On Christmas Day, the Russian state-owned energy giant, Soyuzneftegaz, inked an agreement in Damascus for exclusive rights to extract natural gas in SyriaaEUR(TM)s territorial waters. While U. S. foreign policy promises to pivot away from the Middle East, PutinaEUR(TM)s petrostate seems laser-focused on the game-changing potential of the Eastern Mediterranean.
The Eastern Med seabed contains up to 122 trillion cubic feet (tcf) of natural gas, according to the 2010 U.S. Geological Survey. Many geologists now think the Levant Basin area could add considerably more to that total. To date, only U.S.-based Noble Energy, ItalyaEUR(TM)s ENI, Delek of Israel, and South KoreaaEUR(TM)s Kogas are developing these rich fields in Cyprus and Israel. But Greece, Egypt, Lebanon, Syria, and Turkey, as well as Cyprus and Israel, all stand to benefit from this good fortune.
The shared interest in a prosperous future could drive longstanding conflicts toward resolution. Indeed, natural gas and other energy opportunities were the subtext of the reconciliation between Israeli Prime Minister Netanyahu and Turkish President Erdogan last spring. ItaEUR(TM)s no accident that Israel, as the leading beneficiary so far of these natural gas discoveries, has been the first mover. It began exporting the resource from the Levant Basin to Jordan and the Palestinian Authority last year, just as it finalized legislation to create a sovereign wealth fund. A week ago, in fact, Israel agreed to supply the Palestine Power Generating Co. with $1.2 billion worth of natural gas to produce electricity.
Because of the central importance of oil, the Persian Gulf came to define the Middle East in the last century. ThereaEUR(TM)s an optimistic case to be made, however, that a less polluting hydrocarbonaEUR"natural gasaEUR"could help bring the oil era to a close. Discoveries are multiplying, most notably in the United States, and its use as a feedstock for methanol, compressed natural gas, and other liquid fuels could cut oil prices and spark global growth. That would also reduce greenhouse gas emissions and slow climate change, as environmentalists, including Nobel laureate chemist George Olah, have pointed out.
While Saudi Arabia and Alaska are richer in gas and oil, the Eastern MedaEUR(TM)s proximity to important European markets creates a competitive advantage. Turkey, which imports almost all of its gas and oil, is eager to diversify its suppliers and become an energy hub itself. Natural gas is not only a conventional energy source for electricity and heating, but a feedstock for methanol fuel, as mentioned above, as well as new materials and chemical industries. It has the potential to revolutionize Eastern Mediterranean economies, integrate regional trade, and boost growth.
Divided by history, but united by future interests in natural gas and other energy alternatives, the non-oil producing regions of the Eastern Mediterranean are creating an opportunity for long-term economic cooperation. In short, the best hope for that group of nations is a shift in the regional center of gravity. Such a transformation would provide a critical path toward transportation solutions and a more sustainable economy.
The Eastern Mediterranean has always proved that it could serve to join as well as divide. Historian David Abulafia teaches in his classic aEURoeThe Great Sea: A Human History of the MediterraneanaEUR? that this region has been the most aEURoevigorous place of interaction between different societies on the face of this planet.aEUR? Just as the Phoenicians and others brought cultural advances of the late Bronze Age to Iron Age Greece and Italy through writing, education, and trade, so too might a renewed Eastern Med elevate this dispute-riven region and lands beyond in the years ahead.