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From: Biniam Tekle (biniamt@dehai.org)
Date: Thu Aug 26 2010 - 14:55:51 EDT
Energy and Security Issues in the Red Sea Transforming as the Age of
Gas Begins in Earnest
Written by Gregory R. Copley
Thursday, 26 August 2010 13:56
Major new energy issues are about to transform still further the
strategic balance of the Horn of Africa and the Red Sea, with
foreseeable consequences for the global energy market over the coming
decade. Soon-to-be-evident new wealth in the Red Sea/Horn of Africa
region will transform the intensity of conflict there, which in turn
will affect not only the region, but the world’s most important
trading route: the Red Sea/Suez sea line of communication (SLOC).
Much of the anticipated change is developing around the flood of new
discoveries and exploitation of natural gas fields in the Indian Ocean
region, particularly extending through Ethiopia, Egypt, and other
countries of the Red Sea region. Apart from the impending influx of
new energy wealth into the region, facilitating new levels of
confidence and capability in the security environment, the boom of the
“Gas Age” also seems set to promise — within a decade — an oversupply
of gas to the world market, almost certainly precipitating a collapse
in price for gas and petroleum.1
The strategic balance in the Horn of Africa, and reaching through the
Red Sea to Egypt and the Mediterranean, is changing rapidly — and in
many respects is becoming more unstable — as political, geopolitical,
economic, and ideological issues begin to clash. The war over the
reunification of Somalia, incorporating both the old Italian
Somaliland (now Somalia) and the Republic of Somaliland, has now
become indisputable, and nominally-moderate Egypt has come down firmly
on the side of reunifying the area under the clear dominance of an
Islamist-dominated but anomic — essentially lawless — Somalia.
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Egypt — with its unstable political transition underway at the same
time as the discovery of increasing quantities of natural gas — has
been covertly supporting a wide range of radical actions along the Red
Sea littoral and in the Horn with the sole goal of ensuring that
Ethiopia does not use its traditional heartland strength to be able to
revive its dominance of the Red Sea and the sea lane which links to
Egypt’s Suez Canal.
In the process, however, the Egyptian Government has given support to
the same radical jihadist groups which fundamentally oppose Egyptian
secular governance, which support Iranian expansion into the Red
Sea/Africa framework, and which have transformed a strategically
benign Ethiopia into one which must now accept confrontation with
Egypt and its regional allies.
This situation has been compounded by the recent Islamist/pan-Somalist
success in winning power in Somaliland, but of equal importance has
been the first quiet stage of the transformation of Ethiopia into an
energy exporting power. Ethiopia’s natural gas reserves which the US
Energy Information Agency (EIA) in 2009 rated as zero and in early
2010 at one-trillion cubic feet (TCF), now have been demonstrated to
be significant, and gas exports will begin within five years.
Malaysian State-owned oil and gas company Petroliam Nasional Bhd
(Petronas) has now proven as much as four TCF of gas in its reserves
in the Ogaden basin region of Ethiopia. Petronas is one of about 85
companies which have oil and gas exploration licenses in Ethiopia, but
the Malaysian company is the first to begin its production phase,
which should see a gas treatment plant and a gas pipeline from the
Ogaden to Djibouti (at a total cost of $1.9-billion) on-line within
five years. Estimated Ethiopian gas reserves, as of 2010 (not “proven
reserves”), were reported at 12.46 TCF, but this figure was likely to
be expanded frequently as new discoveries are reported.
Significantly, although the externally-supported and -armed Ogaden
National Liberation Front (ONLF) has continued to sustain sporadic
armed contact with Ethiopian security forces into August 2010, the
second week of August saw the senior ONLF leadership in Washington,
DC, meeting secretly (under US sponsorship) with representatives of
the Ethiopian Government. Just days before that, representatives of
the Oromo Liberation Front (OLF) also met in Washington, DC, with
senior Ethiopian Government officials. Both the OLF and the ONLF have
been receiving extensive logistical support, weapons, training, and
funding from Eritrea, supported directly or indirectly by both Egypt
and Iran.
It is now apparent to both the ONLF and OLF that their foreign patrons
have been waging a losing battle against the Ethiopian Government, and
that, with the growing strength and wealth of the Ethiopian
Government, now is the time to consider coming to terms with Addis
Ababa.
Any thought that the pan-Somalists, who have recently scored a major
success in winning the Presidency of the Republic of Somaliland, can
effectively make headway in the ethnically-Somali Ogaden region of
Ethiopia have been quashed by the effective military action by the
Ethiopian Defense Force (EDF) in its combat contacts with the
pan-Somalists. The EDF units involved were almost entirely ethnically
Somali (officers and men), and yet acted decisively to quash the
Somalian forces fighting them.
Fighting around July 12, 2010, in the el-Dibir area of the
Somaliland-Ethiopian border was largely credited in the media with
being an EDF attack on civilians, but in fact it involved a clash with
Islamist forces that were routed by the EDF, which seized 120 of the
Islamists’ trucks and took them to the Ethiopian city of Jijiga.
