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How Israel uses gas to enforce Palestinian dependency and promote normalization

March 14, 2017 6:24 P.M. (Updated: March 14, 2017 10:05 P.M.)
Noble's Homer Ferrington platform operates off Cyprus (AFP, file)
By: Al-Shabaka

This is an edited version of a policy brief authored by Al-Shabaka Policy Fellow Tareq Baconi. Read an unabridged version here.

Al-Shabaka is an independent non-profit organization whose mission is to educate and foster public debate on Palestinian human rights and self-determination within the framework of international law.

Israel’s occupation of Palestinian territory does not only exist above ground. Since 1967, Israel has systematically colonized Palestinian natural resources and, in the field of hydrocarbons, has prevented Palestinians from accessing their own oil and gas reserves. Such restrictions have ensured the continued dependence of Palestinians on Israel for their energy needs. The Palestinians’ own efforts to develop their energy sector fail to challenge Israel’s overarching hegemony over Palestinian resources. Rather, they pursue growth and state building within the reality of the occupation, further reinforcing -- even if inadvertently -- the asymmetric balance between occupied and occupier.

The energy crisis Israel imposes on Gaza and Palestine

Within the space of a few years, Israel has moved from being a regional gas importer to acquiring the potential to become an exporter. As Israel became awash with gas, the Gaza Strip’s pitiful reality became starker than ever. The Gaza Strip has been under blockade since 2007. The Gaza Power Generation Company (GPGC), the sole company of its kind in the Palestinian territory, currently runs on liquid fuel that is purchased and transported into the Gaza Strip from the Palestinian Authority (PA) in the West Bank.

To supplement power from GPGC, Gaza purchases electricity from the Israeli Electricity Company as well as from the Egyptian electric grid -- in line with the Paris Protocol, enshrined between Israel and the PLO as part of the Oslo Accords. Even so, fuel purchased for power generation in Gaza is insufficient to meet local demand, and the Strip has suffered from chronic electricity shortages since Israel imposed the blockade.

In early 2017, protests swept throughout Gaza as inhabitants of this coastal enclave protested having electricity for only three to four hours daily. Aside from the tremendous restrictions these shortages put on mundane facets of life, electricity outages have a crippling impact on the economic activity of the private sector, healthcare, education, and life-sustaining facilities such as water sanitation plants. Stunted operations in these areas have consequences that are both immediate and lasting, impacting rising generations.

Blame for Gaza’s energy crisis is fired in all directions. Protesters flooding the winter streets blamed Hamas’s government, the PA, and Israel. Anger was directed at Hamas’s government for allegedly diverting funds from the purchase of fuel necessary to run Gaza’s only power plant toward other activities, including the building of tunnels.

Frustrated demonstrators accused the PA of supporting the blockade by controlling fuel purchases and transfers into Gaza. The power company itself, a privately owned operation, is repeatedly criticized for supposedly making profit off the backs of ordinary Gazans who suffer from these shortages.

To mitigate the particularly painful winter months of late 2016 and early 2017, interventions into Gaza’s energy sector were forthcoming from Turkey and Qatar in the form of fuel supplies that allowed the resumption of power generation from GPGC. These measures are at best short-term palliatives that will carry Gazans through another chapter of a chronic crisis.

In this wave of popular anger and recrimination, the impact of the Israeli blockade on the Gaza Strip and Israel’s broader colonization and control of Palestinian resources is diluted, if not pushed to the background.

Yet Palestinians discovered gas reserves almost a decade before Israel’s gas bonanza. In 1999, the Gaza Marine field was discovered off the coast of Gaza, and the license for exploration and production was awarded to BG Group, the major British oil and gas company since acquired by Shell.

In the early days of the discovery, this national treasure was hailed as a breakthrough that could offer Palestinians a windfall. At a time when the Oslo Accords that had been signed in 1993 still seemed plausible, the resource discovery was viewed as something that could provide Palestinians with a much-needed boost toward self-determination.

