Will an Israeli Energy Boom Make the EU Pro-Israel?

This year, production will begin in one of the largest natural gas finds of the last decade, the aptly named Leviathan gas field. Located deep off the coast of the northern Israeli port city of Haifa, Leviathan is estimated to hold over 21 trillion cubic feet of natural gas—enough to fulfill Israeli power-generation needs for the next 40 years while still leaving ample supply for export. Leviathan could prove to be a game-changer for Israel’s relations with the rest of the world—and how foreign governments view the continuing Israeli occupation of Palestinian territories.

Some commentators have suggested that the recent gas finds in the Eastern Mediterranean might lead to the long-term settlement of regional conflicts. New efforts at regional cooperation have already emerged. In January, Israel, Egypt, Cyprus, and other regional players announced the creation of the Eastern Mediterranean Gas Forum, which will explore the possibility of building a 1,200-mile pipeline connecting the rich hydrocarbon reserves of the Levantine basin with Europe via Cyprus and Crete. The European Commission has contributed nearly $39 million to the project, which is estimated to take around seven years to complete.

In the meantime, Israeli and Egyptian firms have reached a landmark agreement that will make gas available for export. Under the agreement—worth $15 billion—Israel will ship 2.3 trillion cubic feet of natural gas to Egypt to be liquified and shipped to Europe and other destinations. Egypt has both the excess capacity needed to process hydrocarbons as well as the transportation infrastructure necessary to supply European energy needs as soon as Leviathan comes on line.

However, disputes over ownership of the gas fields have already emerged, in particular with Gaza and Lebanon. And the absence of Syria, Lebanon, and Turkey from the Eastern Mediterranean Gas Forum highlights the limits of regional cooperation.

But the significance of the Leviathan gas find transcends Israel’s relations with its closest neighbors. The start of production could help free Israel from its historic dependence on foreign energy, while the potential for exports will afford it new leverage over other countries, among them the energy-hungry member states of the European Union, which have historically criticized Israel’s policies toward the Palestinians.

While much of the Middle East relies on abundant oil reserves, Israel has, until recently, been energy-poor. Owing to hostile relations with nearby oil-producing Arab states, it was once forced to seek energy from distant suppliers such as Angola, Colombia, Mexico, Egypt, and Norway to meet both its economic and its pressing security needs. Though Israel has often pursued controversial policies in spite of regional opposition and against international public opinion, like many small, energy-poor states, it is ultimately highly susceptible to external pressure.

Most notably, U.S. support for Israel affords the United States enormous influence. During the 1973 Arab-Israeli War, the United States made emergency military resupplies available to Israel for the first time. Later, in an effort to incentivize peace talks with Egypt, it promised to make oil available to Israel in an emergency. Israel has since become the largest recipient of economic aid from the United States. As a result, Washington has occasionally wrung concessions from Israel’s government, for example coaxing it to participate in the Madrid peace talks in 1991 and freezing settlement construction in 1991 and again in 2009. U.S. security and economic guarantees mean that Washington enjoys tremendous leverage over Israel despite its reluctance to use it at key junctures.

The EU, by contrast, has been more consistently willing than the United States to pressure Israel over major sticking points in Israeli-Palestinian negotiations, such as Israeli settlements in the West Bank and other areas and the status of Jerusalem. In response to the Arab oil embargo of the 1970s, for example, numerous European countries distanced themselves from Israel, straining relations with the United States. In the mid-2000s, Israel bowed to EU pressure in a dispute over declaring whether Israeli goods originated in West Bank settlements. More recently, several European states have indicated that they will reject the Trump administration’s peace plan if it tilts too heavily in favor of Israel.

But as Leviathan makes Israel less dependent on foreign powers for its energy needs, Europe is likely to become more dependent on Israel and other energy exporters. Europe is heavily reliant on imported crude oil and natural gas. Indeed, more than half of its energy comes from foreign sources, making it profoundly vulnerable to fluctuations in price and supply.

In response to the 1973 Arab-Israeli War, for example, OPEC cut off oil supplies to several European states, causing widespread shortages and a dramatic rise in the price of oil. Currently, almost two-fifths of European gas supplies come from Russia, creating a significant geopolitical dilemma. Moscow’s willingness to cut off gas supplies to Ukraine in 2014 was a wake-up call to European countries about the risks of depending on Russia’s liquified natural gas (LNG) supply. For several years now, the Nord Stream 2 pipeline project, which aims to bring Russian gas directly to Germany, has exacerbated divisions within the bloc. Several Eastern European and Baltic countries oppose the project given the leverage it is likely to give Russia over Germany and in light of Russia’s history of weaponizing energy supplies for political purposes.

At the same time, the demand for LNG is significant. The European Commission’s Energy Roadmap 2050 calls for increasing the use of natural gas across the bloc as a substitute for coal in the quest for energy diversification. And its Southern Gas Corridor project, which has so far established three pipelines from the Caspian Sea and Middle Eastern regions to Europe for alternative gas supplies, has been a favored way to achieve this goal for some time now.

While purchases of Israeli gas will not solve the problem of Europe’s reliance on imports or its continuing dependence on coal, the EU does have a clear interest in diversifying its energy supplies so it will not be entirely beholden to Russia. Thus, a stable supply of Israeli gas would be a highly attractive alternative source for Europe. Leviathan and other finds in the region could go a long way toward meeting European demand while decreasing reliance on Russia, which explains why Brussels has already begun to work with Israel toward greater energy cooperation, including identifying the Eastern Mediterranean pipeline as a project of common interest.

Imports of Israeli gas could also help accelerate intra-EU trends toward a more pro-Israel orientation among European states. For years, Prime Minister Benjamin Netanyahu has been trying to use Europe’s deepening ideological divisions to Israel’s advantage. He has cultivated ties with populist leaders in countries such as Poland and Hungary as a way to reduce EU pressure on Israel over human rights issues. It has started to work—in May 2018, Hungary, the Czech Republic, and Romania blocked an EU statement criticizing the Trump administration’s decision to move the U.S. Embassy to Jerusalem.

Some EU countries, such as France, Sweden, and Ireland, have remained consistently critical of Israeli policies. But other countries such as Germany, which currently imports significant amounts of Russian LNG, are under major pressure from the United States to find alternate supplies. In June, U.S. President Donald Trump threatened Germany with sanctions for its Russian gas purchases. Germany has long been less critical of Israel for historical reasons. It is thus plausible that if Israel became an important source of German LNG supplies, Berlin would move more firmly into the pro-Israel camp, thereby substantially changing the balance of pro- and anti-Israel forces on the European continent.

If Israel becomes an important source of German LNG supplies, Berlin could move more firmly into the pro-Israel camp, thereby substantially changing the balance of pro- and anti-Israel forces on the European continent. 

There is no guarantee that this would happen, and other LNG suppliers such as Azerbaijan and Turkmenistan may ultimately supersede Leviathan. But even a partial replacement of Russian with Israeli supplies could have the effect of dampening EU pressure on Israel over human rights issues.

Europe might also be less willing to play an active role in any future peace process, particularly if Israel chooses to use its newfound resources coercively, as Russia has done. Combined with declining Palestinian support for a two-state solution, and the lack of a meaningful appetite on the part of Israeli politicians to reach a final settlement, the prospects for peace in the form of Israeli and Palestinian states coexisting side by side as envisioned in the Oslo peace accords of the 1990s would be greatly diminished.