Almost two months ago we posted about the gas deal between Egypt and Israel (see original post after the break). Our main point in the post was in the absence of facts and a reliable independent investigation of the deal, the public and the government are feeding the hysteria.
Now, it seems Egypt's national gas company notified Israel of canceling the deal due to a "business dispute". Surprisingly, it seems diplomatic officials in Israel agree that the cancelation is not politically motivated. The Israeli company (EMG) considered the unilateral termination "unlawful and in bad faith" and they are "considering their options and legal remedies". This will get messy and in the current political environment in Egypt will be a cause of celebration and will have to wait for the international arbitration outcome to know the truth.
|Egyptian Bedouins watch as smoke and flames rise into the air after masked gunmen blew up a terminal of the Egyptian natural gas pipeline to Israel and Jordan in El Arish, in the northern part of Egypt's Sinai Peninsula. AP Photo|
The 2005 natural gas deal between Egypt and Israel remains a lightning rod with legitimate questions mixed with conspiracy theories (did Egypt really sell the gas to Israel at below market rates? did Hussien Salem and Gamal Mubarak pocket the difference between real and recorded rates? was Egypt pressured into the deal? etc.,) However, it is hard to know the truth in the absence of a reliable investigation by independent authorities with access to people and documents. Since 2005 there was a hysterical obsession by the Egyptian opposition and Islamists to make sure any normalization attempts with Israel are defeated, including the gas deal.
Below is an excerpt from Lee Smith's article titled "How to Kill an Economy" in The American Standard, an ultra conservative magazine:
Israel was now paying Egypt more than what Cairo was charging customers like Jordan (which relies on Egyptian gas for 80 percent of its electricity), and twice what it paid for its own gas. Far from getting a sweetheart deal from the Egyptian government, says Wurmser, Israel was being blackmailed. "The Israelis had to stomach an unfair situation because the consumer agreements with the Israeli customers were already signed." As for the notion that Israel was paying Egypt much less than the going rate, Wurmser explains that there's no such thing as an international market price on gas. "Gas infrastructure can only be built by market agreements. You don't have free-floating Liquefied Natural Gas tankers. It's run like a railroad system. There are specific calculations regarding how to service that particular train, which routes it will run, etc."