At the core of all of this has been the proxy war waged by
Iranian-backed Islamists, supported by the secular governments of
Eritrea and Egypt, to keep Ethiopia landlocked. When the Ethiopian
Government, some two years ago, began having an inkling that it might
soon be in the gas exporting business, it started negotiations to
build a pipeline to the Somaliland port of Berbera.
When it became clear that the UDUB Government of Somaliland was not
well-prepared to contest the Presidential elections — which resulted
in a pan-Somalist Islamist taking power in July 20102 — Ethiopia was
forced to turn back to Djibouti as the only available seaport for the
export of Ethiopian gas.3
This is not an ideal situation for Ethiopia, given that Djibouti has
traditionally held Ethiopia to ransom — given that it has, once again,
a monopoly on Ethiopian trade imports and exports — but it is
nonetheless viable for both countries.
At present, the Petronas plans to be exporting natural gas from the
Ethiopian Ogaden basin within five years highlight the reality that
Ethiopia will soon be in a position to compete economically against
Egypt and Eritrea, which have been struggling to keep Ethiopia
landlocked. Egypt’s strategic motive, expressed constantly by Cairo,
has been to keep Ethiopia — which is vastly more fertile than Egypt
and which controls the headwaters of the Blue Nile, which provides
Egypt (and Sudan) with most of its water — from posing a strategic
threat to Egypt by, potentially, cutting off the flow of Blue Nile
waters. In fact, the policy has only served to make the Egyptian fear
a reality.
Egyptian Foreign Minister Ahmed Aboul Gheit and Prime Minister Ahmed
Nazif, speaking at the African Union summit in Kampala, Uganda, on
July 27, 2010, appeared to strike a conciliatory note on the
contentious issue of Nile water usage, but Foreign Minister Ahmed
Aboul Gheit slipped into his speech that Egypt sought a
“re-unification” of Somalia, bringing Somaliland back into the union
with Somalia, something which is clearly tantamount to bringing
Somaliland back into civil war and crisis, rather than helping the
entire Somali population. Significantly, this was a blow directed
directly at Ethiopia and at the West which seeks stability in the Horn
of Africa.
Egypt, pointedly, would rather have chaos on the Horn so that it could
be the master of the Suez/Red Sea SLOC all the way through the Bab
el-Mandeb adjacent to Somaliland, at the entrance to the Indian Ocean.
This pointedly, also, meant that Egypt supported constraining Ethiopia
from easy access to the Red Sea, which had once been dominated, at its
lower reaches, by the Ethiopian Navy. Following the fall of the Dergue
control of Ethiopia, Eritrea was encouraged by Ethiopia to declare its
independence from Ethiopia in 1993. It did so, taking not only the
historical geographic area of Eritrea (the onetime Bar Negus: Kingdom
of the North), but also the coastal part of Ethiopia adjacent to
Djibouti, and containing the Ethiopian port of Assab, which had never
been part of traditional Eritrea, but had been part of the modern
administrative zone of Eritrea under the Empire.
The result was that Ethiopia lost its access to the Red Sea, and had
anticipated a friendly trading path through “new” Eritrea to the sea,
because of the friendly separation of the territories. This was not to
be, and Eritrea began making unacceptable demands on Ethiopia, which
ultimately led to war, and to the inability of Ethiopia to use the
ports of modern Eritrea. The result is that Eritrea is now
economically destitute, and Eritrean Pres. Isayas Afawerke is under
increasing pressure to see the Ethiopian Government fail.
However, it is also clear that Eritrea can no longer afford to
militarily challenge Ethiopia, at least directly. Its military
successes against Ethiopia in the 1998-2000 fighting can now not be
replicated, given the declining economic fortunes of Eritrea and the
rising fortunes of Ethiopia.
Moreover, the prospect of considerable income from gas exports begins
to elevate Ethiopia into a new class of military capability. So if
Eritrea can no longer directly attack Ethiopia militarily, it must be
forced to re-double its proxy warfare, and yet even in this area
Ethiopia now seems poised to be able to achieve settlements with the
ONLF and OLF, two of the main proxy forces financed by Ethiopia and
its allies.
And yet Ethiopia finds itself still restricted in its ability to
satisfactorily control its export logistics, other than at the
goodwill of Djibouti. Some Ethiopian sources have been saying that
should Eritrea again provoke a war, then Ethiopia should sieze back
the ports in independent Eritrea which were once Ethiopian ports,
particularly Assab, which was never part of “traditional” Eritrea.
Moreover, in the South-Eastern part of modern Eritrea, the area around
Assab, there is already great local hostility to being under control
of Asmara (the Eritrean capital), and the Eritrean Government of
Isayas Afewerke. This hostility takes the form of armed insurrection
by ethnic Afars. The Afar Revolutionary Democratic Union (ARDU) has
engaged in combat operations since 1993 against the Eritrean
Government. They have commanded the attention of brigade-sized
Eritrean Government forces, which have unsuccessfully attempted to
curb the ARDU. ARDU itself is part of the Alliance of Eritrean
National Forces (AENF), an umbrella for opposition groups, mostly
Muslim, fighting the Isayas Government.