With an estimated 1 tcf of gas, Gaza Marine is not sufficiently large to act as an exporter. But the gas volumes it holds are sufficient to make the Palestinian energy sector entirely self-sufficient. Not only would Palestinians not have to import Israeli or Egyptian gas or electricity, but the Gaza Strip would not suffer from any electricity shortages. Moreover, the Palestinian economy would enjoy a significant source of revenue.

That move to sovereign rule was not to be. Despite persistent attempts by owners of the field and investors to develop Gaza Marine, Israel placed unyielding restrictions that have prevented any measures from taking place. This is despite the fact that exploration and production from Gaza Marine would be relatively straightforward given the shallow depth of the reserve and its location close to Palestinian shores.

According to documents uncovered by Al-Shabaka, Israel initially prevented the development of this field as it sought commercially favorable terms for the gas produced. After Israel discovered its own resources, it began citing “security concerns” that were heightened with Hamas’s takeover of the Gaza Strip.

Although Netanyahu allegedly considered allowing Palestinians to develop Gaza Marine in 2012 as part of a broader strategy to stabilize the Gaza Strip, these efforts have yet to materialize. Given the recent acquisition of BG Group by Shell, and the latter’s global asset divestment program, it is likely that Gaza Marine will be sold off.

Until Israel ends its stranglehold on the Palestinian economy, this Palestinian asset is likely to remain stranded. Indeed, the manner in which the Israeli and Palestinian gas discoveries have shaped economic development in Israel and the Palestinian territory elucidates the power disparity between the two parties. Unlike Israel, which rapidly secured energy independence after the discovery of its gas fields, Palestinians are unable to access a resource they discovered close to two decades earlier.

Rather than addressing the root cause of the blockade and the occupation regime that has prevented their control of resources such as Gaza Marine, Palestinians are instead forced to seek immediate measures that mitigate the pressing misery they face. Although this is understandable in the context of a brutal occupation, efforts to enhance quality of life under occupation overlook the longer-term strategic goal of securing energy independence within the broader goal of freedom from occupation and realization of Palestinian rights.

Economic peace and normalization

Israel’s gas discoveries are often heralded as potential catalysts for a regional transformation. The positioning of the Israeli state as an energy supplier to resource-poor neighbors is considered a sure way to facilitate economic integration between countries such as Jordan and Egypt as well as the Palestinians.

The economic benefit that cheap pipeline gas could offer these countries is seen to offset any social and political concerns among their citizens regarding dealings with Israel. This line of thinking assumes that through economic integration, the pursuant stability would diminish prospects of volatility in an explosive region as Israel and its neighbors become integrated in mutual dependency.

The notion of “economic peace” has a long history in the region and has manifested itself in various forms, including recently in Secretary of State John Kerry’s economic development proposal. This view also appears favored by the Trump administration’s ambassador to Israel, David Friedman.

Rather than directly addressing the political impasse caused by Israel’s prolonged occupation and other violations, such proposals address issues related to quality of life, trade, or economic growth, presumably as a stepping stone to peace. With similar thinking, once the Israeli gas discoveries were made, the Obama administration began to explore ways to position Israel as a regional energy hub.

Proponents of this approach of separating national and political rights from economic incentives would argue that there is an obvious commercial advantage for Israeli gas to be used within the Palestinian territory and Jordan. Israel now has an excess of gas, and these regions are still dependent on energy imports.

In the case of the Palestinian territory, dependence on Israel already exists, and not only in Gaza: close to 88 percent of Palestinian consumption is supplied by Israel, with the West Bank importing almost the entirety of its electricity from Israel. Advocates for economic peace believe that prospects for instability diminish when such mutual dependency is reinforced.

The dangers of truncated sovereignty

There are several national and regional dangers to the push for closer integration through gas deals in the absence of a concurrent effort on the political front.

The first danger is that Palestinian energy security is pinned to Israel’s goodwill. Israel can and has in the past used its power to effectively turn the taps off for Palestinian consumers. The most evident (and violent) manifestation of Israel’s willingness to withhold power to Palestinians is its decision to destroy without hesitation the sole power generation company in the Gaza Strip during its bombardment of the coastal enclave in 2006 and again in 2014.

