Powering Peace: The Case for Growing Gaza’s Energy Sector

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The Gaza Strip has a major energy crisis. Estimates suggest that Gaza has a power shortage of roughly 49%, indicating that almost half of the day is spent without reliable electricity. Clearly, this tangible reality does little to help the cause of the Israeli’s but rather incites radicalization.

I want to begin this post by making something very clear: this is merely a look at simple ways that the Palestinian economy can be boosted through its energy sector. I recognize that the current military conflict in the Gaza is an intensely vitriolic subject. You only need to turn to twitter or go on Facebook to see the depth of emotion that is generated on both sides. The sample below is hardly representative, but it does show the polarization that anything related to the Israel/Palestine conflict solicits.

To that end, I don’t want to comment on the specific actions of one side or another, the one point I do want to make clear is that I believe a positive step that can be taken towards peace is to allow the development of the Palestinian economy.  Yet, economic development remains virtually impossible given a strict embargo on the Gaza strip enforced by Israel since 2006.  This draconian embargo prevents Gaza from importing basic medical necessities and growing the economy in any way.

The results of this blockade are so ‘effective’ that the United Nations has deemed Gaza to be virtually ‘uninhabitable.’  Ostensibly, the purpose of the blockade is to prevent Hamas from acquiring new weapons, yet the collateral damage is intense.  Although I can’t entirely judge the efficiency of the blockade at curbing violence, there appears to be no singular link between the blockade and rocket strikes from Gaza, despite the fact that they have been significantly reduced in the last few years.

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The point of this paper, however, is not to merely criticize the blockade of Gaza but rather to examine how growing Palestine’s economy can lead to a more lasting peace. If Hamas is indeed the root of the problem, surely empowering Palestinians and giving them control over their livelihoods would reduce the temptation of turning towards violence and radicalization.

Let’s be honest, there have been mistakes and terrible acts committed by both the Palestinians and the Israelis. That said, pivoting the popular opinion of Gaza away from extremism can hardly be done through the kind of overwhelming force that Israel is currently displaying. I highly doubt the people of Gaza are accepting the Israeli narrative that they are being used as human shields. It’s pretty hard to conceive that anyone ISN’T a human shield in one way or another when you have 1.8 million people living in roughly 360 sq km. This makes the Gaza Strip one of the most densely populated areas on earth!

Instead of forcibly blaming Hamas for Gaza’s problems, perhaps Israel could prove to be a viable alternative that assists with economic development. Under the current situation, Israel uses its power to isolate the Gaza Strip and ration resources and products. Rather than having this one-sided relationship, building partnerships between Israel and Palestine could go a long way to minimizing radical voices. One area in particular where cooperation rather than coercion is most necessary is energy.

Currently, Gaza has a tremendous shortage of electricity. A steady flow of power is usually only assured for 8-12 hours a day. The demand for electricity in Gaza stands today at roughly 410 MW per year, yet the domestic production coupled with imports from Israel and Egypt account for barely 210 MW annually. This figure is projected to increase to 855 MW annually by 2020. Such frequent blackouts constitute the most evident sign of Israel’s superiority, and surely incite ill will from the Palestinian population.

Indeed, the Gaza Strip’s generation capacity is limited to one power plant in dire need of reparation (yet unable to acquire the necessary parts due to the embargo). This facility is supposed to yield 140 MW, yet it is currently only able to produce around 80 due to unnecessarily high fuel costs when imported from Israel. Previously, Gaza had been able to acquire fuel from Egypt, but the supply lines were closed by Israel. The remaining electricity is therefore imported from Israel at a cost far above market value. The Israeli’s argue, not incorrectly, that Gaza has often failed to pay their electricity bills, thus meriting a reduced amount of electricity.

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The problem of unpaid electricity bills is exacerbated by the dire state of Gaza’s electricity grid. Ravaged by war, outdated, and unable to undergo repairs, the grid system naturally leads to stealing and billing difficulties. It has been estimated that updating the grid would cost upwards of $30 million, and obviously good will on behalf of Israel.

Therefore, the energy crisis facing Gaza can be summarized into two main elements: 1. power generation issues created by high fuel costs and poor infrastructure and 2. power supply and accountability issues generated by aging power grids.

