October 1, 2022

Israel-UAE oil transport deal sparks environmental, security concerns in Tel Aviv

2021-06-11 15:21:25

Israel’s Environmental Protection Minister Gila Gamliel has called on National Security Council head Meir Ben Shabbat to cancel an oil deal recently signed with the United Arab Emirates (UAE), noting that transporting the petrol through Israel would cause environmental damage and the increased risk of attacks on vessels and storage facilities in the region, Israeli newspaper Haaretz reported on June 8.

The deal, which was finalized six months ago, essentially enables the transport of Emirati oil to the Mediterranean, via the company’s pipeline. The Europe Asia Pipeline Company estimates the number of oil tankers arriving in Israel will increase annually from six to over 50, the newspaper reported. In accordance with the deal, tankers are already arriving at Eilat carrying hundreds of thousands of tons of oil.

“This deal is of great political but also economic importance to both countries, as it cements their rapprochement following the Abraham accords,” Charles Ellinas, senior fellow, Global Energy Center, Atlantic Council, told New Europe on June 11. The Abraham Accords marked the normalization of relations between the UAE and Israel. “But it would almost certainly be a target in a future flare-up between Hamas and Israel, especially given the strong condemnation of the rapprochement by the Palestinians,” he argued, adding, “As such, this deal would pose a security concern. In addition, in Israel environmental issues are always at the top of public concern and it is not surprising that the Environmental Protection Minister has taken an exception to this deal, particularly as it appears that he was not consulted when it was being devised.”

Ellinas warned that any attack on oil facilities associated with this deal could have devastating environmental consequences in a region which is of such importance to the Israeli tourist industry. “With a change of government in the offing in Israel, it remains to be seen how this issue will be handled,” the senior energy fellow at the Atlantic Council said.

Israeli lawmakers are expected to cast a vote of confidence on the Bennett-Lapid government on June 13, followed by a swearing-in ceremony for the new government. Under a deal unveiled on June 2, Naftali Bennett, head of the right-wing Yamina party, is partnering with Yair Lapid, head of the centrist Yesh Atid party, and six other parties spanning the political spectrum, including an independent Arab party for the first time, the WSJ reported.

According to Israeli daily Haaretz, Israel’s Environmental Protection Ministry in the letter to the National Security Council on June 8 argues that the oil transport deal with the UAE should be scrapped due to the many risks to marine ecological systems in case of malfunctions or hostile actions. According to the ministry, the Eilat-Ashkelon’s pipeline storage compound is located in the most sensitive part of the city’s famed Coral Beach Nature Reserve and Conservation area. Due to the structure of the Eilat Bay and the relatively strong currents and winds, any leak will cause rapid contamination of coral reefs, the ministry warned.

Following the Abraham Accords in 2020, UAEs’ Mubadala Petroleum, which belongs to Mubadala Investment Co, a sovereign wealth fund with $232 billion in assets, signed a memorandum of understanding (MoU) in April 2021 to buy a 22% stake in Israel’s Tamar offshore field, which is located 90 kilometers west of Haifa and can produce 11 billion cubic meters of gas per year. The field holds over 300 billion cubic meters of gas reserves and is operated by US energy giant Chevron who holds a 25% stake.

Ellinas told New Europe this deal is more likely to survive any political tensions in the Middle East. “It has the full support of the US, especially given that the operator of Tamar is one of US’ largest oil companies, Chevron,” he said, explaining that, in addition, Mubadala’s involvement in the project is commercial and not physical. Operatorship of Tamar will remain with Chevron, with Mubadala becoming one of the shareholders in the field.

“Again, the project cements the developing relationship between Israel and UAE, with both countries – and the companies involved – benefiting economically, but also politically from this project,” Ellinas said, adding that Tamar is a highly profitable project, central to Israel’s energy needs and security, and it also exports gas to Egypt and Jordan.

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