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Delicate Landscape of the Eastern Mediterranean

Ioannis Michaletos, June 10, 2013

The Eastern Mediterranean region has been in a state of instability over the past few years, one characterized by the Arab Spring and the discovery of substantial hydrocarbon reserves. As a result, countries entangled in these culminations are either in a state of civil war, such as in Syria; civil unrest, such as in Turkey; or in a post-conflict political limbo like Libya. This instability plays a role in shaping the Middle East policies of major powers like the United States, Russia and European countries.

Since Israel discovered large natural gas reserves in the offshore Tamar and Leviathan fields—with an estimated 25 trillion cubic feet of gas between them—for the first time in its history Tel Aviv is able to disengage to an extent from Arab politics and from its reliance on Egyptian gas imports. Meanwhile, U.S. intervention attempts to mend the ties between Israel and Turkey, which have been severely damaged since the May 2010 incident when an Islamic Turkish organization named IHH tried to break the Gaza blockade. This U.S. strategy is based on the assumption that Turkey should be assisted in becoming the main energy hub between the European Union, the Middle East and Caucasus. Although, it is in Israel's long-term interest to achieve energy autonomy and a larger role in the energy affairs of its immediate Arab neighbors.

Tel-Aviv is maintaining an open channel of potential energy cooperation with Cyprus and Greece by drafting plans such as the "Eurasia electricity interconnector," a 2,000 MW line that will be used to transfer electricity to the European Union after being produced by the natural gas power plant to be built for that purpose. Further, Israel is keeping Moscow close, and recently an agreement was signed between Gazprom and the Levant LNG Marketing Corporation with details around the sale of liquefied gas to the Russian company.

Cyprus, having been severely battered by the E.U. decision of a haircut of deposits in its vital domestic banking system, is accelerating its strategy to achieve energy independence and clout based in its own natural gas discoveries. Over the past few years, the discovery of the Block 12 field that is estimated to contain 8 trillion cubic feet of gas has prompted Nicosia to pursue the East Mediterranean gas pipeline, which is the plan to transfer gas to Greece and thereafter Italy. The move could be a crucial one for the diversification of European energy imports. However, these moves are counteracted by Turkey, which proposes the transfer of gas in its own territory before it is channeled to Europe, in effect neutralizing any Cypriot action.

Turkey is pursuing two aims. One is to secure the establishment of the so-called "Southern Corridor route," which will transfer gas from the Shah Deniz field in Azerbaijan to the European Union, currently being contested by the consortium of Nabucco West and Trans-Adriatic Pipeline. The other aim is to pressure Cyprus and Israel to agree to future transport of their own gas reserves to Turkey before they are re-exported to international markets. That strategy is backed mostly by the U.S. administration, which views Turkey as a "moderate Islamic country" and as a model of political culture that could be exported to the rest of the region, and also as a potential springboard for the expansion of U.S. interests in the Caucasus and Central Asia. The Islamic agenda of the present Turkish administration has caused the Westernized stratums of Turkish society to stage riots across the country and bring the government under severe pressure. Turkey's involvement in the Syrian crisis by providing safe heavens and weapons to insurgents against Assad has also resulted in widespread instability in the country's Southern borders, and has increased tensions between Ankara, Iran and Russia.

Lebanon is another country with stakes in the game, due to the estimated grand reserves of offshore gas it holds in excess of 25 trillion cubic feet. Despite the fact that Beirut has managed to stay out of the Syrian civil war, its stability is linked to the crisis, due to the similar ethnic make-up of the two countries, Hezbollah's fighting for the Assad regime, and the existence of several other radical groups in its territory that could at any given moment destabilize the country and carry the political aftershocks of war-torn Syria into the streets of Beirut.

Egypt is still battling the economic aftershocks of its revolution, teetering on the brink of a debt crisis. Furthermore, the society is clearly divided along two lines, one being the religious one that divides Sunni Muslims and Christian Copts and the second cleavage being between "Westernized middle classes" and increasingly autarchic Muslim Brotherhood governance as exemplified by President Morsi's administration. Egypt retains the most East Mediterranean offshore gas reserves, estimated at more than 60 trillion cubic feet, although it has not made known any plans to export them.

It is important to be noted that the overall gas reserves in the region are not enough to secure steady long-term supply to the world markets and to fulfill local needs at the same time. Also, although the political ramifications of the Syrian crisis to the wider Mediterranean zone cannot yet be quantified, they will be substantial. As the number of refugees increases, so does the radicalization of an unknown number of rebels and their supporters, all while global powers fail to form a consensus on how to stabilize the region. It is also natural to assume that developments will be influenced further in Iraq and the Saudi Peninsula, as well as in Greece and the Balkan Peninsula, due to interactions based on common denominators, such as geopolitical interlinks, ethnic compositions, state interests and world energy markets.

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