What are the geostrategic reasons for the Mediterranean union?
There are several:
1- The Middle East region sees a significant power vacuum. There is no dominant power or a balance of power in this very vital part of the world. Israel is strategically at its limit as demonstrated in Lebanon. The United States is hemorrhaging in Iraq and is deeply unpopular in the region. Iran is strengthening and has made significant steps forward in the region but it is too far for most of the region centers of population and is viewed with suspicion in the ruling quarters. There is security system in the region as Paxa Americana is facing too many troubles. Because of its location and wealth, Middle East is an area that cannot have power vacuum.
2- There is an ideological vacuum in the region as well. Arab nationalism has failed. Western liberalism is failing against a strong Islamic current. The Islamic current is facing difficulties. Not the least of which is the association with terrorism. There is strong lack of guiding principles in the region. This may have been ok if Arab governments were able to provide strong economies to support the population growth but this is failing miserably. Leading to boat migration at the European shores that has increased significantly in the past year. This is alarming to Europe given their demographic situation.
3- The region has many financial and economical opportunities. It is amazing that every time the oil price increases, Europe tries to increase its ties to the Middle East. In 1980, Spain floated the idea of a bridge across the Mediterranean. The idea was killed of course when oil prices collapsed and Europe wanted instead to build a wall instead of a bridge. With oil prices at $150/barrel, there are many projects that European companies can do in the region under the umbrella of a Mediterranean Union.
4- Energy security: with Russia tightening the grip on Europe’s energy supply and the Gulf region liable to enter a long period of instability, Europe needs to find its own renewable energy source. The most important underpinning of the Mediterranean union is a project in which solar thermal energy will be produced on the Southern shores of the Mediterranean where the sun is abundant and land is cheap (solar energy requires lots of land unlike wind) and then the produced electricity is transported to the North via large cables. The Mediterranean union cannot be political, it can only be economical with energy as its underpinning. This enables Europe to get access to renewable energy that is more secure than oil or gas from Russia or from the Gulf. The only way for President Sarkozy to convince Germany not to obstruct his grand union idea is to promise that (a) German companies will participate in the action and (b) Germany will gain access to the resulting energy.
5- Europe fears the vacuum in the Middle East and Africa if not filled by Islamic radicalism will provide an opportunity for Russia or China to penetrate. Russia is already making deals with Libya to control Libyan gas production. Even stranger, Chinese students are in the streets of Cairo selling Chinese products. This can all be prelude to either one of these powers attempting to fill in the vacuum. Therefore, Europe had to respond.
6- Finally, there is the goal of attracting Syria, Lebanon, and the Palestinians away from Iran so that Iran can be slowly strangled far away from the vital Mediterranean. Iran has gained a bridgehead in the Mediterranean that Europe considers destabilizing and dangerous. With Israel unable to contain that bridgehead, Europe had to step in.
7- France as always has grand visions for re-creating its empire. Especially in its North African sphere of influence This time it is through energy.
Therefore, Europe and France need the following:
1- Energy arrangements, particularly renewable energy.
2- Access to markets, particularly for European companies in oil and gas activities or in selling engineering products.
3- Security cooperation.
Now, let us look at who was absent and why:
1- King Mohamed VI of Morocco: His father had a famous advice for him: “comme ci, comme ca.” This is a repeat of the past and based on that advice, the King expects that Europe will turn its face elsewhere once the short-term goals are achieved. He is the one who saw the collapse of the Africa-Europe tunnel and the bridge and all other linkage projects. He probably knows better of the French intentions through his own connections there, which are famously strong and influential. He also has a bitter taste from how Spain treated him in the past when invading tiny islands off the Moroccan coast despite strong relationships between the two kingdoms.
