[Sustain] 2008 Article: Connection Between Natural Gas & Israel Gaza Attacks

[Eric Brooks]

http://electronicintifada.net/v2/article9245.shtml

Gaza siege intensified after collapse of natural gas deal
Mark Turner, The Electronic Intifada, 23 January 2008

(photo) Palestinian Authority President Mahmoud Abbas and appointed 
Prime Minister Salam Fayyad attend a signing ceremony between OPIC 
(Overseas Private Investment Corporation) and the Palestinian Investment 
Fund in the West Bank city of Ramallah, July 2007. (Omar Rashidi/ 
MaanImages/POOL)

Israel has dramatically intensified its military campaign in the Gaza 
Strip, stepping up air strikes and shelling of the beleaguered coastal 
strip. UN officials and human rights advocates warn that Gazans now face 
a humanitarian disaster of unprecedented magnitude with widespread 
disease and famine rapidly becoming reality as electricity generation, 
water supply, sewage treatment, food supplies and medical services grind 
to a halt as a consequence of the ever tighter Israeli blockade.

Israel claims its recent moves are retaliation for continued rocket 
attacks originating in Gaza that despite their consistency cause scant 
damage and few actual casualties. But the reasons may include 
motivations with roots back in 2000, when the British firm British Gas 
Group (BG) discovered proven natural gas reserves of at least 1.3 
trillion cubic feet beneath Gazan territorial waters worth nearly $4 
billion.*

The Palestinian Investment Fund (PIF), a financial holdings company 
owned primarily by independent Palestinian shareholders, is investing in 
the project and heads the negotiations in coordination with Mahmoud 
Abbas' government in the West Bank. BG won a majority stake in the 
concession to develop the Gaza Marine Field and originally targeted 
Egypt for the sale of the natural gas. But pressure from then-British 
Prime Minister Tony Blair led the company to redirect its efforts toward 
Israel and develop plans for an underwater pipeline that would transport 
the gas to an Israeli refinery at Ashkelon. That deal could have 
eventually provided Israel with approximately 10 percent of its annual 
energy requirement, and would have generated approximately $1 billion 
for the PIF. The Hamas election victory in 2006 put all that in jeopardy.

The Palestine Investment Fund was set up by Salam Fayyad, a World Bank 
veteran lauded by the United States as a practical thinker and fiscal 
reformist who would deliver transparency to the Palestinian Authority's 
financial dealings. In 2003, then PA Finance Minister Fayyad 
consolidated a varied collection of Palestinian Authority holdings into 
the fund audited by Standard & Poor's and now valued at an estimated 
$1.3 billion. The fund's portfolio includes Palestine's most profitable 
company, Paltel, and serves as the primary vehicle for private 
investment in Palestinian sustainable infrastructure.

The PIF is ostensibly overseen by the Palestinian Authority; revenue 
generated by the fund could potentially be available to a Hamas-led 
government. Through the deal structured with the PIF, BG owns 90 percent 
of the Gaza Marine license. Consolidated Contractors Company, a 
Palestinian owned construction firm, owns the remaining 10 percent. The 
Palestinian Authority retains an option to take a stake in the 
concession once production is sanctioned. After the 2006 Palestinian 
election results, Israel began stalling in its negotiations with BG. Any 
deal that could result in funds reaching Gaza would seriously undermine 
official Israeli policy toward Hamas. For its part, Hamas assured it 
would not interrupt development of the project, but reserved its right 
to restructure parts of the deal it deemed harmful to Palestinian 
interests. In an interview with Dow Jones Newswires, Minister of Economy 
Ziad al-Zaza reiterated Hamas opposition to any sale of fuel to Israel.

After the Hamas election victory, Israel embarked on an intense campaign 
to eliminate the movement as a viable political entity in Gaza while at 
the same time attempting to rehabilitate the defeated Fatah as the 
dominant political player in the West Bank. By leveraging political 
tensions between the two parties, arming forces loyal to Abbas and the 
selective resumption of financial aid, Israel and the United States 
effectively re-installed Fatah in the West Bank, projected the party 
back onto the international stage and revived the possibility of 
concluding the energy deal.

With Hamas isolated geographically in Gaza, Israeli policy focused on 
isolating it politically as well. Israel has made significant progress 
toward this goal. Fayyad was appointed Prime Minister of the new 
unelected West Bank government recognized by the West, and by April 2007 
the Israeli Cabinet had reversed an earlier decision to prohibit the 
purchase of natural gas from the Palestinian Authority. But with 1.5 
million people living in the Gaza Strip, Hamas retains significant 
influence in the Palestinian political arena. Israel will have to 
eliminate the party completely in order to create a political climate 
suited to accommodate the BG deal. Time is running out.

In January, BG announced it was pulling the plug on negotiations with 
Israel due to the long impasse, and was again considering Egypt as a 
buyer. The Egyptian option includes liquefying up to a third of the gas 
for export to the US and Europe. BG announced plans to close its office 
near Tel Aviv at the end of January and sell its share in Israel's 
offshore Med Yavne natural gas field. Since the announcement, Israel has 
radically expanded its sanctions, cut fuel shipments entirely and 
stepped up its military campaign. Increased air strikes and use of 
internationally proscribed tank shell ammunition has led to a drastic 
increase in civilian deaths and injuries in hopes of eroding support for 
Hamas in Gaza. Combined with dangerous shortages of food, water and 
basic supplies, the coastal region has fallen into catastrophe. Israel 
and the United States refuse to acknowledge the growing chorus of 
international condemnation. Appeals from Ramallah lack the popular 
mobilization needed to effectively advocate an end to the Israeli siege. 
Regardless of the future of the Gaza Marine Field, Gazans can be sure 
they will be denied any relief it might once have afforded them.

* Editor's note: This article originally stated the natural gas reserve 
has 1.3 trillion cubic meters rather than feet. The Electronic Intifada 
regrets the error.

International human rights activist Mark Turner recently returned from a 
nine-month stay in Balata Refugee Camp in the northern West Bank city of 
Nablus. Turner is currently touring the US, presenting his experiences 
and analysis of the developing situation in occupied Palestine and can 
be reached at Mark.Turner[@]ResearchJournalismInitiative.net.

-- 
"I am not a liberator. Liberators do not exist. The people liberate 
themselves." – Che Guevara