Gaza Marine Gas Field

The Gaza Marine gas field has a tenuous legal status at best. The field straddles Gaza’s maritime borders as defined under the Oslo Accords and the 1994 Gaza-Jericho Agreementi, but those borders currently face severe restrictions by Israeli naval forces. Furthermore, these borders conflict with Egypt’s view of its maritime sovereignty – a view that, if realized, would drastically reduce the extent of Gazan waters and thus jurisdiction over Gaza Marineii. Exactly who controls the gas field is therefore uncertain. This question of control, however, will become increasingly important in light of the reconciliation between Hamas and Fatah. The role of Palestine and Israel in developing Gaza Marine, as well as the implications of the reconciliation agreement, constitute the focus of this essay. First, it is necessary to compare de jure and de facto control over the gas field. De jure, the field falls under the jurisdiction of the Palestinian Authority (PA)iii, which granted British Gas Group (BGG) a 25-year exploration license in 1999iv. Currently, BBG and its partner, Consolidated Contractors Company, hold 90% of the rights to Gaza Marine, while the Palestinian Investment Fund holds 10%. De facto control, however, lies with Israel, which patrols Gazan waters and limits Gaza’s maritime borders to roughly 3 nautical miles offshorev. (Gaza Marine, in comparison, lies over 16 nautical miles offshorevi.) Consequently, any attempt to develop the gas field must necessarily be approved by Israel. Indeed, though Israel acknowledged the Palestinian Authority’s legal hold over the field in 1999vii, it has used its de facto control and international backing from the US and UK to set favorable commercial termsviii, often bypassing the Palestinians and negotiation with BGG directlyix. More important, with this de facto control, Israel can exclude Hamas from reaping the benefits of Gaza Marine. Though Hamas has no recognized authority over the gas field, should Israel purchase gas from the PA, that revenue might indirectly reach Hamas and other terrorist organizationsx. Taking over the field thus allows Israel to dictate development plans and the flow of money to Palestinians. (Unsurprisingly, Hamas decries this exclusion and the “theft” of Gaza Marine, which it sees as under its jurisdictionxi). Yet Israel has not excluded all Palestinians from negotiations for various reasons. First, the recent discovery of the much larger Leviathan and Tamar gas fields off the Israeli coast makes Gaza Marine less valuable to Israel. Furthermore, as shown by Netanyahu’s previous support for development plans, Israel had still hoped to foster economic cooperation between itself and the PAxii xiii. Indeed, a fraction of Gaza Marine’s $4 billion value could give a much-needed boost to the Palestinian economyxiv. Production could relieve the West Bank and Gaza Strip’s dependence on Israeli electricity and fuel new Palestinian industries like cement with cheaper prices. And revenue from selling gas to Israel would help the Palestinian government pay worker salaries and offset foreign aid. Though economic cooperation could rekindle fear of financially supporting terrorism, Israel’s de facto control over the field could mitigate this possibility by influencing the commercial terms with the PA and investors. Of course, reconciliation between Hamas and Fatah will undoubtedly change Israeli calculus. To predict future action, we need to look at multiple factors, including past Israeli policy over natural resources in the occupied territories and the overall political climate. Israeli policy on natural resource allocation – especially water – can act as precedent for future gas allocation policy. Under Oslo II, Israel appropriated 80% of water resources from the region’s aquifers, leaving 20% to the Palestiniansxv. However, during the second Intifada, Israel clamped down and confiscated even more Palestinian water resources, destroying infrastructure and reducing the Palestinians’ ability to produce their own water in the processxvi. Israel policy today limits the infrastructure development Palestinians need to meet basic water demands, forcing them to rely on Israeli sourcesxvii. As a result, Israel