Solar eclipse

I'm not sure whether I linked to it, but last week my Latitude piece was about the shortages in diesel fuel in Egypt (called Solar). It's here.

For a closer look at the frustrations faced by microbus drivers, who have been blocking roads in protest at shortages, there is a fine piece of reporting in the Daily News Egypt. It's also the top story in many of today's Egyptian dailies, with fighting breaking out during protests and at gas stations. Some report that fuel is being diverted to Gaza (it is much cheaper to get Egyptian fuel than Israel fuel, after all.) Others that the fuel shortages reach as much as 60% in some provinces, and 30-40% in most. Apparently several fuel tankers are awaiting to be paid to unload their cargo — but the government has no cashflow.  

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Issandr El Amrani

Issandr El Amrani is a Cairo-based writer and consultant. His reporting and commentary on the Middle East and North Africa has appeared in The Economist, London Review of Books, Financial Times, The National, The Guardian, Time and other publications. He also publishes one of the longest-running blog in the region, www.arabist.net.

The case against Egypt selling gas to Israel

For what must be the third or fourth time since the Egyptian revolution began on January 25, the Sinai gas pipeline that takes Egyptian gas to Israel has been attacked. These attacks are not particularly dramatic, but are enough of a bother that it takes several weeks to restore the flow of gas to Israel — and often Jordan, which is affected by the pipeline. The people behind the attacks are thought to be Sinai-based Islamists who oppose the sale of gas to Israel, but we don't really know for sure. The attack took place only 60km east of the Suez Canal, and it could very well be people from the Nile Valley carrying out the attacks — and they don't have to be Islamists, either, since plenty of other people oppose the gas deal.

Since the revolution, the interim government has reviewed gas prices but thus far everything indicates that the sale of gas will continue. From what I've been able to gather (and I'd like to write something longer on this one day), Egypt was selling the gas to Eastern Mediterranean Gas (EMG), the private firm that then sold the gas to the Israeli National Electricity Company, at around $3 per mbtu (that's million British thermal units — the standard measurement for these things). EMG then sold it to the Israelis for around $4.5 per mbtu, pocketing a 50% profit margin for no more than the transaction costs and some of the infrastructure between the two countries. The market price for gas (which is not as fungible as oil since it tends to rely on pipeline infrastructure unless shipped as LNG) is currently around $4.40 for futures in North America, but spot markets in recent years passed the $10 per mbtu mark. Either way, there is no doubt that the price of the gas sold by Egypt to EMG was well below market prices, and that the company made an easy profit without investment of its own (I'll leave the issue of whether EMG sold the gas to Israel at a fair price aside.)

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Links for Jan.06.10 to Jan.07.10

Video: Egyptian police clash with Gaza aid convoy | guardian.co.uk | Another good video about clashes between Viva Palestina and Egyptian security. ✪ Rebuilding Afghanistan « London Review Blog | Narcotecture = Drug-financed ugly houses in Kabul. ✪ Israeli television confrontation is ‘a metaphor of the moral crisis in which Zionism is found today’ | Fascinating video argument - must watch. ✪ Israel to deploy Gaza rocket interceptor by June - Haaretz | So no more need for blockade, I guess? ✪ Ainsi disait Laroui à propos de la politique. Extraits politiques « min diwan Assyassa ». « Des maux à dire | On new book on M6 era in Morocco. ✪ Security Experts: Administration Overstates Domestic al-Qaeda Threat « The Washington Independent | Sounds familiar. ✪ Pro-ElBaradei campaign seeks collective proxies | Al-Masry Al-Youm | Interesting list of backers for ElBaradei campaign, includes Amr Moussa! ✪ Palestine Vivra! The French Heroes of the Gaza Freedom March | A nice account. ✪ Jerome Slater: On the US and Israel | New blog by academic. ✪ The Settlement Freeze That Isn't | The American Prospect | "The freeze is really a very thin layer of ice atop the river of settlement growth." ✪ BBC News - Egypt police clash with Gaza aid convoy activists | Unbelievable - Viva Palestina convoy sent through Kerem Shalom. ✪ Egypt to import natural gas from Iraq | Al-Masry Al-Youm | I wonder how much it costs compared to the gas sold to Israel. ✪ Saudi Arabia backs Egyptian plan for renewed peace talks - Haaretz | This peace plans sounds dodgy, esp. in its treatment of settlements. ✪ t r u t h o u t | Egypt: Rooftops Empower the Poor | Nice story on clean energy for the poor on Cairo's rooftops. ✪ Support the Cairo Declaration of the Gaza Freedom March Petition |
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