On Wednesday October 12, the Israeli government approved a US-brokered deal to share offshore natural gas with Lebanon. The agreement was then brought to the Knesset, though not put to a vote, much to the chagrin of the opposition. Lebanon’s President Michel Aoun signed the deal on October 13, just before leaving office on October 30.
The deal was unusual in many ways.
- Lebanon and Israel are formally at war; hence, each nation signed the agreement with the US, rather than with each other.
- The gas field in question, the Qana field offshore of Lebanon, may not contain commercial quantities of gas at all; it has not been fully explored.
- Israel’s government is transitional, pending national elections on November 1 – normally major strategic decisions cannot be signed by a caretaker government.
- Opposition leader Benjamin Netanyahu blasted the deal, calling it a sellout to Hezbollah and threatening not to honor it when (if?) he returns to power, ignoring the fact he tried and failed for a decade to reach just such a deal. Many observers doubt Netanyahu would renege on the deal and draw US ire.
Here are the basics of the deal and a survey, mainly of the pros.
What are the key points of the deal?
- The deal involves gas fields that overlap the Israeli and Lebanese exclusive economic zones.
- An exclusive economic zone (EEZ), as defined by the 1982 UN Law of the Sea, is an area of the sea in which a sovereign state has special rights regarding the exploration and use of marine resources, including energy production from water and wind. It stretches from the outer limit of the territorial sea, 12 nautical miles from the coast, out to 200 nautical miles. Territorial borders, in contrast, stretch from the coast outward, to 12 miles.
- The deal sets an agreed EEZ border between Israel and Lebanon for the first time, known as Line 23, ceding part of the Karish field to Lebanon, sharing royalties from the Lebanese Qana field that overlaps Line 23.
- The US will mediate any royalty disputes. The new agreed boundaries will be submitted in charts to the UN.
- Line 23 involves a southward ‘jog’ in the EEZ border from Israel’s initial bargaining position, leading to claims Israel illegally agreed to cede territory. A Knesset Law requires a referendum, or 80 Knesset members’ approval, to do so; under the deal, Israel cedes 1,800 sq. kms., or 695 sq. miles of the EEZ.
- Attorney-General Gali Baharav-Miara has ruled that ceding maritime EEZ areas does not violate Knesset Law, which refers to geographical borders. She has said she is prepared to defend the agreement before Israel’s Supreme Court.
- The territorial security border, marked by buoys, will remain as it is, for the initial 5 kilometers (3 miles), and will then jog south to follow Line 23.
What does Lebanon gain?
It unlocks foreign energy investment, in a failed nation with foreign debt of $100 billion. The Qana field is as yet unexplored, but in the best case scenario, could hold more than 424 billion cubic meters of gas, generating up to $6 billion in revenues over 15 years – a lifeline for Lebanon.
What does Israel gain?
It removes, for now, the threat of a gas war with Hezbollah and the latter’s threatened attack on the nearby Karish field, now readying production. It comes at a cost to Israel of potential gas revenues of $2-4 billion, which are largely hypothetical – without an agreement, no global energy companies would ever agree to risk huge investments to develop gas fields. Israel invaded Lebanon twice – in 1992 and again in 2005. The deal is not a peace accord, but it may be even better – a win-win agreement that entails huge losses to both nations if gas installations are attacked, holding them hostage to non-hostilities. As Haaretz columnist Meirav Arlosoroff noted tersely, Israel has bought peace and quiet with [giving up] money – one of our most successful strategic moves.
Who is Amos Hochstein, the US official who doggedly brokered it?
Hochstein’s diplomacy, and US pressure on both Lebanon and Israel, were crucial. Hochstein was born in Israel. He served in the IDF for three years, before moving to Washington, DC. On August 10, 2021, US Secretary of State Anthony Blinken appointed him as Senior Advisor for Energy Security. Blinken sent Hochstein to mediate the dispute over offshore natural gas that overlaps the Israel-Lebanon. He presented a compromise proposal to the two sides in early August. I believe Hochstein’s IDF background and knowledge of Hebrew were critical in gaining him credibility from the Israeli side. Hochstein told The Jerusalem Post’s Tovah Lazaroff that “this is not a traditional agreement…. After 10 years there was an opportunity to end the maritime border conflict. A collapsed Lebanon is not a recipe for security for Israel.” An understatement! Syria, a failed nation, is big trouble; Gaza is a mess. Lebanon is a doubly failed state; offshore gas can help a lot.
“This is not a traditional agreement…. After 10 years there was an opportunity to end the maritime border conflict. A collapsed Lebanon is not a recipe for security for Israel.”
Amos Hochstein
How badly off is Lebanon?
Catastrophic. Lebanon’s financial crisis is in its third year. Banks have closed and people have been breaking into bank branches trying to access their money. Per capita GDP has collapsed. Young people are leaving the country. Gallup reports two-thirds of all Lebanese want to leave permanently, if they only could.
The World Bank has accused Lebanese politicians of running a “giant Ponzi scheme,” using state resources for political patronage, misusing people’s savings for over 30 years. Gross domestic product collapsed to $21 billion in 2021, from about $55 billion in 2018. This is the kind of contraction seen only in major wars, the World Bank observed. Eight Lebanese in ten are now classified as “poor.” Power is in short supply; households get only a few hours of electricity a day. The Lebanese pound has crashed; a ride in a sherut (shared taxi) now costs 50,000 pounds.
Why is the Mideast, including Israel, a crucial global source for natural gas?
According to The Economist, “Mideast countries are sitting on an ocean of natural gas.” Nine of the 20 countries with the largest proven gas reserves are in the region, including Israel. Egypt imports Israeli gas, liquefies it and then exports it – a boon for both countries. It is interesting that many of Cairo’s ubiquitous taxis now run on natural gas. With Russian gas supplies disrupted, Europe needs every bit of Mideast gas it an get. Israel began producing natural gas offshore in 2004. Consumption of natural gas has quadrupled since 2012, to over 11 billion cubic meters yearly. By 2017, it was producing 9 billion cubic meters of gas yearly and began exporting gas to Jordan. Proven reserves are well over 200 billion cubic meters and growing.
How are Britain and France involved?
French energy giant TotalEnergies is deeply interested in Lebanese gas, leveraging longstanding French links to that country. British firm Energean is running tests at Israel’s Karish field, which is part of the deal. So is Russia. Russian firm Novotek has a 20 per cent share in a once-disputed offshore border area.
What do Israeli military officers say?
In my view, much weight should be given to the opinion of Eliezer (Eli) Marom, former head of the Israeli Navy and a confirmed right-winger. The Israeli Navy has been given the mission to defend offshore gas installations. Marom, who is known as “Chiney” because he’s of Chinese descent (his mother was the daughter of a Russian-Jewish woman and a Chinese man who had converted to Judaism), says definitively, the deal is good for Israel, good for Lebanon, and good for the entire region. And he should know.
Finally, a key, little-noticed benefit?
The US is back. After precipitous military withdrawals from Iraq, Syria, and then Afghanistan the US is again intimately involved as a peace broker. US muscle, skill and even money are again playing a positive constructive role. The hotheads no longer solely control the narrative. ■
The writer heads the Zvi Griliches Research Data Center at S. Neaman Institute, Technion and blogs at www.timnovate.wordpress.com