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Most Palestinians of a certain generation can rememberĢżthe September day in 2000 whenĢżPLO leader Yasser Arafat appeared on Palestinian national TV to announce the discovery of off the coast of Gaza.

From the bridge of a fishing boat, and with a wide smile on his face, the Palestinian leader described the discovery as to the Palestinian people for generations to come.

"This will provide a solid foundation for our economy, for establishing an independent state with holy Jerusalem as its capital,ā€ he added.

Confidently, in his usual theatrical manner, Arafat signalled to the British Gas (BG) engineers to light the flare on top of the floating platform, sending a column of flames into the sky.

Fresh out of failed negotiations at Camp David with Israel and virtually on the eve of what would soon become the Second Intifada, the timing was convenient for the Palestinian leadership.

"Since the beginning of the Second Intifada, Israel has established de facto control over Gazaā€™s offshore gas reserves"

In retrospect, Arafatā€™s optimism was perhaps premature; boosting the , like everything else, was Israelā€™s decision.

With the eruption of the Second Intifada, the gas field was shut down, and negotiations in the following years to revive it proved fruitless, often marred by Israelā€™s security and political considerations.

Following the end, last week, of the fourth Israeli war on Gaza in 13 years, which left 274 Palestinians, including 66 children, dead, the detrimental impact ofĢżthese restraints on Palestineā€™s economic development has only been further reinforced.

Background

The 1995 Oslo II Accords, Annex I, between the Palestinian Authority (PA) and Israel granted the former maritime jurisdiction of up to 20 nautical miles (23 statute miles) from the Gaza coast, which enabled the PA to sign a 25-year contract with British Gas in November 1999 for gas exploration.

The British company had already discovered a large gas field in the area, the Gaza Marine, earlier that year, approximately 22 miles offshore, at a depth of 2,000 feet and with a of good quality natural gas.

Yam Thetis, a consortium of three Israeli companies and a US firm assigned to the adjacent Israeli gas fields, protested that the PA wasnā€™t a sovereign state and, therefore, lacked the authority to sign gas exploration contracts.

Nevertheless, Israelā€™s then prime minister Ehud Barak, in July 2000, granted BG security authorisation to drill the first well, Marine-1, and later in November, Marine-2.

It was a political decision, not a legally binding recognition of the PAā€™s jurisdiction over the Palestinian territorial waters, marking, in fact, a pattern of Israelā€™s interpretation of the Oslo Accords, often favouring Israeli full control over Palestinian decision-making and livelihoods.

Since the beginning of the Second Intifada, Israel has established de facto control over Gazaā€™s offshore gas reserves. In the wake of Operation Cast Lead in December 2008, the Israeli government effectively brought the gas field with noĢżregard forĢżinternational law.

Bypassing the PA and Hamas in Gaza, the Israeli defence authorities in 2007 wanted to sign a deal with BG, where Israel would deprive the Palestinians of financial revenues from Gazaā€™s gas and, instead, pay them in goods and services.

For Israel, the system fitted two long-standing colonial policies. First, to keep Palestinians on the verge of aĢż but never in complete meltdown,Ģżtherefore reducingĢżthe political struggle to mere daily survival, and, second, to maintain control over Palestinian economic lifelines, effectively using them as a tool for political pressure and collective punishment when needed.

Unrealised potential

According to the , exploitation of the Gaza Marine was projected to produce revenues of $2.5-7 billion. It was to provide a domestic energy source, sufficient power for Gazaā€™s water desalination efforts, as well as eliminate the PAā€™s debt, currently estimated at .

As the gas field remains inaccessible, Palestinians continue to accumulate losses of billions of dollars that would have otherwise, at least, stabilised the Palestinian economy and, more importantly, solved the chronic energy crisis in the Gaza Strip.

"Israel maintains control over Palestinian economic lifelines, effectively using them as a tool for political pressure and collective punishment when needed"

The densely populated territory requires about 560 megawatts of electricity to meet the populationā€™s needs. What is available now is only 200 megawatts - 60% of which comes from Israel via 10 power lines, the rest from Gazaā€™s diesel-run power plant with fuel provided by Israel and paid for by Qatar.ĢżThe power plant produces electricity for . The gap is bridged through unsafe methods such as generators, which continue to cause accidents and claim lives.

As an alternative solution, reported in February this year, a plan is being by a quartet of Israel, Qatar, the PA, and the EU to provide Gaza with gas from Israelā€™s deep-water Leviathan field through a pipeline that would come directly from Israel.

Part of the pipeline would be funded by Qatar and the section in Gaza paid for by the EU. If an agreement materialises, construction could commence within the year, according to . The flow of Israeli gas to Gaza would double, or even quadruple, the output of Gazaā€™s power plant, achieving a 24/7 supply of electricity.

Despite having the potential to be a desperately needed humanitarian intervention for Palestinians in Gaza, whilst also providing economic benefits for Israel, the projectā€™s political sustainability remains in question.

