Egypt cuts off gas supply to Israel

Monday, April 23, 2012 |  Ryan Jones

Egypt on Sunday unilaterally decided to terminate its supply of natural gas to Israel, despite having signed a long-term agreement, and in possibly violation of the peace treaty between the two nations.

Egyptian authorities called the move purely "commercial," claiming that Israel had failed to pay its bills. Israeli authorities countered that during 2011 Egypt had supplied only 25 percent of the contracted natural gas due to its inability or unwillingness to protect the gas pipeline from repeated sabotage.

The pipeline, which runs through the Sinai Peninsula, has been blown up 14 times over the past year, resulting in disruptions in gas supplies to Israelis and rising domestic gas rates.

Israeli Prime Minister Benjamin Netanyahu and Foreign Minister Avigdor Lieberman tried to prevent a diplomatic crisis by backing up the Egyptian assertion that the halted gas flow was not political in nature, and stating that the issue was now in arbitration.

Still, the timing was highly suspect, and many Israelis leaders were not buying the official line.

This new Egyptian provocation is "very worrying," said Israeli Finance Minister Yuval Steinitz, while opposition leader Shaul Mofaz labeled it "a flagrant breach of the 1979 peace treaty." Mofaz said that as the guarantor of the Camp David Accords, the US should get involved in the new dispute over the gas supply.

The Camp David Accords obligate Egypt to allow Israel to bid on its surplus oil and natural gas resources. The 2005 natural gas deal penned between the two nations was seen as part of that understanding.

Knesset Member and former defense minister Binyamin Ben-Eliezer played a leading role in the Israel-Egypt gas deal. He told Army Radio that the unilateral and hostile nature of the Egyptian move is "very serious. The existence of the pipeline supported the peace treaty."

Many fear that is precisely why Egypt's new rulers cancelled the gas deal. In fact, Egyptian presidential hopeful Abdel Moneim Aboul Fotouh bolstered that assessment on Sunday when he reacted to the cancelled gas deal by stating, "The Egyptian people do not want to export gas to Israel and the president must act according to their wishes."

Israeli Energy Minister Uzi Landau also disputed the notion that the halted gas supply had no political connotations. "At the end of the day it is not just a commercial deal between companies, it is an important deal between two countries,” Landau told Army Radio. “Something like this can’t happen without the knowledge of the Egyptian authorities."

Landau said he was not surprised by the Egyptian move, and that his ministry had already been preparing for the day that Egyptian gas would stop flowing to Israel. "Israel is working to establish its energy independence and rapidly develop Israeli supply sources," Landau said.

In related news, the Israeli and international developers of the Tamar natural gas field off Israel's Mediterranean coast announced on Sunday that they had secured $900 million in funding. With the financial backing they need, company officials estimated that the Tamar field will go operational by the middle of next year and become Israel's primary source of natural gas.

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