Energy 1.084 views
This week, The New York Times painted a dire picture of the security situation in Egypt’s eastern Sinai Peninsula, which has witnessed increasing violence and instability since the collapse of the government of Hosni Mubarak in February 2011. Despite repeated government campaigns, the area has seen a sharp increase in militant activity and attacks on state and energy facilities. This week’s report described an growing tension between locals and a military whose actions have been described as unnecessarily aggressive and, in some cases, involving torture.
While this would be a worrisome situation for
any new government – especially one facing a national election next
month – the fact that Cairo has been unable to achieve some level of
stability in the region is especially challenging in light of the
country’s current energy challenges. After all, the Sinai Peninsula is
home to a series of natural gas pipelines that are expected to play a
part in new natural gas import agreements with Israel.
The region’s most populous country has long faced energy shortages due to a mix of underperforming local projects, unsustainable subsidy programs and demand growing beyond Cairo’s financial and reserve capabilities. However, since the collapse of Mubarak government, Egypt has struggled to avoid blackouts and shortages for both public and industrial consumers. After cutting exports to Israel last year, Cairo has now tabled the idea of using coal for energy production – a proposal that has been met with protests from environmentalists.
Earlier this year, Egyptian officials told The Wall Street Journal that they intended to pursue a new import agreement with Israel that would bring in as much as 8 billion cubic meters of gas from the country’s newly active Leviathan field a year. Reversing the two countries’ energy trade relationship, the deal would rely on one of two existing pipelines, at least one of which would travel through the tumultuous Sinai region.
In the years since the country’s government transition began, the Sinai Peninsula security situation has continued to worsen, including more than two dozen direct attacks on gas pipelines and downstream facilities. The attacks have spurred Cairo to repeatedly pledge military and police support, but as The New York Times report outlined this week, their efforts have not only failed to curb further attacks, but might actually be making the situation worse by alienating the local population.
Despite increased government pressure, militants were able to plant a bomb at a reserve pipeline facility in the Port of Said in the Northern Sinai in early March, marking the fifth such attack since the beginning of the year. Further unrest will likely make a Sinai pipeline option a difficult choice for both Israeli producers and Egyptian consumers.
A Cypriot Alternative
One possible option for Cairo to circumvent the
unstable Sinai pipeline option is to shift its Israeli imports through
Cyprus. Although Egyptian leaders have previously dismissed this option,
the pressure of ensuring new energy options in a time of such great
need – and at a time when wider political stability depends on a steady
flow of gas – could be enough to trump any reservations.
For now, Cairo does not show any signs of easing its military pressure in the volatile region, insisting that their approach is necessary as “terrorists are hiding among the people, and you don’t know who is who sometimes”.
Link to source: http://www.forbes.com/sites/christophercoats/2014/04/03/is-egypts-sinai-stable-enough-for-a-gas-future/?ss=business:energy
