Egypt to demand extra retroactive payments for natural gas sold to Israel?
One of the reasons that Egypt is so anxious to dissolve its natural gas deal with Israel is that under the terms of the agreement between the two countries, Israel gets to purchase natural gas at below-market prices. This is a result of the fact that the Egyptian natural gas comes from areas that were ceded by Israel to Egypt under the peace treaty between the two countries.Now, Egypt's new foreign minister, Nabil Elaraby, wants to demand that Israel pay the difference between the sale price and the market price for all gas purchased until now, claiming that the Camp David accords did not entitle Israel to such a sweetheart deal.
According to the minister, clause No. 8 in the Israel-Egypt peace agreement allows the parties to appoint a joint committee to discuss settling financial disputes, "and we will demand from Israel the price differences of the gas exported to Israel during the previous regime."As my law school contracts professor used to say, "a deal's a deal, except under 2-302." (A clause of the Uniform Commercial Code that allowed one side to cancel a contract because it's unconscionable - in light of the resources that Israel gave to Egypt in return for a piece of paper, I would not call it unconscionable).
Al-Arabi noted that the Camp David Accords do not include a clause on selling gas and oil to Israel for a reduced price, and that those who interpreted it that way were "wrong" or "wanted to interpret it that way".
Al-Arabi, who is considered hostile towards Israel, is the first official to raise the possibility that Egypt would demand that Israel pay for the gas retroactively. These comments contradict remarks made by the new oil minister, who said Egypt wanted to enter negotiations with Israel on the possibility of raising the gas prices from now on.
The odds of Israel paying that extra money are quite long. Especially in light of the fact that we will have our own natural gas supply online by 2013, I would bet on some stalling tactics (making like we'll pay and then not paying) followed by a break when our own natural gas comes online.
Labels: Egyptian-Israeli peace treaty, Hosni Mubarak, Nabil Elaraby, natural gas
posted by Carl in Jerusalem @ 12:39 PM
2 Comments:
Yup.
In other words, if Egypt doesn't want to sell its natural gas to Israel at the agreed-upon price, that's its affair.
But if it wants to reopen the peace treaty's provisions, Israel has every right to bring up demands of its own.
If Nabil Elaraby thinks about it, he really wouldn't want to go there.
I can only say two things:
1. Drill baby drill, and
2. It is totally beyond me, with the high tech prowess of Israel and the lefty California, why both places have to organized systems to pull unlimited amounts of water out of the sea and desalinate and disinfect them. The coastal areas of CA, for example, endlessly drain the inland water from the entire U.S. west to wash their cars in their driveways. The big coastal cities of Israel, likewise, depend on inland water sources, which put them at the mercy of the neighbors. I know Better Life wants plug in cars, but I would love them to focus instead just for a while on getting the desal water supplies organized.
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