How Jordan's gas deal with Israel derailed its burgeoning green energy sector

The 2015 Paris Agreement saw countries agree to cut greenhouse gas emissions to keep global warming below the critical 2C mark.

While Jordan didn't pledge reductions due to being a "Non-Annex I" (developing) country, it signed the agreement and released a report declaring that a "national strategy and action plan for transitioning towards the green economy in Jordan" was being developed.

However, just one year later, the Jordanian government signed a deal with Israel which has likely jeopardised the country's ability to make that transition.

"In 2016, Jordan's government signed the secretive deal far from parliamentary or public scrutiny, agreeing that Jordan would pay Israel $10 bn for around 45bn cubic metres of gas over 15 years"

"The public was very angry, so was the parliament, the engineers and others, and they all raised the flag against the deal, on the basis that the gas is stolen from the Palestinians, and the fact that dependency in energy on Israel is very dangerous, particularly as Israel is uprooting the Palestinians […] and oppressing them," civil engineer and specialist in environmental sustainability Dr Ayoub Abu Dayyeh told The New Arab.

The Israel-Jordan gas deal has caused an ongoing outcry, not only due to its possible violation of Jordan's constitution and incompatibility with climate concerns and Jordanian sovereignty, but also because it is seen as providing funding for Israel's abuses of Palestinian human rights.

The Israel-Jordan gas deal

In 2016, Jordan's government signed the secretive deal far from parliamentary or public scrutiny, agreeing that Jordan would pay Israel $10 billion for around 45 billion cubic metres of gas over 15 years.

As knowledge of the deal trickled out, outraged Jordanians participated in weekly demonstrations, which only subsided with the Covid-19-induced lockdown in 2020 (the year Israeli gas started flowing).

Jordanian lawyers filed over 200 lawsuits against the deal; MPs threatened a motion of no-confidence against the government; and Jordanian companies refused to work on construction for the pipeline. Despite the pressure, the government, headed by King Abdullah II, refused to cancel the deal.

Background to the deal

Israel discovered the Leviathan gas field 130km off the coast of Haifa, in 2010. The deal, alongside one between Israel and Egypt, allowed Israel to fund development and gas export facilities for the Leviathan field, and consider an energy-independent future.

US-based Noble Energy (now part of Chevron) and Delek Group (a conglomerate of Israeli gas and oil companies) received the main drilling contracts after sealing the deal with the National Electric Power Company of Jordan (NEPCO), a 100% government-owned firm that monopolises the generation of electrical power in Jordan.

Jordan was under "tremendous" US pressure since 2011 to sign this deal, says Dr Hisham Bustani, a Jordanian author, and organiser of the Jordanian National Campaign Against the Gas Agreement with the Zionist Entity (Israel). In Bustani's opinion, the deal's lack of incentives for Jordan, alongside the billions it will cost the taxpayer and the secrecy around it, also raised the spectre of corruption.

Why was the US so keen?

Israel's security is a keystone of US foreign policy in the region. Moreover, US aid to both Egypt and Jordan has long been conditioned on Israeli interests. As the US-government agency the Congressional Research Service puts it, this aid is "designed to encourage continued Israeli-Arab cooperation on security issues." That US-based Noble Energy received a 39.66% stake in the field's development could also have played a role.

Aside from this, political analyst Eva J. Koulouriotis explains that the US viewpoint under Obama hinged on two points. One was preventing Jordan's debilitated economy plunging the country into internal conflict.

The second was "normalisation with Israel. Jordan had already signed deals of political character with Israel […]. However, this […] did not open the door for Israel to merge with its Arab surroundings. So, Washington's view was to exploit Jordan's economic needs to push it towards economic normalisation".

Dr Neil Quilliam from Chatham House cautions against seeing the deal as forced on Jordan however: "The US was instrumental in brokering the deal and employing energy diplomacy to get both sides to the table, but the decision was made and owned by both countries, primarily driven by harsh economics", he says.

However, Bustani believes the deal showed the “Jordanian government's preference for supporting the Israeli occupation's economy with Jordanian taxpayer money over developing the Jordanian economy, which is underdeveloped and crippled by loans and unemployment".

"Washington's view was to exploit Jordan's economic needs to push it towards economic normalisation [with Israel]"

Plentiful alternatives

Besides, Jordan didn't need Israeli gas, explained Bustani. Jordan has gas, oil shale, abundant sunshine, and wind – all with vast potential, and the funds going to Israel could have developed Jordan's own energy sources and economy. Jordan also has a liquefied natural gas (LNG) terminal in Aqaba, operating since 2015 with Shell liquid gas imported from Qatar.

