Israel’s ultimate objective: Occupy Gaza energy resources

An expert on Middle East security and nuclear policy specialist at Princeton University says, the ultimate objective of the extremist regime of Benjamin Netanyahu is to expel Palestinians from their homeland Gaza and get control over multi-billion-dollar energy resources.

To realize this goal, Seyed Hossein Mousavian says, as the war continued with no ceasefire in sight, on October 29 Netanyahu’s government awarded 12 licences to six companies, including BP and Italy's ENI, for natural gas exploration off the Mediterranean Basin area.

Following is the text of the article published on November 15 on Middle East Eye: 

After October 07 Palestinian fighters' attack, which killed around 1,200 people and led to hundreds of hostages being taken to Gaza, Israel responded ferociously. 

It has dropped more than 18,000 tons of bombs on Gaza so far, killing more than 12,000 Palestinians - mostly women, children and elderly people - in more than a month of relentless air strikes.

A top UN official in New York recently resigned calling the events in Gaza a textbook case of genocide in which Western governments have been wholly complicit.

Israeli Prime Minister Benjamin Netanyahu has vowed that his country will not surrender until Hamas is eliminated.

As the horrific onslaught enters its seventh week, the issue of energy resources could add another layer of complexity to the ongoing war.

According to the United Nations Conference on Trade and Development (UNCTAD), significant reservoirs of oil and natural gas have been found off the Gaza Strip and elsewhere under the occupied West Bank. 

"The Occupied Palestinian Territory lies above sizeable reservoirs of oil and natural gas wealth, in Area C of the occupied West Bank and the Mediterranean coast off the Gaza Strip. However, occupation continues to prevent Palestinians from developing their energy fields so as to exploit and benefit from such assets," said the study conducted by UNCTAD in 2019.

In this context, the issue of sovereignty over Gaza’s gas fields is vital for Israel.

The Oslo II Accord signed in 1995 gave the Palestinian Authorities (PA) maritime jurisdiction over its waters up to 20 nautical miles from the coast, therefore, the PA signed a 25-year contract for gas exploration with the British Gas Group (BGG) in November 1999.

In 2000, two wells drilled by British Gas off the coast of Gaza revealed gas reserves estimated at 1.4 trillion cubic feet. Sixty percent of those reserves belong to Palestinians. 

In July 2000, the Israeli prime minister granted BGG security authorisation to drill the first well, Marine 1, as part of political recognition by Israel that the well was under PA jurisdiction. 

After Russia invaded Ukraine in February 2022, Europe tried to secure alternatives to Russian energy supplies, and revived a Palestinian initiative to extract natural gas off the coast of Gaza. It was hoped that the US$1.4 billion project - involving the Palestinian Authority, Egypt, Israel and Hamas - could launch gas production by March 2024. 

Such a project could have laid the groundwork for a win-win collaboration between the Palestinians and Israel.

The new resources of oil and natural gas finds in the Eastern Mediterranean are valued at an astounding US$524 billion.

But as the Israel-Palestine conflict has dramatically escalated in recent weeks, that no longer appears to be on the horizon, with the project frozen for the foreseeable future. 

Instead, on 29 October, as the war continued with no ceasefire in sight, Netanyahu’s government awarded 12 licences to six companies, including BP and Italy's ENI, for natural gas exploration off the Mediterranean Basin area.

The new resources of oil and natural gas finds in the Eastern Mediterranean are valued at an astounding US$524 billion. However, according to the UN report, a significant portion of those assets will have to be sourced from within the occupied territory of Palestine.

In addition, during the G20 summit in New Delhi this September, the US and EU announced their backing for a plan to build an economic corridor linking India with the Middle East and Europe - a massive project to rival China’s Belt and Road Initiative. 

Netanyahu described it as a cooperation project that is the greatest in our history, adding, “Our country Israel will be a central junction in this economic corridor; our railways and our ports will open a new gateway from India through the Middle East to Europe, and back.”

Israel’s plan is to become a major exporter of gas and some oil. In the past 20 years, the country has been transformed from a net importer of fossil fuels to an exporter of natural gas.

Netanyahu’s October 2023 declaration of war on Gaza is a continuation of Israel’s previous invasion of Gaza in 2014 when at least 2,104 Palestinian were killed, including 1,462 civilians. The underlying military objective of the occupation of Gaza is the expulsion of Palestinians from their homeland.

Israeli defence minister, Yoav Gallant, has said the plan is to eliminate everything and another minister, Gideon Sa’ar, said Gaza must be smaller at the end of the war. Moreover, an Israeli government concept paper proposed to transfer the Gaza Strip's 2.3 million people to Egypt's Sinai Peninsula. 

However, the ultimate objective is not only to demolish Hamas and/or exclude Palestinians from their homeland, but to confiscate Gaza's multi-billion-dollar gas resources.

