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Egypt gas exports to Israel
The biggest impact of the 2011 uprising is on Egypt's natural gas export to Israel. In 1979, Egypt became the first Arab country to sign a peace treaty with Israel. Since then, the Egyptian-Israeli relationship has been through several ups and downs, but the two sides have managed to maintain peace. This peace, however, is often described as "cold." Generally, Egyptians are not enthusiastic about having close cultural and economic ties with the Israelis.
Despite this lack of enthusiasm, the Egyptian government signed a 15-year agreement with Israel in 2005. According to this pact, Egypt agreed to supply 60 bcf/year of gas to Israel via an undersea pipeline from the north Egyptian town of El-Arish to the southern Israeli coastal city of Ashkelon beginning in 2008. The agreement was executed by the East Mediterranean Gas Co., a consortium of the Egyptian General Petroleum Corp., Merhav of Israel, and Egyptian businessman Hussein Salem.
With the toppling of the Mubarak regime, the pipeline has been attacked several times and supplies were interrupted.
Former energy officials, including Minister Sameh Fahmy, are under investigation on charges related to the gas deal with Israel. The public prosecutor accuses these former officials of "squandering public funds" by permitting East Mediterranean Gas to trade with Israel at prices below global market rates. At least four factors contributed to this public backlash against supplying gas to Israel.
First, despite the peace treaty and close relations between the Mubarak regime and Israel, many Egyptians still see Israel as an enemy that occupies Arab and Muslim land. Exporting gas to Israel has always been unpopular, and activists tried to stop these shipments through the courts even before the fall of President Mubarak.
Second, domestic consumption of gas is very high in Egypt due to heavy government subsidies. The combination of a large population and generous subsidies means that a small and shrinking volume of gas is available for export.
Third, though there is no global benchmark price for natural gas, comparable deals in the region show that Turkey, Greece, and Italy were paying double the price Israel was paying for imported gas.8 Finally, the Egyptian government's control over Sinai has never been strong, and the bedouins and other groups who resent or oppose the government in Cairo see the pipeline as an easy target.
Libya
The impact of the Arab Spring on energy sector in Libya was much bigger and multidimensional than in neighboring Egypt. The process of toppling President Mubarak was less violent and lasted only for a few weeks.
On the other hand, Libya witnessed intense fighting between pro and anti Gaddafi forces that lasted for several months. Foreign military assistance and the NATO aerial campaign played a large role in defeating Gaddafi's loyalists.
Not surprisingly, given the intensity and speed of the process that led to regime change, the toppling of Mubarak was done without losing a single barrel of oil. Indeed, as discussed above, the major impact is on natural gas supplies to Israel.
In Libya, on the other hand, the oil industry was virtually paralyzed and some oil fields, refineries, and terminals were attacked.
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