Experts say Israel’s aim in connecting its natural gas reserves to the EU is more about gaining political leverage than economic benefits
Israel has inked an agreement with Greece, Italy and Cyprus to lay an underwater pipeline that would provide a conduit for Eastern Mediterranean gas to reach the European Union market. While Jerusalem stands to gain economically from the project, experts believe it will also garner political leverage over Brussels.
The initiative, which is expected to cost over $7 billion, comes as Europe is seeking to diversify its energy needs beyond its largest suppliers: namely Russia, Gulf states and Iran.
While the EU reportedly invested $100 million to determine the feasibility of the venture, the sides believe that work on the pipeline will begin in a few months’ time and take five years to complete.
Beginning about 100 miles off Cyprus’ southern coast, the estimated 1,350-mile-long channel will transport 706 billion cubic feet of gas per year to Otranto, Italy, via Crete and the Greek mainland, making it the longest and deepest underwater pipeline in the world.
“For Israel, it’s important beyond the financial aspect because the supply of energy equals political power,” Dr. Eyal Winter, a Professor of Economics at Jerusalem’s Hebrew University, conveyed to The Media Line.
“The connection between these countries [Israel, Greece, Italy and Cyprus] could cement an alliance, but more importantly, it will increase the political power of each of them vis-à-vis the EU. Greece needs this tremendously because of its debt, and the EU has asked Italy to change its fiscal policy in accordance with Brussels’ regulations. Cyprus is also not in the best shape when it comes to its national debt.
“Israel, which is not bound to the fiscal policies of the EU, gains more leverage for its political agenda vis-à-vis the Palestinians, Syria, and other Arab countries.”
Oded Eran, an expert on Israel’s energy resources at the Institute for National Security Studies in Tel Aviv, explained to The Media Line that Turkey and Egypt previously supplied gas to the EU but are today considered unstable sources, while Israel is viewed as a reliable partner.
But, he warned, “this pipeline is a very difficult project technically, and it is the least desirable from a financial perspective. I wonder if this pipeline venture will ever emerge as a practical solution to exporting gas to the continent.
“But if other gas producers in the Eastern Mediterranean such as Lebanon and Egypt would be willing to participate in the same pipeline, that would become a very important geo-strategic and economic venture.”
Commenting on the agreement, Israel’s Energy Minister Yuval Steinitz said the pipeline would mitigate Europe’s dependency on Arab states.
“For decades, we have complained about the Arab influence in Europe due to oil and gas. The export of gas to Europe will moderate this influence to a certain extent and be a counterweight to Arab power,” he said.
The energy deal comes as Greece and Cyprus have increased their military cooperation with the Jewish state. The countries often hold joint training sessions in a bid to deter threats to their strategic interests in the Mediterranean.