There are concerns it would put Palestinian energy supplies, more than ever, at Israelā€™s mercy, further tightening its grip on Palestinian economic resources. Any new escalation in Gaza could also see Israel simply turning the gas off, a pattern similar to Israelā€™s repeated imposition of fishing zone restrictions and the withholding of PA tax revenues as a form of collective punishment.Ģż

Recent efforts

Almost parallel to the Qatari-EU effort to supply Gaza with Israeli gas, Egyptā€™s Energy Minister, Tareq Al-Molla, visited Ramallah in February to sign a memorandum of understanding on developing the Gaza Marine Gas Field. Palestinians hope that Egyptā€™s efforts and regional relations will allow them to after years of Israeli objections.

Chair of the state-owned Egyptian Natural Gas Holding Company (EGAS), Magdy Galal, stated that the company will cooperate with the PA to reach an agreement that will ultimately lead to the extraction of gas, its transfer to Palestinian areas, and possibly even its sale to Egypt. Only short pipelines will be used ā€œto deliver Palestinian gas to Egyptian territories and then export it abroad,ā€ Galal added.

This week, it was reported that new initiatives wereĢżunderway to discuss the demarcation of borders between Egypt and the PA, which would include Palestine's maritime borders andĢżan Exclusive Economic Zone (EEZ) off Gaza's coast.

A proposal to discuss the Ģżwas also reportedly discussed in recent ceasefire efforts between Egypt and Hamas.

On the surface, the Palestinian position on energy appears unified, but theĢżPA-Egypt deal in February proved that thisĢżwasnā€™t the case. To Hamas, the PA acted unilaterally. In February, , deputy chairman of Hamasā€™s politburo, tweeted ā€œGaza must be present in any understandings about the gas fields on its shores,ā€ demanding to ā€œknow more details about the deal.ā€Ģż

Hussain Al-Sheikh, the PA's minister for civil affairs, was quick to respond by saying that ā€œthe agreements are signed with states, not with factions and organisations,ā€ seemingly implying that Hamasā€™ status in Gaza is de facto and therefore doesnā€™t qualify as a state-level government.Ģż

For Gazans, the Hamas-Fatah verbal jousting is just white noise. What matters is a solution to the large-scale socio-economic deterioration devastating the besieged coastal territory, which has since 2014 worsened dramatically, to the extent of forcing thousands of Gazaā€™s to leave, most never to return.

"The question for most Palestinians is whether any guarantees actually exist to prevent Gazaā€™s energy sources from simply becoming another means of pressure, if not collective punishment, when fully developed"

The big question

In theory, a functional Gaza Marine will improve peopleā€™s lives. However, any speculation would be premature given itā€™s all tied to Israelā€™s decision to allowĢżPalestinians to benefit from their own gas resources.

At present, the specifics of Egyptā€™s role in convincing Israel to ā€˜releaseā€™ the Gaza Marine field are unclear. It is likely, however, that Cairoā€™s diplomacy will stem from its role as the founder and largest producer in the newly established East Mediterranean Gas Forum (EMGF), which also includes Cyprus, Greece, France, Jordan, Israel, and Palestine.

The EMGF creates a new geopolitical reality where Israel can sit at the same table as the Palestinian Authority. With a scaled-down US presence in the region, Egyptā€™s ā€œenergy allianceā€ is supplementing international diplomacy with an active regional one, which views economics as a path toward political stability. Gazaā€™s gas is part of the equation.

In theory, at least, shared economic interests lead to shared values and make the costs of losing such mutual economic benefits higher than those of conflict. However, so far, the approach of ā€˜solving the conflictā€™ through economic initiatives has only served to emphasise the severe power asymmetry between Israel and the Palestinians.

As Rawan Odeh in a study for TheĢżInternational Centre for the Study of RadicalisationĢż(ICSR), each proposed economic plan revolves around Israel remaining in control of macroeconomics in Palestine, and a Palestinian dependency on Israel.

According to 2019 United Nations figures, since 2000Ģżthe occupation has cost Palestinians . stated that as of 2020, the siege and frequent Israeli military operations have cost Gaza about $16 billion, equivalent to six times the value of its GDP.

What applies to the overall dynamics of the Palestinian economy under Israelā€™s controlĢżalso applies to Gazaā€™s gas potential. Therefore itā€™s unrealistic to expect that an economic boom in Gaza is possible without lifting the siege and ending Israelā€™s control over the territory.

Experience has shown, above all with the most recent Israeli war, that the restrictions on Palestinian lives have created a volatile situation only conducive to further conflict.

The question for most Palestinians is whether any guarantees actually exist to prevent Gazaā€™s energy sources from simply becoming another means of pressure, if not collective punishment, when fully developed.

Without aĢżpolitical solution, suchĢżguaranteesĢżdon't exist. In the recent conflict with Hamas in Gaza, as in all other previous escalations since Oslo, Israel has closed the crossings, blocked the flow of goods, including medical supplies, and caused severe damage to Gazaā€™s infrastructure - currently estimated at in losses and increasing.

Dr Emad Moussa is a researcher and writer who specialises in the politics and political psychology of Palestine/Israel.

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