According to the Director General of NEPCO Abdelfattah Daradakeh in 2015, this was fully meeting Jordan's electricity needs. Moreover, according to Abu Dayyeh, BP had conducted oil and gas exploration in Jordan and announced "very positive results", before terminating their contract and withdrawing in January 2014.

He says Jordan now has reached a point "where the potential production of electricity […] is double the demand, and the government is wondering how to make use of it".

How has the deal impacted Jordan's renewable energy sector?

Dr Feras Batarseh is a mechanical engineer and executive manager of Wathba Investment Company in Jordan, an engineering solutions provider of Photovoltaic (PV) Solar Systems. The New Arab asked if the gas deal had negatively impacted the development of Jordan's renewable energy sector.

"Without any hesitation it's yes," says Batarseh, adding that Jordan has two types of renewable energies: solar photovoltaic systems and wind turbines. Jordan has seen growing electricity demand which should have been met by more renewable energy projects, he says, but instead, it’s being covered by utilising more gas.

This has stopped the government from investing in Jordan's electricity grid to upgrade it into a smart grid, for example, allowing renewables to enter it: "Since we have this source of gas, the government is not really looking at this type of investment." 

Jordan's government passed a renewable energy law in 2012, when technology in the sector was undeveloped, and aspiration relatively low. Batarseh says the government aimed to generate 20 percent of Jordan's energy needs with renewables by 2020 – but in the event, 26 percent of Jordan's electricity was covered in 2021.

However, he says, because of the gas deal the incentive to further develop the sector is absent, although technological progress means that solar panels today, even if restricted to where they're already installed, could produce up to 20-30% more of Jordan's electricity. 

"The gas deal, it changed [the government's] whole plans," says Batarseh, explaining that instead of investing into making Jordan a regional hub for renewable energy generation, the country has been left exposed to market energy prices. It has limited Jordan's ability to be competitive in the electricity export market by producing cheap electricity – with which it could also have supported struggling local industries.

Additionally, Jordan is shackling its own aspirations in the long term: "It takes time to develop your infrastructure […] to utilise more renewable energy in the long run, so we are losing this opportunity to be prepared for the future, to be […] a tangible player in the electricity export market from renewable energy," he says.

Israel gas deal: Not a job creator

Abu Dayyeh believes if the money invested in the deal had gone into renewable energy, it "would have produced jobs, badly needed at present." Batarseh agrees: "The flow of gas is not creating any jobs, its not affecting the local communities."

He contrasts the situation with the positive impact had Jordan's government prioritised renewables: "It is well known that renewable energy is a job creator. During the process of construction […] operation and maintenance, it has […] a positive impact on job creation and it has a lot of local added value."

He says jobs have been lost across the renewable energy sector, with low hire rates and even layoffs. He particularly worries about graduates who have studied renewable energy technologies – they will be entering a "sector which has no employment power or job creation power". This could see young, skilled people move abroad, losing Jordan its home-grown talent.

"The flow of gas is not creating any jobs, its not affecting the local communities"

Natural gas: A greener fossil fuel?

Abu Dayyeh remarks that one of the few benefits was that Jordan stopped "using heavy fuel which is highly pollutant".

However, while the European Commission has categorised natural gas a "transition fuel", promoting its use en route to decarbonisation, Carlos Bravo from OceanCare, an international marine conservation organisation which holds special consultative status with the UN, disagrees.

"Although LNG is presented by the hydrocarbon industry as […] less harmful to the climate than conventional fossil fuels, this is a fallacy," he told The New Arab. Bravo explains that methane leakage into the atmosphere during natural gas production makes "natural gas/LNG more damaging in climate terms than even today's liquid fossil fuels".

He added that "Jordan is a country whose energy consumption could be fully satisfied with renewable energies" due to its great potential for clean energy generation. What is absent is "sufficient political will". More frustratingly for cash-strapped Jordan, solar and wind energy are currently the cheapest types of energy to produce, said Bravo.

At the expense of people and the planet

Jordan entered into a 15-year gas deal at the expense of renewable energy sector investment, much-needed jobs for Jordanians, and the wishes of the Jordanian people due to their view that the deal supports Israel's crimes against Palestinians.

The Israel-Jordan gas deal also raises other issues of critical importance, including the priority hydrocarbon companies and geopolitics have over citizens' (even national) interests and the planet.

These are major obstacles to the global transition away from fossil fuels and towards more cost-effective and clean options for energy generation.

Rose Chacko has been The New Arab's translator since May 2021. She holds an MSc in Advanced Arabic and a BA in Arabic and Persian. She lived in the West Bank, Palestine for a year during her undergraduate studies.

Her areas of interest are history, politics, culture and literature with a focus on the Middle East. She is currently based in London.