BY HASSAN TAHSIN When news broke out prior to January 25, 2011 (the start of the Egyptian revolt) of Hosni Mubarak's secret deal to export natural gas to Israel, it outraged all sections of Egyptian society who felt betrayed by this arrangement of their regime with an archenemy of the Arab world. Following Mubarak's ouster, halting the export of natural gas to Israel was one of the major demands raised by the Egyptian people, leading Israeli Foreign Minister Avigdor Lieberman to say that Egypt was “more dangerous to Israel than Iran”. He also emphasized that the danger posed by Egypt to Israel after the January 25 uprisings was a strategic threat, and more disturbing to Israel than the nuclear ambitions of Iran. In light of the public's demands, the interim government was faced with a dilemma. It could not scrap the existing contract without any substantial reasons. There were also political reasons, most significant of which was the Camp David Peace Treaty and its conditions on Egypt. Apart from this, there was continuous American pressure not to disturb the existing agreements, which had been safeguarding Israeli and American interests. A decision to cancel the gas contract would be regarded as an instrumental step in worsening the situation by taking Egyptian-Israeli relations to their lowest levels, and leading to a volatile political situation. Some Egyptians in their uncanny wisdom realized the sensitive position faced by their provisional government and thus took matters into their own hands. They resorted to covert acts of blowing up the gas pipeline supplying Israel which runs through Egypt's Sinai Peninsula in an attempt to annul the treaty. Fourteen instances of pipeline sabotage have been reported and yet the perpetrators remain unidentified. Public reaction by the Egyptian government was one of utmost diplomacy. They reassured Israel of their continued intentions to honor the treaty in spite of rising public anger at the sale of gas to Israel at rates cheaper than market prices. The export of natural gas to Israel was based on a commercial agreement signed by the two parties – Egypt and Israel. Egypt was represented by a consortium of the Egyptian General Petroleum Authority, the Egyptian Natural Gas Holding Company (EGAS), the Egyptian General Petroleum Corporation (EGPC) and the East Mediterranean Gas Company (EMGC) while Ampal – American Israel Corporation, an Israeli investment holding company which has a 12.5 percent stake in EMGC, represented Israel. In 2011, Egyptian experts concerned with commercial agreements had been in pursuit of legal loopholes to end the deal with Israel, without creating a political crisis. They were keen to restrict this move to commercial lines and avoid linking it to the political whims of the people. Egypt then terminated the gas supply and purchase agreement on the grounds that EMGC, which was in charge of exporting gas to Israel, had defaulted in payment of dues amounting to about $100 million owed to the Egyptian General Petroleum Authority, and EGAS. They reiterated that this decision was in line with the provisions of the contract and conditions for the payment of financial dues. Although it caught Israel off-guard, Israel's Prime Minister Benjamin Netanyahu went on record to say: “We don't see this cutoff of the gas as something that is born out of political developments. It's actually a business dispute between the Israeli company and the Egyptian company.” To play down the impact on Israel of Egypt's decision, Netanyahu claimed that Israel had enough reserves of gas to make it totally energy independent, not only from Egypt but from any other source, and that Israel would become one of the world's exporters of natural gas. But this claim is false and it can be proven scientifically in view of the fact that the pipeline is passing through the occupied Palestinian territories. It is also evident that the Israeli government is troubled by the possible termination of the Camp David Peace Treaty by Egypt in the near future. A company of Egyptian troops recently started military maneuvers in Sinai and this could be an indication of this. Israeli television described the cancellation of the natural gas deal as a setback to the peace treaty. “The Israeli company is weighing the options of either approaching the court or embarking on a diplomatic initiative to tackle the problem,” it said. Furthermore, the hawkish wing in the Israeli government, led by Foreign Minister Avigdor Lieberman, has already started issuing hostile statements against the Egyptian government. He asked the Israeli government to take a bold political decision to revive the southern military command that was disbanded following the signing of the Camp David Treaty. According to a report in Israel's Maariv newspaper, this military command made up of three to four units had been deployed in south Israel. Lieberman demanded the necessary budgetary allocations to meet the expense of this army unit in the event of its revival, leading to speculation of a possible surprise attack in future. Meanwhile, it can be said that Egypt has managed the crisis quite well. It gave in to the people's demands, but used legal angles to abrogate the natural gas agreement. Israel's charge that this commercial dispute has no political dimension does not mean that this is the end of the matter. Undoubtedly, Israel will take vengeance in a way that harms Egypt's economic interests. To justify their actions, the Israelis will manufacture a number of excuses. Hence, we must always guard ourselves against such a possible reprisal. – Hassan Tahsin is an Egyptian writer and political analyst. He can be reached at htahsin
