Biden administration kills Israel-to-Europe gas pipeline – analysis

Is the Biden administration truly concerned about climate change, or does it want to prevent Israel from becoming a strategically important supplier of natural gas to Europe?

By Soeren Kern, Gatestone Institute

The Biden administration has abruptly withdrawn American support for the Eastern Mediterranean (EastMed) pipeline, a project aimed at shipping natural gas from Israel to European markets. The White House said the project was antithetical to its “climate goals.”

In reaching its decision, which effectively kills EastMed, the White House appears to have caved to pressure from Turkish President Recep Tayyip Erdoğan, who has vociferously opposed the underwater pipeline because it would bypass Turkey.

Biden’s decision — reportedly coordinated with Turkey but reached without consulting Israel, Greece or Cyprus, the main countries involved in the project — undercuts three of the strongest American allies in the Mediterranean region.

The White House could not have chosen a less opportune moment to announce its decision. With tensions rising between Russia and Ukraine, Europe (which relies on Russia for approximately one-third of its natural gas supplies) is searching for alternative sources of gas to reduce its over-reliance on Moscow.

The Biden administration’s decision also smacks of hypocrisy. The White House claims that it wants the Mediterranean region to transition to “clean energy,” but it recently announced its support for the Russia-backed Nord Stream 2 pipeline, which would double shipments of Russian natural gas to Germany.

EastMed’s cancellation — variously described as a “disastrous decision,” a “strategic mistake” and an act of “appeasement” of Erdoğan — represents a major geopolitical victory for the Turkish strongman. Analysts worry that he will be emboldened to continue escalating tensions in the Aegean and the Eastern Mediterranean in his quest to expand Turkish control over energy supply routes to Europe.

EastMed Pipeline

The EastMed pipeline has been in the works for more than a decade. The Israel-Greece-Cyprus project — joined by Bulgaria, Hungary, North Macedonia, Romania and Serbia — has long been seen as a way to diversify natural gas supplies to Europe.

The 6-billion-euro ($6.8 billion) project envisages the construction of a 1,900-kilometer (1,180-mile) undersea pipeline that would carry up to 20 billion cubic meters of gas annually from Israeli and Cypriot waters to Crete and then on to the Greek mainland. From there, the gas would be transported to Italy and other countries in southeastern Europe.

In January 2020, the leaders of Israel, Greece and Cyprus — with strong support from the Trump administration — signed the EastMed intergovernmental agreement, which aimed at reaching a final investment decision by 2022 and completing the pipeline by 2025. The EastMed project could eventually have supplied up to 10% of Europe’s natural gas needs.

At the time, then U.S. Secretary of State Mike Pompeo said:

“We are free countries, free-market countries, working together and working to create energy infrastructures. This is when better security follows. If we do it properly, we will attract investment and maximize these resources.”

In November 2021, the European Commission (the administrative arm of the European Union) included the EastMed pipeline in its list of so-called Projects of Common Interest (PCI), priority cross-border energy projects aimed at integrating the EU’s energy infrastructure.

On January 9, 2022, in a sharp reversal of previous U.S. policy, the Biden administration announced that it no longer supports EastMed.

Rather than delivering the news in person, as diplomatic protocol would require on an issue of such regional importance, the U.S. State Department quietly emailed the Greek government a so-called non-paper (unofficial diplomatic correspondence that lacks direct attribution) which described the EastMed project as a “primary source of tension” that was “destabilizing” the region by pitting Israel, Greece and Cyprus against Turkey.

The Biden administration appears to have lost its nerve after the Turkish Navy recently harassed the Italian-operated survey ship, Nautical Geo, while it was charting a potential route for EastMed in Greek waters off the coast of Crete. Turkey claimed that Nautical Geo was engaging in “unlawful, aggressive and provocative” infringement of Turkish-claimed waters.

The Turkish government has always insisted that Israeli gas can only be sold to Europe through Turkey. In 2016, Turkish and Israeli officials tried to sign a deal to deliver gas, but Erdoğan’s demand that Israel lift its blockade on the Hamas-run Gaza Strip made it impossible to reach an agreement.

The Greek public broadcaster ERT reported that the Biden administration’s non-paper downplayed Turkey’s objections to the pipeline as the reason for the White House’s decision. Instead, the document specified environmental concerns and a supposed lack of economic and commercial viability.

After the contents of the non-paper generated anger in Greece, the U.S. State Department engaged in damage control and cited climate change as the basis for its decision. It said that it was committed to “promote clean energy technologies” and that priority should be given to interconnecting the electricity grids of countries in the region.

Greek defense analyst Theofrastos Andreopoulos wrote that Biden’s decision was a triumph for Turkey and a defeat for Greece:

“In short, this means that Turkey, which supposedly was falling into disfavor with the Americans, got exactly what it wanted: the cancellation of the pipeline.

