John Siciliano & Josh Siegel
President Trump needs Egypt’s economy to grow up fast if he wants his vision of “energy dominance” to come into full force, seeing that the North African country is a key lynchpin in the global oil market, yet in desperate need of infrastructure investment.
At Tuesday’s meetings at the White House, Trump and Egyptian President Abdel Fattah Al-Sissi discussed a new, loosely organized natural gas collaboration between Egypt, Israel and Southern Europe as necessary for the two countries’ ambitions.
“One of the things we’ve been particularly encouraged by over the course of recent years is the increasing leadership role the Egyptians are playing in terms of developing the [natural] gas assets in the Eastern Mediterranean, which has been a very productive area of cooperation,” said a senior White House official with the National Security Council ahead of the meeting.
Trump wants Al-Sissi to use Egypt’s newfound natural gas discoveries to modernize the country’s economy and upgrade the global trade infrastructure at the Suez Canal.
Egypt political experts in Washington tell John that the country is both the key to Mideast peace and Trump’s oil export agenda, but it has to get through some serious growing pains first, including some that might not be obvious to the Trump administration.
First, Egypt is the U.S.’ gateway to ship oil to China and other parts of Asia through the Suez Canal, a major choke point for global energy commodities. Coal and natural gas exports from the West to East are also dependent on the canal.
But the problem is Egypt under Al-Sissi doesn’t have the cash to make key upgrades to allow more supertankers to pass through the gateway, despite some minor infrastructure upgrades a few years back. Trump needs his Egyptian counterpart to step it up, say experts.
An overwhelmed Suez: The Suez Canal could be overtaxed as U.S. exports are expected to double, Dr. Imad Harb, research director at the Qatar-backed Arab Center Washington, D.C., think tank, tells John.
“The question is: How much can the canal really take?” says Harb, who is an expert on Egypt as well as an informed observer of Trump’s policies in the Middle East.
The Trump administration has set up a working group to examine energy investments in Panama and potential improvements to the canal system there. But any new upgrades in the Panama Canal won’t be enough to accommodate large oil supertankers, making the U.S. increasingly dependent on the Suez to expand oil exports, according to the Energy Information Administration’s latest oil analysis.
Egypt needs more money to make the upgrades, but it doesn’t necessarily have it, due to increased domestic pressures from a growing and poor population.
To help fill the country’s coffers, Trump is supporting Al-Sissi’s ability to harness the economic power from some of the largest natural gas finds in the Mediterranean both off the Egyptian and nearby Israeli coasts.
Harb explains that U.S. firms, and the know-how from fracking, have helped make the energy finds, but now it's up to Egypt to step up its level of sophistication in order to begin producing from those finds in a way that benefits its economy. Harb has doubts that such a transformation can succeed under Al-Sissi.
Al-Sissi would need to divert his military spending to make the investments needed to develop Egypt’s newfound energy wealth and become an energy exporter itself.
OPEC of the Med: Israel is helping in that regard by joining with Egypt in developing a natural gas “forum” — a sort-of OPEC of the Eastern Mediterranean, but without the sophisticated legal framework to make it a full-fledged organization.
The forum, which was discussed at the White House Tuesday, would assist in the development of pipelines to begin moving natural gas from Israel and Egypt to Europe via Greece.
Russian competition: A white paper on the forum issued by the Arab Center showed that creating an export market is increasingly challenged for both Egypt and Israel, which cannot expect to compete in the natural gas export market with more sophisticated energy players Russia, Qatar, and Norway.
Joe Macaron, author of the paper, says this will likely mean the forum will be limited to helping its members develop the resources for its own use, and creating a low-cost energy market from Egypt to Jordan.
The forum is expected to agree to a formal charter soon.
President Trump needs Egypt’s economy to grow up fast if he wants his vision of “energy dominance” to come into full force, seeing that the North African country is a key lynchpin in the global oil market, yet in desperate need of infrastructure investment.
At Tuesday’s meetings at the White House, Trump and Egyptian President Abdel Fattah Al-Sissi discussed a new, loosely organized natural gas collaboration between Egypt, Israel and Southern Europe as necessary for the two countries’ ambitions.
“One of the things we’ve been particularly encouraged by over the course of recent years is the increasing leadership role the Egyptians are playing in terms of developing the [natural] gas assets in the Eastern Mediterranean, which has been a very productive area of cooperation,” said a senior White House official with the National Security Council ahead of the meeting.
Trump wants Al-Sissi to use Egypt’s newfound natural gas discoveries to modernize the country’s economy and upgrade the global trade infrastructure at the Suez Canal.
Egypt political experts in Washington tell John that the country is both the key to Mideast peace and Trump’s oil export agenda, but it has to get through some serious growing pains first, including some that might not be obvious to the Trump administration.
First, Egypt is the U.S.’ gateway to ship oil to China and other parts of Asia through the Suez Canal, a major choke point for global energy commodities. Coal and natural gas exports from the West to East are also dependent on the canal.
But the problem is Egypt under Al-Sissi doesn’t have the cash to make key upgrades to allow more supertankers to pass through the gateway, despite some minor infrastructure upgrades a few years back. Trump needs his Egyptian counterpart to step it up, say experts.
An overwhelmed Suez: The Suez Canal could be overtaxed as U.S. exports are expected to double, Dr. Imad Harb, research director at the Qatar-backed Arab Center Washington, D.C., think tank, tells John.
“The question is: How much can the canal really take?” says Harb, who is an expert on Egypt as well as an informed observer of Trump’s policies in the Middle East.
The Trump administration has set up a working group to examine energy investments in Panama and potential improvements to the canal system there. But any new upgrades in the Panama Canal won’t be enough to accommodate large oil supertankers, making the U.S. increasingly dependent on the Suez to expand oil exports, according to the Energy Information Administration’s latest oil analysis.
Egypt needs more money to make the upgrades, but it doesn’t necessarily have it, due to increased domestic pressures from a growing and poor population.
To help fill the country’s coffers, Trump is supporting Al-Sissi’s ability to harness the economic power from some of the largest natural gas finds in the Mediterranean both off the Egyptian and nearby Israeli coasts.
Harb explains that U.S. firms, and the know-how from fracking, have helped make the energy finds, but now it's up to Egypt to step up its level of sophistication in order to begin producing from those finds in a way that benefits its economy. Harb has doubts that such a transformation can succeed under Al-Sissi.
Al-Sissi would need to divert his military spending to make the investments needed to develop Egypt’s newfound energy wealth and become an energy exporter itself.
OPEC of the Med: Israel is helping in that regard by joining with Egypt in developing a natural gas “forum” — a sort-of OPEC of the Eastern Mediterranean, but without the sophisticated legal framework to make it a full-fledged organization.
The forum, which was discussed at the White House Tuesday, would assist in the development of pipelines to begin moving natural gas from Israel and Egypt to Europe via Greece.
Russian competition: A white paper on the forum issued by the Arab Center showed that creating an export market is increasingly challenged for both Egypt and Israel, which cannot expect to compete in the natural gas export market with more sophisticated energy players Russia, Qatar, and Norway.
Joe Macaron, author of the paper, says this will likely mean the forum will be limited to helping its members develop the resources for its own use, and creating a low-cost energy market from Egypt to Jordan.
The forum is expected to agree to a formal charter soon.