now discriminates in allocating water to the Palestinians, who face constant shortages and health hazardsxviii. The water situation mirrors that of Gaza Marine. Legally, Palestinians should have greater access to water and infrastructure for self-sufficiency. But in reality, Israeli forces control the vast majority of water in the region, allowing the country to dictate its allocation and development. That allocation, in turn, severely discriminates against Palestinians “in the name of security”xix; in other words, it is another tool for suppressing Palestinian political and terrorist activity. Similarly, Gaza Marine legally belongs to the Palestinians but is de facto controlled by Israel. Its development and allocation – like the region’s water supply – therefore depend on Israeli policy. Judging from Israel’s domination of Palestinian water resources, it is safe to assume that Israel will discriminate in Gaza Marine’s allocation absent a peace agreement ending the occupation. Furthermore, it would probably justify Gaza Marine’s appropriation by the need to deny terrorist organizations a crucial source of revenue, especially in the event of Palestinian reunification. And like Israel’s water discrimination (“in the name of security”), gas discrimination would hit all Palestinians under a unity government. Despite the Palestinian Investment Fund’s 10% share of Gaza Marine, Israel will not likely allow any revenue to reach a Palestinian government even partially backed by Hamas. Israel could preclude this revenue for Palestine in two ways. First, it could use its de facto control of the field to prevent any development (much like it uses its control of the occupied territories to prevent Palestinian water and other infrastructure developmentxx). Or, more likely, it could simply circumvent the Palestinians and negotiate directly with BGG (although the Palestinian Investment Fund’s 10% stake could complicate this). A direct deal with BGG would give Israel a temporary energy source before developing the Leviathan gas field, slated for production in 2017xxi. So despite the PA’s legal hold over Gaza Marine, it will not be able to develop the field while Israel’s de facto control continues. Whether or not Israel decides to unlawfully appropriate Gaza Marine depends on many factors, but even without reconciliation between Hamas and Fatah, it will continue to control the field as long as peace talks falter and security risks persist. ihttp://www.washingtoninstitute.org/uploads/Documents/opeds/Henderson20140301- GermanMarshallFund.pdf, page 5 – 6 iihttp://www.washingtoninstitute.org/uploads/Documents/opeds/Henderson20140301- GermanMarshallFund.pdf, page 6 iii http://www.offshore-technology.com/projects/gaza-marine-gas-field/ iv http://www.globalresearch.ca/war-and-natural-gas-the-israeli-invasion-and-gaza-s-offshore- gas-fields/11680 v http://www.btselem.org/gaza_strip/control_on_air_space_and_territorial_waters vi http://www.offshore-technology.com/projects/gaza-marine-gas-field/ viihttp://www.washingtoninstitute.org/uploads/Documents/opeds/Henderson20140301- GermanMarshallFund.pdf, page 5 viii http://mondediplo.com/blogs/israel-s-war-for-gaza-s-gas ix http://www.globalresearch.ca/war-and-natural-gas-the-israeli-invasion-and-gaza-s-offshore- gas-fields/11680 x http://www.haaretz.com/news/ya-alon-british-gas-natural-gas-deal-in-gaza-will-finance- terror-1.231576 xi http://mondediplo.com/blogs/israel-s-war-for-gaza-s-gas xii http://www.ft.com/intl/cms/s/0/13474ef2-3027-11e3-80a4- 00144feab7de.html#axzz32Mhko6EH xiii http://www.al-monitor.com/pulse/business/2014/01/russia-palestine-offshore-gas-field- gaza.html xiv http://www.ft.com/intl/cms/s/0/13474ef2-3027-11e3-80a4- 00144feab7de.html#axzz32Mhko6EH xv http://www.btselem.org/water/discrimination_in_water_supply xvi http://www.cesr.org/downloads/Palestine.RighttoWater.Factsheet.pdf xvii http://www.haaretz.com/news/middle-east/1.574554 xviii http://www.cesr.org/downloads/Palestine.RighttoWater.Factsheet.pdf xix http://www.cesr.org/downloads/Palestine.RighttoWater.Factsheet.pdf xx http://www.alhaq.org/publications/Water-For-One-People-Only.pdf, page 9. xxi http://www.offshore-technology.com/projects/leviathan-gas-field-levantine-israel/