Jordan announced this week it was discussing with Baghdad the development of natural gas fields along its northern border with Iraq. The pipeline system in the Sinai Peninsula carrying natural gas from Egypt to its Middle East customers was the target of nearly a dozen attacks since Hosni Mubarak was ousted during last year's revolution. Authorities from Mubarak's administration were accused of getting rich off of shady gas contracts with Israel. Though Mubarak's cronies are out of the picture, the military leadership in Cairo hasn't exactly been able to keep things under control in Sinai, leaving Jordan and other import dependent countries at the short end of the natural gas stick.
Jordan relies on imports to meet as much as 80 percent of its energy demands and the attacks on the pipeline system from Egypt prompted authorities in Amman to start calling on its neighbors for help. This week, British energy giant BP said it was planning to start exploratory drilling in the Risha natural gas field near Iraq, where there could be more than 300 million cubic feet of reserves. Jordan has agreements with Iraq to develop the field, but it's not like Iraq is the regional model for stability and swift political action. Amman could look to the natural gas fields off the Israeli coast in the Mediterranean Sea, though Hezbollah said portions of those offshore reserves are hands off because they're in its turf.
Amman said recently it was close to tapping into border gas fields as well as securing deliveries of liquefied natural gas from Qatar, though Jordanian officials conceded some of those developments could be at least two years away. By that time, the entire Middle East political lay-of-the-land will be almost completely different than it is today. As was the case with Libyan oil last year, contracts tend to be honored, but there's nothing guaranteed.
On Friday, clashes erupted in Egypt following a deadly riot on the football pitch in Port Said. Kuwaiti opposition groups, meanwhile, were expected to dominate elections that followed a violent campaign for a new parliament. Hamas leader Khaled Meshaa, for his part, arrived in Amman to the excitement of Jordanian Islamists frustrated they were left out of the Arab Spring.
Energy and conflict tend to go hand-in. During the Bush administration, when Egyptians were rioting over bread instead of political reform, Condi Rice quipped about the "birth pangs of a new Middle East," expressing her hope that the region would not slip back "to the old Middle East." Like the one where Washington stood by Mubarak as an ally? In any event, now that the Middle East is clearly in its last trimester, the political dynamics of the Arab Spring may give rise to new leaders with new regional alliances. Does this mean entrenched, and relatively stable, regimes like the Jordanian monarchy remain isolated from the flames of dissent, or will the new dynamic leave them shivering in the cold.
By. Daniel J. Graeber of Oilprice.com