Tony Blair: Gaza gas now a serious prospect

The prospect of the impoverished Palestinian Authority finally being able to develop a natural gas field 20 miles off the Gaza Strip's Mediterranean coast, 13 years after it was discovered, is looking increasingly good amid U.S.-led efforts to bolster the Palestinian economy. "For the first time in over a decade, there's a serious prospect Gaza gas will actually happen," former British Prime Minister Tony Blair, divulged this week. "The Palestinian side is resolved; the Israeli side will take a little longer," he told the Financial Times in Jerusalem. Although the project seems much closer to fruition than it's ever been, previous plans to encourage peace efforts in the Middle East have crashed in flames because of the abiding hostility between the two sides and the continuing 46-year Israeli occupation of the West Bank. Blair is the Jerusalem-based representative of the Middle East Quartet, which comprises the United States, Russia, the European Union and the United Nations, and oversees efforts to secure a peace agreement between Israel and the Palestinians. He said the $1 billion gas project headed by Britain's BG Group, which as British Gas discovered the gas field under the Mediterranean in 2000, is under discussion by the Israeli and Palestinian governments. The aim is to supply gas to the impoverished, Israeli-blockaded Gaza Strip and the occupied West Bank through Israeli territory. The field, known as Gaza Marine, has never been exploited because of the Israel-Palestinian conflict. The political and security aspects were further complicated by the June 2007 takeover of the Gaza Strip by fundamentalist radicals of Hamas, who drove out the mainstream Fatah movement which still controls parts of the West Bank. Hamas and Fatah are at daggers drawn, despite Arab efforts to reconcile them to present a united front to the Israelis in the much-battered peace negotiations. So that obstacle must be overcome if the gas project is to have a chance of moving forward. If the plan to exploit the field does materialize, it would transform the rickety Palestinian economy, reliant on foreign aid and taxes collected by Israel, and enhance the prospects of a final peace agreement two decades after the landmark Oslo Accords. However, there's considerable pessimism on both sides that renewed efforts by U.S. Secretary of State John Kerry to wrestle the two adversaries into a historic deal will succeed. This is largely because the Israelis show no sign of surrendering the West Bank, where some 340,000 Jewish settlers now live, with another 20,000 in East Jerusalem. This is where the Palestinians want to establish an independent state. The Gaza gas project would provide a launch pad for the $4 billion economic investment plan for the Palestinians that Kerry unveiled in June. Energy investment forms a key part of that blueprint. "Palestinian and Israelis officials are believed to have agreed in principle on plans to exploit the gas field," observed Simon Henderson, director of the Gulf and Energy Policy Program at the Washington Institute for Near East Policy. "Developing Gaza Marine could be a win-win-win for the West Bank, Gaza and Israel, boosting the Palestinians' economic prospects and sense of self-determination. "But in a region noted for zero-sum outcomes, further progress will likely require much diplomatic effort." Henderson noted that "Israel agreed to allow the field's development more than a year ago," although "the more recent progress toward a breakthrough also stems from diplomatic efforts to boost the Palestinian economy." At present, Israel supplies 95 percent of the West Bank's electricity, with Jordan the rest. The Gaza project will require investment of $1 billion and could be onstream by 2017. The field holds an estimated 1 trillion cubic feet 2,000 feet below the Mediterranean, although the prospects for further discoveries are good given the proximity of Israel's larger fields that contain around 30 tcf. Although Gaza Marine is dwarfed by Israel's Leviathan and Tamar fields further north, there's enough gas to supply the Palestinians for 10-12 years. "The most obvious way to bring the gas ashore is by linking the field with Israel's nearby seabed pipeline structure, which connects with a gas processing plant" outside Israel's southern port of Ashdod, Henderson observed. "From there the gas could be easily -- and cheaply -- piped into the West Bank."