The geopolitics of gas and Dunlop's idea

The geopolitics of gas and Dunlop's idea

Geminello Alvi | Columnist and writer
Major global economic opportunities risk being affected by the political crisis in the area that does not appear to be on its way to being resolved. So here is a good reason to remember the wisdom of Daniel Nicol Dunlop

The discovery of the Zohr gas field in Egyptian waters is the largest ever made in the Mediterranean, and it follows the already significant discoveries of the gas fields of Tamar and Leviathan in Israeli waters and Aphrodite in Cypriot waters. In order to complete this scenario of energy change, and therefore of economic change, some problematic issues must be overcome. The geopolitical situation in the region, complicated by Egyptian instability after the Arab Spring, but also by the climate of uncertainty in Israel, which has led to the delay of crucial investments, and by Cypriot delusions with regard to economic difficulty, has created challenges, as have downward revisions of the first estimates. The complications of the wars in Syria and Iraq, with attendant terrorism and chaos, unfortunately complete the picture, and justify pessimism. However, a purely economic calculation confirms the great advantages of the discovery, especially for Egypt. Zohr, with a 20 year potential production plateau at 20-30 bcm per year, would be a comfort to a nation that has experienced increasing difficulty in meeting its domestic demand. It may also be only the first of a series of discoveries, such that in 2020, Egypt could once again become an exporting country.

A great opportunity for energy integration

Moreover, the gas field is located only 90 kilometers away from Aphrodite, which, in turn, is even closer to Leviathan, which would enable substantial economies in the coordinated exploitation of the area. This is also a significant opportunity for Israel and Cyprus, but the massive investments to be made require a politically stable situation, which the area currently does not have. However, regardless of whether it is decided to implement only the productions necessary to cover Egypt’s domestic demand or to create a new gas hub in the Eastern Mediterranean based on existing infrastructure, it is precisely the geopolitical climate that complicates every decision. The discovery could also be an opportunity for Europe, whose growing gas needs are complicated by reduced production from the expiration of long-term agreements with Norway and Russia. Yet the truth remains: major global economic opportunities risk becoming affected by a political crisis in the area that does not appear to be on the way to being resolved. There is good reason to remember the wisdom of Daniel Nicol Dunlop, who was born in Scotland in 1868 and died in London in 1935. Dunlop was a founder and then director of the British Electrical and Allied Manufacturers’ Association (BEAMA) and also Chairman, in the years between the 2 wars, of the executive council of the World Power Conference, the predecessor of the World Energy Council. Without a doubt one of the most influential figures in the organization of the global electricity industry, Dunlop was also a friend to William Butler Yeats and cited for his theosophical passions in Joyce’s Ulysses (he had met Joyce before working at Westinghouse).

Dunlop and the division between politics and the economy

A friend of transcendentalist philosopher Rudolf Steiner, with whom Dunlop shared, among other things, the idea that it was increasingly necessary to take a different approach to the economy than politics. This led him to his most outrageous idea: the creation of supranational institutions, separate from state politics, to which the administration of energy sources would be delegated. This was certainly a bold proposal, and yet it now seems to be what is necessary in the Eastern Mediterranean. In order to take the best interests of Egypt, Israel and Europe, of which Cyprus is a part, the economic administration of the major gas fields would have to be removed from politics. The European Coal and Steel Community offers a model of a kind; it contributed in no small amount to overcoming the disasters and hatred left behind by the war in Europe. Perhaps it would be necessary to have the temerity to reconsider Dunlop’s idea, to consider a lasting common criterion for managing the gas fields in the area. Would overriding politics with purely economic institutions offer a way forward with the issue of water, which embitters relations between Turkey, Syria, and Iraq in the apocalyptic scenario of that area? Perhaps it would not hurt to remember D.N. Dunlop.