Thursday, December 07, 2006

The Eilat-Ashkelon Pipeline

Strange as it may seem, Israeli interests still owe Iran a considerable amount of money for oil supplied to Israel before the fall of the Shah (another motive for a debt-clearing Israeli war on Iran?).  There are a series of secret ongoing arbitrations, which have already resulted in an award in favor of the Iranians, but there are possibly hundreds of millions of dollars left to be awarded.  Needless to say:

“The approach Israel adopted since the start of the discussions on the various issues is one of deliberate foot-dragging. For years Israel even refused to pay the salaries and expenses of the arbitrators. Only recently has the company begun to pay its share of the arbitration. Moreover, Israel raised counter-claims, accused Iran of dispatch responsibility for the situation that was created, and did everything possible to avoid paying Iran a single penny. The only ones benefiting from the situation are the lawyers and the arbitrators, who receive generous salaries for their efforts.”

By the way, in its entire existence, has Israel actually paid, using its own money, for anything?

There is a big plan (my emphasis in red):

“In effect, today there is a network of companies called the Eilat-Ashkelon Pipeline Company Group, whose chairman and president is Major General (res.) Oren Shahor. (He was preceded by Uri Lubrani and Ehud Yatom, for three months.) The subsidiaries are the Eilat-Ashkelon Pipeline Company (EAPC), whose general manager is Yair Waide, and Eilat-Ashkelon Infrastructure Services (EAIS).

EAPC is responsible for operating the pipelines and the terminals in the Eilat and Ashkelon ports, and for the storage container. EAIS is responsible for all the foreign franchise activity of the EAPC group. In other words , for everything not related to the franchise for transporting the oil in the pipeline and storing it.

Through EAIS, EACP has a 20 percent partnership in building the Dorad Energy power plant, which is supposed to be built in Ashkelon within three years. Its next goal is to purchase oil in Russia and the Commonwealth of Independent States, in Central Asia and in the Caucasus, to transport it in tankers to Ashkelon, to channel it through the pipeline to Eilat and from there in tankers to Asia's energy-guzzling markets: China, India, Korea and Japan. So far these efforts have not been successful.

The pipeline was originally used to move oil from Iran around the Arabian peninsula and up through the Red Sea to Eilat, and then across Israel to the Mediterranean port of Ashkelon, where it moved on to Europe.  This route made sense when the Suez Canal was closed, and when Iran was pals with Israel, but makes no sense now.  The reversed route, south to Eilat and then by boat to Asia, only makes sense if there is some huge source of oil available to be piped from Ashkelon (there is an agreement with Russia for some oil to be shipped from the Black Sea to Ashkelon using tankers).  It has been speculated that the source of this oil would be the Baku-Tbilisi-Ceyhan pipeline, and then by a pipeline to be built south to Israel.  The only question is whether this pipeline would be underwater off the coast of Lebanon, or across Lebanon itself.  In fact, the pipeline may have been a motive for the summer attack on Lebanon, and for the subsequent attack Israel is planning (although it is impossible to see how the Israelis could subdue Hezbollah enough to keep a pipeline in one piece).

I’m becoming increasingly bored with the wild theories that these shenanigans have something to do with a great American geopolitical oil strategy against Russian/Chinese interests.  Although it may suit the Bush Administration to have Americans believe there is a strategy, if only to give the increasingly creaky Administration a patina of competence, there is not the slightest evidence of any real plan, and certainly no evidence of even a half-assed execution of such a plan.  It is impossible to comprehend how this Rube Goldberg-ish Israeli plan – l-o-n-g pipeline west (through hostile territory in Turkish Kurdistan and in Georgia), then a completely insecure pipeline south, then across Israel (using the existing pipeline:  the ‘Reverse Flow Project’), and only then onto a boat – could be competitive against direct boat shipments from Iran or Africa, or against direct pipeline shipments from Iran or Russia (through pipelines yet to be built).  The only people who would benefit from the Israeli dream scheme are certain specific Israeli financial interests that have ties to the completely corrupt Israeli government, and, by extension, and through the Lobby, to the completely corrupt American government.