http://www.zerohedge.com/news/israels-ke....

Two months ago, we warned that while the world had decided to blissfully move on from last year's topic #1, the MENA revolutions, and specifically the massive power vacuum left in their wake, things in the region were far from fixed. Quite the contrary, and as we added back then "it is very likely that the Mediterranean region, flanked on one side by the broke European countries of Greece, Italy, Spain (and implicitly Portugal), and on the other by the unstable powder keg of post-revolutionary Libya and Egypt, will likely become quite active yet again. Only this time, in addition to social and economic upheavals, a religious flavor may also be added to the mix". Yet nobody cared as after a year of daily videos showing Molotov Cocktails dropping like flies, people had simply gotten habituated and needed some other source of excitement. Nobody cared also when a week ago Art Cashin warned that the hidden geopolitcal risk is not Spain but Egypt. Today, Egypt just reminded at least one country why perhaps caution about the instability caused by having a military in charge of the most populous Arabic country and the one boasting "the Canal", should have been heeded after Egypt just announced that it is cutting off its natural gas supplies to Israel, which just so happens relies on Egypt for 40% of its energy needs.

So far,
"Israel pays less for nat gas then Egyptians"
"Mubarak regime was skimming profits"
"Israel has not paid the bill for four months"
"Israel says supply disruption due to the pipeline being blown up 14 times this year is why"

Surely Egypt has enough folks that were alive during those wars during the 60s to let everyone know that you don't **** with the Israelis. If I were a president of a country on their border, I wouldn't.

Quote:

Critics charge that Israel got the gas at below-market prices and that Mubarak cronies skimmed millions of dollars off the proceeds, costing Egypt millions of dollars in lost revenue.

Egyptian militants have blown up the gas pipeline to Israel 14 times since the uprising more than a year ago.

Israel insists it is paying a fair price for the gas.

Mohamed Shoeb, the head of the Egyptian Natural Gas Holding Company, said the decision to cancel the deal was not political.

“This has nothing to do with anything outside of the commercial relations,” Shoeb told The Associated Press.

He said Israel has not paid for its gas in four months. Israeli Foreign Ministry spokesman Yigal Palmor denied that.

http://www.washingtonpost.com/world/midd....

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Surely Egypt has enough folks that were alive during those wars during the 60s to let everyone know that you don't **** with the Israelis

Depending on who's telling the truth (I don't find either country very believable personally), Egypt might have a legitimate gripe and may not be '****ing with Israel'...

The right not to sell is inherent in ownership of a thing.

^^^^ this

Israel has no claim on egypt's gas.

It's not a problem commercially. We'll switch our power plants to run on coal, just like we've done this year already because of instability in the Egyptian supply. Our Leviathan field will come online soon and we'll be back to burning gas. The problem is political. This is enshrined in the Egypt/Israel peace treaty. We gave the Sinai back with assurances that they would sell oil back to us. This was changed to gas recently and now its going to change to nothing.

So does that mean you're going to take back the Sinai?

"from Sinai to the Euphrates"

TY for the history Yonatan. That must also explain the "below market price" claim. It probably is given the history. Maybe Egypt figures the outcome will be different this time if they have another go at it.

While I think it's a poor business decision no peace treaty should depend on one party selling resources to another. I've heard it said that when goods cross borders armies don't, certainly food for thought in this situation.

The inclusion of the oil sales to Israel in the peace treaty with Egypt had to do with the fact that Israel had developed oil wells in the Sinai during the period of 67 to 82. Egypt needed to compensate Israel for the investment made in those wells.

How hard would it be to take back?

Interesting...so if I find oil on my neighbors property, occupy it for a long enough time to build some pumps and then withdraw from it...I can force him to pay for the pumps by selling me his oil at a discounted price?

Sorry...that's sort of what it sounded like, I know it's much more complicated than that. Realistically though, I wasn't aware that the oil sales were a requirement of the peace treaty as I haven't read it...however, if Egypt claims Israel hasn't been paying for the natgas delivery, how would the Egyptians be the ones in breach of the treaty? I'm sure it mentions sales, not 'give away'...

As I said...this is a he said/she said scenario that seems more economic than political.

Mpilar good posts.

"Egypt needed to compensate Israel for the investment made in those wells"

ha, ha, thats a good chutzpe.

You do realize that we didn't have to give the Sinai back, right?

As far as payment for the natgas goes - who the hell knows what the truth is. What I do know is that the pipeline has been blown up 13 times since Mubarak was overthrown. I find this kind of compelling.

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You do realize that we didn't have to give the Sinai back, right?

Yeah...that says a lot...

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What I do know is that the pipeline has been blown up 13 times since Mubarak was overthrown. I find this kind of compelling.

That's true...and I might be reluctant to pay for something when it only arrives every once in a while...like I said, there's two sides to this story, and I don't believe either side to be very honest, so this is going to be a battle of propaganda...at least initially.

I have to ask, what earthly business did Israel have drilling on land that they had taken by force? Aside from that they should have had the foresight to predict that at some point they would be giving said land back. I didn't know about any of these matters until I read the article. If I were Egyptian I'd probably want to reexamine the matter too.

Gollum. That was ridiculous of you to say. If you take land by force its yours to do as you wish. Land isnt taken just for the fun of it. Its taken for a reason and usually it is for resources. I have no problem with israel taking sinai back. Egypt is a joke now and if israel is going to actually use the land then they should have it. Im sick of all the israel bashing. And no im not of jewish decent. Not even religious in any way.

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Interesting...so if I find oil on my neighbors property, occupy it for a long enough time to build some pumps and then withdraw from it...I can force him to pay for the pumps by selling me his oil at a discounted price?

No, it is more like your neighbor making a treaty with all of your surrounding neighbors against you, threatening invasion of your house, launching terrorist attacks against you, massing fortifications and armed troops all around your property, and blockading your driveway until you had enough and decided to go outside and kick all their asses. Once the ass kicking was done you decide to keep his backyard as your own and build oil wells on it. Then later you decide out of the kindness of your heart to give the backyard to him in exchange for some of the oil being SOLD to you.

If thats the case why are we drilling in Texas ...it's Mexico's

To those complaining about Israel having a clause in the treaty to have Egypt sell oil back to Israel, consider this: There is an important aspect to this clause that deals with trying to establish a true normalized relationship with Egypt. Commerce is a very effective way to normalize relationships between countries. Unfortunately, this did not help, as we have only had a cold peace for the entire time of this peace treaty. But I think it was wise to have it in the treaty to try anyways.

Yonatan, your version of commerce stinks.

The absolute lack of logic, dismissal of history and present reality and outright hatred seems almost supernatural.

Yonatan wrote..

To those complaining about Israel having a clause in the treaty to have Egypt sell oil back to Israel, consider this: There is an important aspect to this clause that deals with trying to establish a true normalized relationship with Egypt. Commerce is a very effective way to normalize relationships between countries. Unfortunately, this did not help, as we have only had a cold peace for the entire time of this peace treaty.

That makes as much sense as winning a fistfight with a woman and then demanding that she date you as a condition of letting her go after she's lost.