Ethiopia has, like Eritrea, used proxy forces against its adversarial
neighbor. The predominantly Muslim Eritrean Liberation Front (ELF) has
been based out of Addis Ababa since Eritrean independence, and
continues to fight the Isayas Government in Asmara. But the scale of
Ethiopian proxy warfare against Eritrea is nothing like Eritrea’s use
of all available proxy resources against Ethiopia. The radical
Islamist forces operating in Somalia have long been supported by
Eritrea, along with their support from Iran, Egypt, and Libya, as a
means of tying down Ethiopian forces and promoting secessionist moves
by ethnic Somalis and Oromos in Ethiopia.
Now, unlike a year or two ago, Eritrea recognizes that it can no
longer give Ethiopia a pretext to go to war, because it would lose
that conflict. On the other hand, Ethiopia’s need for the recovery of
its Red Sea access may well have been forced by the combined efforts
which recently resulted in, effectively, the loss of access through
the Republic of Somaliland, which has succumbed, with broad Eritrean,
Iranian, and other aid, to pan-Somalist, Islamist governance. So
Ethiopia must bow to whatever demands Djibouti may make on it, in
order to use the port of Djibouti, or else Addis Ababa must find a way
to take back its territory in the south-eastern, Afar, area of what is
the modern Eritrean state.
It would be logical, then, to assume that Addis Ababa would find ways
to promote the demands for independence or separation from Eritrea
made by ARDU and others. Success, or momentum, by these anti-Isayas
forces could eventually trigger Ethiopian military support.
Egypt, however, has been using Eritrea as its own proxy, and such a
development might cause Cairo to openly support Eritrea in a military
confrontation with Ethiopia, or else face the prospect of a revived
Ethiopian naval presence in the Red Sea, and growing Ethiopian wealth
and confidence to challenge Egypt and Sudan on the question of the use
of Blue Nile waters.
In all of this, the stability of the Red Sea/Suez global SLOC is
threatened, and no end is yet to be seen in the anomie — the
lawlessness — of Somalia, now being broadened to include Somaliland.
As well, the mounting pace of natural gas discovery and exploitation
in the region (and more broadly) will — contrary to conventional
linear extrapolations of energy market trends — transform global
energy markets, and bring about a major shift toward the use of gas,
probably to the point of a supply-dominated marketplace causing price
falls within a decade.
________________________________________
Footnotes:
1. The situation regarding “proven” gas reserves is changing
constantly, but, within the greater Indian Ocean region, the Qatari
reserves continue to dominate (although proven reserves declined in
2009 over 2008, due to exploitation), with 892-trillion cubic feet
(TCF) of reserves. Iran has even greater proven reserves, presently
standing at 992 TCF (according to the US Energy Information Agency:
EIA), but has been less able than Qatar to exploit these reserves for
the moment. Indonesia in 2009, according to the EIA, had proven
reserves of 106 TCF; Pakistan, 31 TCF; Yemen, 17 TCF; Sudan 3 TCF;
India, the fourth largest consumer of petroleum in the world, had 38
TCF, and was producing at 1.4 TCF a year in 2009; and Australia
(according to Australian estimates) had 100 TCF of proven gas
reserves. Most traditional estimates of the global energy market
indicate that gas presently commands some 23 percent of the market, a
position likely to rise to 29 percent by 2020, with petroleum staying
constant at 40 percent market share. This, however, in the view of
this analyst, is likely to be affected by (a) growing exploitation of
gas fields which will make choices in energy type easier for markets
such as India and the People’s Republic of China (PRC); (b) major
economic, environmental, and security dislocations which could affect
demand and pricing; and (c) the development of new nuclear
technologies which may offer cheaper and logistically more secure
energy.
2. All of the key portfolios in the new Somaliland Government of Pres.
Silanyo had, by early August 2010, been assigned to Islamists,
including the ministries of: Interior, Finance, Planning, Aviation,
Awqaf (Islamic Endowments), and the Chief of Cabinet.
3. In this regard, too, watch for the opening of Islamic banking in
the Somaliland capital, Hargeisa, since the assumption of Islamist and
pan-Somalist Pres. Ahmed Mahamoud Silanyo to office in the June 26,
2010, Presidential elections. Dahabshiil, the Somalian bank, was about
to open an Islamic bank in Hargeisa, and had already (in March 2010)
opened an Islamic bank in Djibouti. Sources in the new Government in
Hargeisa said that the new bank in Hargeisa was expected to become the
main avenue for the laundering of funds from Hawiye tribal activities
in Somalia (former Italian Somaliland) — including foreign-subsidised
militant activities — out of Somalia and into the global financial
marketplace.
Analysis by Gregory R. Copley, Editor, GIS/Defense & Foreign Affairs
(c) 2010 International Strategic Studies Association, www.StrategicStudies.org