“The most important parameter in the non-paper justifying the U.S. position, beyond the economic and commercial elements, points out that ​​this pipeline is a source of tension in the Eastern Mediterranean — clearly taking the position of Turkey!

“That is, the Americans do not want the pipeline because Ankara might ‘get angry.'”

Erdoğan, the Turkish president, hailed Biden’s U-turn as a victory. “If Israeli gas is to be brought to Europe, it can only be done through Turkey,” Erdoğan said. “We can sit down and talk terms.”

Israel vs. Turkey

The demise of the EastMed pipeline project appears to be — in large measure — the handiwork of Amos Hochstein, a political operator in the American Democratic Party and an acolyte of Hillary Clinton, John Kerry and former U.S. President Barack Obama. Hochstein, a confidant of U.S. President Joe Biden, currently serves as Senior Advisor for Energy Security at the U.S. Department of State.

In January 2022, the Turkish state television channel TRT aired a documentary — “The Pipe Dream” (Part 1 and Part 2) — in which Hochstein repeatedly criticized the EastMed pipeline because it excludes Turkey. He also decried the Trump administration’s support of the project:

“I don’t see the need for the United States to come in and support this project. This is a project that probably should not happen because it’s too complicated, too expensive, and too late in the arc of history.

“Today in the Biden administration I would be extremely uncomfortable with the United States supporting this project. Why would we build a fossil fuel pipeline between the East Med and Europe at a time when our entire policy is to support new technology, new developments, and new investments in going green and going cleaner?

“So, by the time this pipeline is built, we will have spent billions of dollars of taxpayer money, probably, on something that is obsolete. And not only obsolete but against our collective interest between the United States and Europe.”

Hochstein’s comments reek of hypocrisy: he has long been a proponent of fossil fuels. In 2017, during a speech to the GE Oil and Gas Annual Meeting, Hochstein praised fossil fuels as creating “so much job growth and economic prosperity in the United States and around the world.” He added that natural gas “will continue to be the backbone of a cleaner energy future.” That same year, Hochstein joined the supervisory board of Naftogaz, the largest state-owned gas and oil company in Ukraine.

In 2019, Hochstein warned against bans on drilling for oil and bans on exporting liquefied natural gas (LNG). In 2020, he described climate change activists as being “emotional.” He added: “I truly believe that natural gas is going to play a far greater role in the [green energy] transition.” Hochstein also disparaged the idea of keeping fossil fuels in the ground:

“We are past the conversation of the last few years where transition was going to be immediate. ‘We’re just keeping it all in the ground and going to go to all renewables.’ That is not going to happen. We’re going to have the oil and gas industry here to stay for several decades, and the renewable industry is going to grow by leaps and bounds. That we all know.”

In July 2021, the Biden administration approved the completion of the Nord Stream 2 pipeline, which would double shipments of Russian natural gas to Germany by transporting the gas under the Baltic Sea.

Biden’s decision abruptly reversed a longstanding bipartisan policy consensus. Both the Obama and Trump administrations opposed Nord Stream 2 on the grounds that, once completed, it would strengthen Russian President Vladimir Putin’s economic and political influence over Europe. Hochstein — known in Europe as “Biden’s guy” — initially opposed Nord Stream 2 but then reversed course and agreed to ensure that the pipeline would be completed.

Biden’s U-turn angered the leaders of many countries in Eastern and Western Europe. They argued that it will effectively give Moscow a stranglehold over European gas supplies and open the continent to Russian blackmail.

Meanwhile, U.S. liquefied natural gas (LNG) exports to Europe have reached record levels. The Biden administration has also held talks with several international energy companies on contingency plans for supplying natural gas to Europe if the conflict between Russia and Ukraine disrupts Russian supplies. The White House suddenly appears to have jettisoned its concerns over “climate goals.”

Hochstein’s claim that EastMed is not commercially viable is also in dispute. A 2019 feasibility study financed by the European Union confirmed that “the EastMed Project is technically feasible, economically viable and commercially competitive.”

Endy Zemenides, Executive Director of the Hellenic American Leadership Council, in a podcast with Kathimerini, a daily political and financial newspaper published in Athens, noted that the Biden administration’s assertion that EastMed’s is not commercially viable is not for the White House to decide:

“If you read the non-paper itself, there are so many conflicting and unnecessary rationales. Given our renewable energy policies, our climate goals, that’s fine, this is the policy we are taking. But then they went on with commercial viability. Two comments on that: It’s not their decision. If somebody steps up and pays for it, that makes it commercially viable. Nobody was asking the U.S. State Department or the USA. Second. They were supposed to give a report to Congress about commercial viability. Frankly, it sounds like they [the Biden administration] wanted to head off any further studies about commercial viability. This was aimed in part at the European Union, which has been funding feasibility studies. So, you read this, and this is truly a case of the cover-up being worse than the crime. This was not handled well at all.”