Looking first at generation capacity, Gaza’s power plant must be permitted to operate at full capacity. To do so, it needs access to cheap and reliable hydrocarbons. One way of doing so is to allow the import of fuels from other countries. Qatar has notably offered to supply hydrocarbons to Gaza but has so far been unable to do so due to the blockade and other security concerns. If Israel were to overturn this decision and permit foreign states to import electricity to Gaza, even if Israel inspects all cargo, this would go a long way to alleviate the electricity shortages.

A second option to increase the flow of hydrocarbons is to give Palestinians access to the large natural gas deposits in the Gaza marine. Prior attempts to extract this natural gas have been stymied by the conflict between Israel and Gaza stretching back to 2006. Furthermore, the lack of cohesion between Hamas in the Gaza Strip and Fatah in the West Bank makes ownership over the resources unclear situation. Lastly, to fully tap the resources present in Gaza Marine would cost an estimated $1 billion, yet the potential revenue generated would far exceed this figure. Ultimately, for Gaza Marine to become a realistic option, Gaza must search for outside partners willing to take the financial risk to invest in Gaza. Israel can make important, yet rather inexpensive, steps by permitting such investments to take place.

Updating the power grid to ensure proper payment and accountability is also in need of investors. Again, the underlying problem rests in the dubious security situation which often serves as a deterrent (not to mention issues related to the blockade of Gaza). Perhaps Israeli willingness to grow the Palestinian economy could prove to be a catharsis for Palestinian suffering.

Easing Gaza’s access to affordable and reliable energy is the first block needed to construct a strong economy. Policy makers appear to have echoed this idea. Indeed, both US Secretary of State John Kerry and Quartet Representative Tony Blair have launched initiatives to help grow the Palestinian economy from a private sector standpoint. The impacts of such a policy would surely permeate throughout the region.

“Resolving the Israeli-Palestinian question is both urgent and vital.  My belief is that facilitating change on the ground is key to providing the most favorable context for political negotiations to succeed…I am working to promote economic growth and institutional development to improve the lives of the Palestinians in the West Bank and Gaza and provide security for both Israelis and Palestinians.” – Tony Blair Quartet Representative

Starting with Palestine’s access to energy and infrastructure is the most tangible way to show a willingness to answer the plight of the people of Palestine. Having an uninterrupted stream of affordable electricity enables people to focus on other developmental aspects and reduces (albeit not eliminate) the caricature of Israel as a ubiquitous enemy.

Irrespective of the current conflict in Gaza, every hour without electricity, every shortage of vital medication, and every example of run-down infrastructure pushes the people of Gaza closer and closer to extremism. Yet, amidst this humanitarian crisis, Israel maintains a hard line that does little to change the hearts of the Palestinian people.

There will always be hatred, animosity, and acrimony on both sides. Even if peace does indeed come one day, there will always be those who believe in the destruction of Israel. Similarly, certain Israeli’s will always view themselves as the rightful owners of the entirety of the holy land. So instead of bridging ideological divides that frankly seem insurmountable, perhaps it would be best to focus on the commonalities between the people of Israel and the people of Palestine.

The most basic common denominator between Israeli and Palestinian’s is their desire to live a prosperous life. Yet when Palestinians are deprived of the most basic needs while Israel enjoys all the modern comforts, it is evident that hatred, anger, and yes-even radicalization will spread.   Israel’s strategy must change to accept this basic fact. Furthermore, the actions of a minority of Palestinians should not deprive the entirety of Gaza. Granting Palestinians the key to their own fate will hardly constitute a security threat for Israel.

Even so, as the hours without power in Gaza continue to grow, so to does the resentment and hatred that some so quickly pin on a radical minority.

For more on the statistic:

http://blair.3cdn.net/a0302ab9e588825b29_1bm6yhjay.pdf

Other relevant links:

http://www.vox.com/2014/7/18/5915549/gaza-israel-map-blockade

http://palthink.org/en/wp-content/uploads/2014/01/Policy-Paper-Electricity-Crisis-in-Gaza.pdf

http://www.washingtoninstitute.org/uploads/Documents/opeds/Henderson20140301-GermanMarshallFund.pdf