 

Energy Crisis in Pakistan: Fact or Fiction

If one looks at the history of power sector in Pakistan, a few points are clear. These include: 1) a myth that the country has been persistently suffering due to the shortage of energy products, 2) the successive power policies have been have been introduced to serve the interest of local and overseas investors, 3) blatant theft of electricity and gas has been going on with the connivance of employees of utility companies, 4) regulatory authorities have failed in protecting the interest of consumers and remained subservient to the incumbent governments.

Energy shortage

Pakistan is blessed with an enormous potential of hydel power generation. According to the experts Mighty River Indus along has the potential to generate more than 40,000MW electricity per annum. Another 10,000MW electricity per annum can be generated from smaller hydel plants (run of the river type facilities which does not require construction of dams/reservoirs. In addition to that 50,000MW electricity can be produced annually from Thar coal. However, at present total hydel generation is around 8,000MW, which goes down when water level drops in dams. Thermal power plants (mostly owned and operated by the private) have the lion’s share in the total generation. The share of coal and nuclear power plants in the total electricity generated has remained minuscule. Though, a lot is being talked about changing the energy mix and curtailing use of gas for power generation, a little success has been achieved.

Serving vested Interest

Major hydel power generation facilities, i.e. Warsak, Mangla, Tarbella and Ghazi Brotha are located in the northen parts of the country and cater to the needs to KPK and upper Punjab. Karachi is hub of trading and industrial hub and it is totally dependent on thermal power generation. The city has 10% of the total population of the country but gets nothing from low cost electricity generated from hydel power plants. To be precise, K-Electric supplies electricity to some parts of Sindh and Baluchistan. If transmission of hydel electricity to Karachi is difficult or uneconomical, quota allocation of gas to K-electric should be doubled. Karachi is surviving on self generated electricity, the city has a latent demand of 5,000MW, whereas K-Electric is capable of meeting only half of this demand. One can still recall that in the early nineties E-Electric used to export electricity to Punjab. HUBCO was constructed to primarily meet Karachi’s demand, but it was ‘hijacked’ by WAPDA for meeting Punjab’s demand.

Blatant Theft

Blatant theft of electricity and gas been been going on for ages with the connivance of utilities. On top of all some of the parts of Pakistan are provided free of cost electricity. One may recall that at one time the average T&D losses of electric utilities were as high as 40%. Lately, gas UFG, which mostly comprise of theft hover a little less than 10%. On top of this, utility companies carry the load of billions of rupees of receivables, the probability of recovery is very low. According to some analysts, if K-Elecric pays off its outstanding dues, SSGC will be able to pay off almost all the payable amount to E&P companies. Containing theft or recovering outstanding dues does not require any rocket science, but a firm commitment. However, utilities fail completely helpless because of the pressure of political and linguistic groups. It is also necessary to put on record that utilities don’t provide connections, taking refuge behind non-availability of electricity/gas, but are prompt in providing ‘temporary connections, which are often without meters. Analysts term this ‘offical kunda’.

Regulatory Authorities

The Government of Pakistan (GoP) initiated the process of liberalization, deregulation and privatization. Under this policy, the private sector was encouraged to establish industries, which remained the exclusive domain of the state for decades and it was also offered the stake in state owned enterprises along with management control. Prior to that the World Bank has refused to lend more money to WAPDA and the shift in policy gave birth to HUBCO and other IPPs. 

IMF Recipe

Many analysts have the consensus that the International Monetary Fund (IMF) is the lender of last resort, but its recipes are not aimed at enabling any country to ‘stand on its own feet.’ Often the country is trapped in a vicious cycle of borrowing. However, the advantage is that if the country succeeds in developing its own home grown plan and meeting the condition imposed by the IMF, it may overcome the balance of payment crisis. 

Pakistan has a long history of remaining under the IMF support program. In one of the latest country report, the Fund has once again highlighted the need to introduce structural reforms for the power sector. These weaknesses identified are: 1) the persistence of circular debt, 2) DISCOs still operating under the state control, 3) high T&D losses, 4) failure to follow corporate governance and 5) lack of the mechanism for passing on input cost adjustments to end consumers.

Emphasizing US$55 billion in planned investments as a part of CPEC, the Fund anticipates improved economic activity made up of 19 Chinese sponsored power sector investments (US$17.7 billion) and non-CPEC energy projects (US$25.4 billion). Mode of financing for energy projects has been bifurcated into: 1) direct borrowing and investment from Chinese financial institutions, and 2) financing of projects by private domestic sponsors as well as government backed borrowing from multilateral lenders.

A detailed analysis of the power sector shows: 1) the country has enormous resources to produce low cost electricity, 2) if pilferage is contained cash flow of DISCOs will improve and 3) circular debt issue will be resolved. Appropriately managed conventional sources of power generation can help in meeting the electricity demand and there may not be an urgent need to invest in alternative sources of power generation.