Richard Goldberg, a member of the U.S. National Security Council during the Trump administration, expressed bafflement at the Biden administration’s decision to withdraw support from EastMed:

“The paper was very surprising and raises questions as to why the administration would want to publicly waffle on such an important project at this time. Was there a quid pro quo for Turkish assistance on the withdrawal from Afghanistan or was this prompted by domestic political interests without considering the consequences for the region? Either way, the non-paper was a strategic mistake.

“The project has been moving forward now for several years and has passed several important milestones on the development path. The decision to call into question its technical feasibility, economic viability and commercial competitiveness now — at this late hour — smells of a political decision, not an economic one.

“If Erdogan perceives the non-paper as some form of appeasement by Washington, he will simply double down on his gunboat diplomacy in the Eastern Mediterranean and play the role of spoiler in the region.”

Meanwhile, NATO is studying the possibility of building a new pipeline across Spain that would transport natural gas from Algeria to France and Germany.

Is the Biden administration truly concerned about climate change, or does it want to prevent Israel from becoming a strategically important supplier of natural gas to Europe?

Turkish Opposition

Turkey has challenged the EastMed project by attempting to expand its claims over gas-rich areas of the Mediterranean Sea.

In November 2019, Turkey and Libya reached a bilateral agreement on maritime boundaries in the southeastern Mediterranean Sea. The deal, signed by Erdoğan and the UN-backed leader of Libya, Fayez al-Sarraj, attempted to redraw existing sea boundaries so that Libya ostensibly can claim exclusive rights over 39,000 square kilometers of maritime waters that belong to Greece.

The bilateral agreement — which established a new Turkey-Libya economic zone that the EastMed pipeline would now have to cross — appeared aimed at giving Turkey more leverage over the project. Referring to the Turkey-Libya deal, Erdoğan said:

“Other international actors cannot conduct exploration activities in the areas marked in the Turkish-Libyan memorandum. Greek Cypriots, Egypt, Greece and Israel cannot establish a natural gas transmission line without Turkey’s consent.”

In December 2019, the Turkish Foreign Ministry summoned Israel’s top diplomat in Ankara to inform him that Israel’s plan to lay down a natural gas pipeline to Europe would require Turkey’s approval.

Turkish Foreign Ministry spokesman Hami Aksoy said that there was no need to build the EastMed pipeline because the Trans-Anatolian Natural Gas Pipeline already exists. “The most economical and secure route to utilize the natural resources in the eastern Mediterranean and deliver them to consumption markets in Europe, including our country, is Turkey,” he said in a statement.

The European Union dismissed the Turkey-Libya deal as inconsistent with international law. The President of the European Council, Charles Michel, said:

“The recent Turkey-Libya Memorandum of Understanding on the delimitation of maritime jurisdictions in the Mediterranean Sea infringes upon the sovereign rights of third States and does not comply with the Law of the Sea and cannot produce any legal consequences for third States.”

Egypt condemned the Turkey-Libya deal as “illegal and not binding or affecting the interests and the rights of any third parties.”

Greek Foreign Minister Nikos Dendias noted:

“Any maritime accord between Libya and Turkey ignores something that is blatantly obvious, which is that between those two countries there is the large geographical landmass of Crete. Consequently, such an attempt borders the absurd.”

Turkish Foreign Minister Mevlüt Çavuşoğlu hinted that Ankara could use its military to prevent gas drilling in waters off Cyprus that it claims as its own. “No one can do this kind of work without our permission,” he said in an interview with the newspaper Habertürk. “We will, of course, prevent any unauthorized work.”

Cyprus has been divided since 1974 when Turkey invaded and occupied the northern third of the island. Turkey, which does not have diplomatic relations with the southern Republic of Cyprus, an EU member, claims that more than 40% of Cyprus’s offshore maritime zone, known as the Exclusive Economic Zone (EEZ), is located on Turkey’s continental shelf and therefore belongs to Ankara or Turkish Cypriots.

Greek Prime Minister Kyriakos Mitsotakis said that the pipeline was of “geostrategic importance” and would contribute to regional peace. Greek Energy Minister Kostis Hatzidakis called it “a project of peace and cooperation” despite “Turkish threats.” Cypriot President Nicos Anastasiades said that his aim was “cooperation and not rivalry in the Middle East.”

Constantinos Filis, Director of the Institute of Global Affairs at the American College of Greece warned that the Biden administration’s decision to withdraw support from EastMed would incentivize Turkish belligerence:

“From Turkey’s perspective, it is very reasonable to believe that it is a diplomatic victory, achieved by using methods that all regional and other players condemned. What is most worrying is that Turkey could understand that what the U.S. is effectively saying is that you can destabilize the area and be blamed for that, but at the end of the day we take it into account and make a decision that satisfies you.”