Gaza's Hidden Resources

Gaza has abundant offshore natural gas resources. But the Palestinians have been blocked from reaping the economic benefits.

By Subir Guin | 2009-04-01 12:00:00

It is a mystery why no mention is made of the gas reserves lying untapped off the coast of Gaza. Anyone reading the Internet reports on the Israeli Defence Forces (IDF) attacks on Gaza between December 27 and January 17, 2009, is well aware of the IDF's deployment of F-16 fighter jets, howitzers, and white phosphorous flares in this densely populated area, cordoned off by a virtually impenetrable boundary.

Operation Cast Lead was launched in response to rocket attacks by elements of Hamas on Israeli territory. Both sides bear responsibility for the loss of lives and property. Amnesty International believes both Israel and Hamas could be held guilty of war crimes once all the evidence of human casualties is pieced together. However, few dispute the fact that the ferocity of the IDF's attack was hugely disproportionate.

Following Arafat's death in November 2004, Mahmoud Abbas of Fatah took over as president of the Palestinian Authority (PA), preferred by the Israeli government and Washington. Abbas knew his party could not stand up to Hamas without help. The extent of Washington's role in its abortive attempts to back Abbas and oust Hamas is outlined in David Rose`s article in Vanity Fair (April, 2008). Contrary to all expectations, Hamas not only won more seats in Palestine's Legislative Council, but took complete control over Gaza, having already earned solid grassroots support from its people.

Israel and the West continue to regard Hamas as a terrorist organization, and have thus far refused to include them in any negotiations. However, some Washington insiders and human-rights activists around the world -- including a growing number within Israel -- see this as a major obstacle to lasting peace.

Gaza has Natural Gas

Early in 1999, The Jerusalem Post reported that Israel and British Gas Group (BG), one of the world's largest purveyors of natural gas, were actively prospecting for gas some 36 kilometers off the coast of Gaza. BG Group and its drilling partner, the Athens-based Consolidated Contractors International Company (CCC) were granted exploration rights in a 25 year agreement signed that year with the Palestinian Authority. The BG licence covered the entire offshore marine area, 60 per cent of which was within Palestinian jurisdiction. The reserves were estimated at around 1.4 trillion cubic feet, valued at approximately $4 billion.

Over the ensuing six and a half years, BG and officials from Israel's Finance and National Infrastructure Ministries tried to reach an agreement to pump the gas into Israel. The talks broke off as neither side could agree on a price. Prior to that, when Hamas took over Gaza following the June 2007 election, it staked its claim on the gas fields, and prepared to commence fresh negotiations with BG. Israel was not willing to allow Hamas any part of this. Moreover, British Gas was forbidden by its government from making any deals with Hamas and the project has since dropped from the public eye.

It appears Israel's objective is to break down Hamas to the point where it is no longer capable of attacking Israel, or negotiate a binding cease-fire agreement stipulating assurances from Hamas that it will stop its rocket attacks and cease smuggling weapons into Gaza from Egypt.

Removing the democratically elected Hamas from power in Gaza and putting Fatah in charge will be almost impossible. However, the Israeli government retains its aspirations to wrest control of the gas fields that Hamas is claiming as its own, and restore it to the PA. Apparently Israel and BG resumed negotiations in late 2008.

International instability and internal squabbles have made it impossible for Palestinian officials to use their newfound resource. In 2005 Israel delivered a major blow to the Palestinians by electing to import natural gas from Egypt. By doing this, Israel completely bypassed its neighbor as a political statement. The Israeli government fears that any money flowing into Palestinian coffers would be used to fund acts of terrorism against Israel.

Reserve Would be Ample

This deal destroyed Palestine's early plans to establish a flourishing gas industry in Gaza that would create much needed jobs and substantial revenues for the Palestinian government.

Many industry experts believe that this reserve would amply cover all of Palestine's energy needs with much left over for export.

In an effort to recover from the setback caused by Israel's deal with Egypt, the Palestinian government decided to work with British Gas to use their newfound resources. British Gas began working on a deal with Egypt that would allow 1.5 billion cubic yards of natural gas to be exported for 50 years through a Gaza-El-Arish pipeline. This deal would have meant economic growth for Palestine, but this time it was the British government that pulled the plug.

In his online column "Global Research" (January 9, 2009) Michel Chossudovsky declared that "the invasion of Gaza by Israeli Forces bears a direct relation to the control and ownership of strategic offshore gas reserves."

Subir Guin is an associate editor of Peace.