When the oil gusher lottery came to the Middle East, Jordan seemed to have drawn a losing ticket. And now that some of the neighbors it depended on for fuel supplies, like Iraq and Egypt, have convulsed with political or sectarian strife, Jordan is frantically looking for other sources — and finding them in unexpected places.This month, Jordan, a crucial yet energy-poor Western ally, announced a landmark 15-year deal to import vast amounts of natural gas from Israel. The plan, worth $15 billion, would make Israel Jordan’s largest gas supplier,according to the Israeli business daily Globes. It represents a remarkable economic tie for two countries with a history of tension, and reflects just how badly Jordan needs energy.
It is “potentially an enormous deal, but one that makes Jordan partially dependent on Israel, which is politically very problematic for Jordan in both domestic and regional politics,” Curtis Ryan, an expert on Jordanian politics at Appalachian State University in North Carolina, said in an email.
Plenty of uncertainties remain in the Israeli deal, and further approvals are needed from both countries. For the agreement to succeed, the pipeline route must be secure and the political leadership in Jordan must remain stable, said Amy Myers Jaffe, executive director of energy and sustainability at the Graduate School of Management at the University of California, Davis. Already, the deal has infuriated some members of the Jordanian Parliament, although power largely resides with the king.
The plan, Dr. Ryan said, is “a difficult political sell in Jordanian politics under any circumstances — but especially right now,” in the wake of Israel’s strikes on the Gaza Strip.
Israel once shared Jordan’s position as an energy-poor nation (the joke in Israel was that Moses led his people to one of the few places in the region without oil). But with the discovery in 2010 of a vast offshore natural gas field, Israel has been looking for export opportunities.
Because Jordan has neighbors — which also include Saudi Arabia and Iraq — that are awash in oil or natural gas, a conspiracy theory of sorts has developed that Jordan is hiding its oil, according to Zu’bi Al-Zu’bi, dean of the business school at the University of Jordan.
Jordan imports about 95 percent of its energy, according to Dr. Al-Zu’bi and other experts. In recent years, its natural gas imports had come mostly from Egypt (before that, Jordan had relied heavily on cheap oil from Saddam Hussein’s Iraq). Repeated attacks on the Egyptian pipeline following the 2011 ouster of President Hosni Mubarak during the Arab Spring uprisings forced Jordan to look for alternatives.
The pipeline attacks were “devastating for Jordan’s economy,” Dr. Ryan said. The nation “was already in an economic downturn and deeply in debt, and the constant sabotage of the pipeline effectively turned off Jordan’s supply dozens of times.”
Compounding the challenge, the country’s population has soared, in part because of refugees from Syria, Iraq and other nations. International institutions have leaned on Jordan to cut energy subsidies even as the costs of reliable sources of energy have risen. The Jordanian government has increased energy prices for consumers, but that is never a popular move.
Jordan’s electricity is now generated mostly from a mix of Saudi oil and Egyptian gas, Dr. Al-Zu’bi said. Jordan is “in a very vulnerable situation,” he added, likening it to Lebanon, another relatively energy-poor country, which is trying to import liquefied natural gas.
As it tries to rapidly diversify its energy mix, Jordan hopes — controversially— to build its first nuclear power plant, which could draw from a reserve of underground uranium ore close to the Israeli border. Jordan is also looking at renewable sources like solar energy, an abundant resource in the desert nation.
“Jordan would be well placed to make great use of both solar and wind power, but needs the internal push and the external support to make that really happen,” Dr. Ryan said Jordan has set a target of getting 7 percent of its energy from renewable sources by next year, and 10 percent by 2020, and international groups are eager for the nation to push ahead. Last week, the European Bank for Reconstruction and Development approved a $30 million loan to support an energy-efficient system for heating and cooling buildings at a commercial center in Amman, the Jordanian capital. Last year, the International Finance Corporation, an arm of the World Bank, led a project to obtain $221 million in financing for the construction of Jordan’s first privately owned wind farm.
It also turns out that the conspiracy theorists are right, and that Jordan has been hiding its oil: Shale rock containing vast quantities of oil underlies much of the country, but extracting it is likely to be technologically challenging and expensive. Nevertheless, Jordan wants in the coming years to build a power plant that runs on shale oil And Jordan will always be looking for new suppliers. This month, it held talks with Cyprus about importing gas Jordan’s predicament shows the importance for a country not to be “over reliant on a particular type of energy source,” Dr. Ryan said. Given the region’s volatility, he added, countries should also avoid being “over reliant on any one country as a supplier.”
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