Energy-Starved Lebanon And Israel Scramble For Gas Fields

If Israel and Lebanon – or Israel and Hizbollah – turn their offshore oil and gas dispute into an "underwater Shebaa Farms", both sides will lose.

By Charles Glass

Shebaa Farms is that small patch of Lebanon to which Israel clung when it withdrew from its northern neighbour in 2000. The 14 farms comprise little more than 2,000 hectares and may be worth a few million dollars. As insignificant as the Shebaa area is, it is the reason Hizbollah gave for maintaining its military wing after all the other Lebanese wartime militias had disarmed. It was the ostensible casus belli for the Israeli-Hizbollah war of the last 11 years, including Israel's abortive invasion of 2006. Although Shebaa's strategic, economic and historical value is almost nil, Lebanon and Israel have been locked in a state of permanent tension over it.

If the two sides prolong war over some wheat fields, imagine what they would do for fields of gas and oil worth billions of dollars.

Just when Lebanese and Israelis thought they could get some sleep at night, as no one really cares about Shebaa, the two countries are at daggers drawn over the riches below their contested seabed. Hizbollah leader Hassan Nasrallah warned Israel last week: "Whoever harms our future oil facilities has their own [facilities] and consequently will face the same damage." Even the normally pacific Lebanese minister of energy and water, Joubran Bassil, accused Israel of "playing with fire by violating Lebanon's maritime border and oil rights". A year ago, Israel's deputy prime minister for infrastructure Uzi Landau set the tone of debate: "We will not hesitate to use our force and strength to protect not only the rule of law but international maritime law." (Ignore for the moment how Israel's respect for maritime law squares with its decades-long harassment of south Lebanese and Gazan fishermen and its attacks on humanitarian ships bound for Gaza.)

Lebanon and Israel are desperate for cheap energy. Lebanon relies for 96 per cent of its consumption on oil imports, and its inability to provide all-day power to the whole country remains a national disgrace. Efforts to introduce renewable energy, in a country where the sun shines most of the year, have done little to reduce reliance on imported oil. Israel has done more to encourage solar and other non-fossil fuel energies, and it produces some oil. However, it imports 99 per cent of its oil needs. Electricity charges rose 20 per cent this summer. Israel's Tamar and Leviathan offshore fields, neither of which is disputed by Lebanon, promise 25 trillion cubic feet of natural gas - a huge boost for local industry. Lebanon, too, has discovered vast reserves. Lebanon and Israel's undisputed fields alone would create economic booms, but a small portion of their reserves are near their common border. If Israel and Hizbollah take their land battle to the sea, both countries will lose.

For the moment, Lebanon and Israel are taking their maritime maps to the United Nations. Traditionally, when Israel needed something, it took it. In the occupied West Bank, it seized not only land for settlements but also most of the territory's water. While settlers fill their swimming pools and irrigate their gardens each summer, their Palestinian neighbours go without sufficient water for living. When Israel conquered the Sinai from Egypt in 1967, it took Egyptian oil as a spoil of war. When it finally signed a peace treaty with Egypt in 1979, it asked the United States to compensate it for the loss of revenue.

Israel has been negotiating with British Gas and other western companies to exploit oil and gas deposits off Gaza. Although it signed an agreement with Yasser Arafat that recognised Palestinian rights to offshore resources, it insisted that the oil be piped to Ashkelon in Israel rather than to Egypt. This would have guaranteed Israeli control over the marketing. The agreement faded with Israel's reaction to the second intifada.

In Lebanon, the Israel-Hizbollah oil war is upsetting the local equilibrium. Sheikh Nasrallah's threat against Israel prompted the Lebanese Forces' Samir Geagea to retort: "The Lebanese army, not you, will deal with our oil installations in the event they were exposed to risk." Apart from the obvious fact that the Lebanese army (unlike Hizbollah) has never been a match for Israel, Mr Geagea is risking a round of internal Lebanese fighting to assert state primacy over Hizbollah's self-declared "resistance".

In the long run, Hizbollah rockets will do less to restrain Israel from exploiting potential Lebanese resources than the oil companies' fears of Arab reaction. If the Arab oil states line up behind Lebanon, any firm that pilfers Lebanese oil for Israel will probably be boycotted by most of the Arab oil producers. The Lebanese energy minister, Mr Bassil, has already warned that "Israel will not be the only damaged part, but also large companies that cooperate with it". Standard Oil, Shell and the other majors are unlikely to sacrifice billions in profits from the desert sands for a few cents worth of oil off Tyre.

No one needs to fight over the oil. The American diplomat Frederic Hof is attempting to head off a conflict. Unusually for a US official, he has urged Israeli restraint. Barak Ravid wrote in Ha'aretz: "Hof told his counterparts in Jerusalem that Israel should cooperate with setting the maritime border to prevent the creation of an 'underwater Shebaa Farms'." Israel is refusing to negotiate through the United Nations, insisting that Lebanon discuss all outstanding border issues including Shebaa directly. The International Court of Arbitration of the Law of the Sea in The Hague should decide the issue, but Israel (unlike Lebanon) has not ratified the UN Convention on the Law of the Sea. Until it does, the oil may sit under the seabed waiting for more mature leaders to pump it out.

-This commentary was published in The National on 01/08/2011
-Charles Glass is the author of several books on the Middle East, including Tribes with Flags and The Northern Front: An Iraq War Diary. He is also a publisher under the London imprint Charles Glass Books