Secondly, this approach legitimizes the Israeli occupation, soon entering its fiftieth year. Not only is there no cost to Israel’s prevention of Palestinian state building, there is rather a direct reward in the form of revenue from the sales of gas to territories maintained indefinitely under Israel’s territorial control.

Thirdly, and perhaps most importantly, such energy exchange and trade in the pursuit of economic peace in the absence of any political prospects merely entrenches the power imbalance between the two parties -- the occupier and the occupied. Such integration propagates a fiction of normative sovereign relations between an occupying power and a captive economy in the West Bank and Gaza.

One might think back to similar quality of life initiatives that were put forward in the 1980s, with the direct encouragement of the Reagan White House, as a failed alternative to political engagement with the Palestine Liberation Organization (PLO). The constant efforts to circumvent Palestinian political demands through such measures has allowed Israel to manage, rather than resolve, the conflict.

The case of gas demonstrates most starkly how Palestinian state building efforts through the development of national resources have been elided in favor of alleviating energy crises within the framework of truncated sovereignty. Instead of addressing Palestinians’ inability to explore their own natural resources, American diplomats are actively working with Israel to facilitate negotiations that enhance Palestinian “quality of life” that ultimately leaves them bound to Israel in perpetuity.

This approach carries regional dangers as well. Jordan is currently dependent on Israel for around 40 percent of its energy imports. Jordan’s willingness to enter into this kind of commitment, despite several geostrategic disadvantages, advances Israel’s normalization in the region even as it maintains its occupation of Palestinian territory.

This disposition heralds several threats at a time when the Trump administration is proposing the pursuit of “outside in” diplomatic measures that might entirely circumvent the Palestinians.

Strategies for pushback

In normal conditions, mutual dependency and economic development are indeed anchors against instability and hold the benefit of advancing the quality of life of the inhabitants of the region. However, they must not be viewed as an end in their own right, and certainly not as a substitute for the realization of Palestinian rights. Such a depoliticized view can only go so far. Focusing solely on economic peace has detrimental consequences precisely because it overlooks the broader historical context that has led to Palestinian, and possibly regional, dependency.

Economic growth will never remove Palestinian calls for sovereignty and rights or the demand for self-determination. That was a lesson that was fully articulated with the eruption of the first intifada close to 30 years ago, after decades of normalized economic relations between Israel and the territories under its military occupation. While “economic peace” could offer short-term relief, it will only pave the way toward greater stability if it is built on a foundation of equality and justice.

Palestinians’ right to their own resources is subject to final status negotiations with the Israelis. The current gas agreements being pursued will create an infrastructure of dependency that will be difficult to untangle in the case of a negotiated settlement. More importantly, given the vanishing hopes of a negotiated two-state solution, these agreements merely concretize the status quo.

Therefore, while economic relations may have to be pursued to avert humanitarian suffering, as the case might be with increasing fuel and electricity supply to Gaza, the PLO and PA as well as Palestinian civil society and the Palestine solidarity movement must continue to use all the tools at their disposal to push for justice and rights for Palestinians.

At the same time, the PLO/PA must use such economic negotiations as a means of securing accountability from Israel rather than as a way of acquiescing to enforced dependency. In particular, the non-observer member state status that Palestine has secured at the UN must be used to lobby at international legal forums such as the International Criminal Court to push Israel to meet its responsibility as an occupying power under international law. This means it is tasked with the responsibility of safeguarding the livelihood of inhabitants under its control, including the provision of electricity and fuel, and it is accountable for decisions it might make to “turn the taps off.”

Certain elements of economic peace may serve the Palestinians in the short term by underpinning economic growth and development. But these cannot come at the expense of an indefinite state of dependency and truncated sovereignty. Palestinians must work on two fronts: They must push to hold Israel’s occupation accountable in international forums. And they must ensure that prospects of forced economic integration and any attempt by Israel to impose a one-state apartheid reality is met by a call for rights and equality. Whichever political vision is pursued for Israel and the Palestinians, the Palestinian leadership must formulate a strategy around these gas deals and contextualize notions of economic development within the wider struggle for Palestinian liberation.

The views expressed in this article are the authors and do not necessarily reflect Ma'an News Agency's editorial policy.
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