel will be able to cover
its energy needs quite soon after the Tamar field – which contains
250 billion cubic meter of natural gas — starts producing, according
to several experts.
“If Tamar starts producing in 2013, as they have announced just now
again, then this is not going to be a serious issue,” Sheshinski
said, adding that Israel’s energy needs will be covered for the next
20 to 25 years. Israelis might face “some disruptions” of electricity
during the coming summer, he added, but several other factors have
contributed to that, such as the insufficient capacity of power
In case of a dire shortage, Israel has several alternatives to make
sure its citizens don’t run out of power, he said. The state could
use coal or oil to generate electricity, options that are more costly
and are not environment-friendly. There are also smaller natural gas
deposits whose development hitherto has not been regarded as
worthwhile. In light of the current situation, that might be
reconsidered, he said.
Whether Israel’s fraught relationship with its first, precious peace
partner can be so smoothly finessed is an entirely different
question. For now, the Israeli government position seems to be to
hope that it can, notwithstanding the accumulating evidence to the
contrary. The trouble is, in contrast to gas supplies, that if the
entire Egyptian-Israeli relationship is running out of power, there
aren’t too many alternatives. (© 2012 THE TIMES OF ISRAEL 04/24/12)
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