There are several:
1- The Middle East region sees a significant power vacuum. There is no dominant power or a balance of power in this very vital part of the world. Israel is strategically at its limit as demonstrated in Lebanon. The United States is hemorrhaging in Iraq and is deeply unpopular in the region. Iran is strengthening and has made significant steps forward in the region but it is too far for most of the region centers of population and is viewed with suspicion in the ruling quarters. There is security system in the region as Paxa Americana is facing too many troubles. Because of its location and wealth, Middle East is an area that cannot have power vacuum.
2- There is an ideological vacuum in the region as well. Arab nationalism has failed. Western liberalism is failing against a strong Islamic current. The Islamic current is facing difficulties. Not the least of which is the association with terrorism. There is strong lack of guiding principles in the region. This may have been ok if Arab governments were able to provide strong economies to support the population growth but this is failing miserably. Leading to boat migration at the European shores that has increased significantly in the past year. This is alarming to Europe given their demographic situation.
3- The region has many financial and economical opportunities. It is amazing that every time the oil price increases, Europe tries to increase its ties to the Middle East. In 1980, Spain floated the idea of a bridge across the Mediterranean. The idea was killed of course when oil prices collapsed and Europe wanted instead to build a wall instead of a bridge. With oil prices at $150/barrel, there are many projects that European companies can do in the region under the umbrella of a Mediterranean Union.
4- Energy security: with Russia tightening the grip on Europe’s energy supply and the Gulf region liable to enter a long period of instability, Europe needs to find its own renewable energy source. The most important underpinning of the Mediterranean union is a project in which solar thermal energy will be produced on the Southern shores of the Mediterranean where the sun is abundant and land is cheap (solar energy requires lots of land unlike wind) and then the produced electricity is transported to the North via large cables. The Mediterranean union cannot be political, it can only be economical with energy as its underpinning. This enables Europe to get access to renewable energy that is more secure than oil or gas from Russia or from the Gulf. The only way for President Sarkozy to convince Germany not to obstruct his grand union idea is to promise that (a) German companies will participate in the action and (b) Germany will gain access to the resulting energy.
5- Europe fears the vacuum in the Middle East and Africa if not filled by Islamic radicalism will provide an opportunity for Russia or China to penetrate. Russia is already making deals with Libya to control Libyan gas production. Even stranger, Chinese students are in the streets of Cairo selling Chinese products. This can all be prelude to either one of these powers attempting to fill in the vacuum. Therefore, Europe had to respond.
6- Finally, there is the goal of attracting Syria, Lebanon, and the Palestinians away from Iran so that Iran can be slowly strangled far away from the vital Mediterranean. Iran has gained a bridgehead in the Mediterranean that Europe considers destabilizing and dangerous. With Israel unable to contain that bridgehead, Europe had to step in.
7- France as always has grand visions for re-creating its empire. Especially in its North African sphere of influence This time it is through energy.
Therefore, Europe and France need the following:
1- Energy arrangements, particularly renewable energy.
2- Access to markets, particularly for European companies in oil and gas activities or in selling engineering products.
3- Security cooperation.
Now, let us look at who was absent and why:
1- King Mohamed VI of Morocco: His father had a famous advice for him: “comme ci, comme ca.” This is a repeat of the past and based on that advice, the King expects that Europe will turn its face elsewhere once the short-term goals are achieved. He is the one who saw the collapse of the Africa-Europe tunnel and the bridge and all other linkage projects. He probably knows better of the French intentions through his own connections there, which are famously strong and influential. He also has a bitter taste from how Spain treated him in the past when invading tiny islands off the Moroccan coast despite strong relationships between the two kingdoms.
2- King Abdullah II of Jordan: Interesting enough, he is the only other Arab king invited. Both kings declined the invitation. In the Middle East and the Fertile Crescent region, Jordan is strategic. In the Mediterranean security arrangement, Jordan is a non-entity. Jordan’s role shines when Iraq and Saudi Arabia are in the picture. Otherwise, it only has a secondary role. Most likely the Jordanian King listened to the Moroccan King and stayed home. It is also likely that in absence of any guidance from Washington (which is pre-occupied with Iraq and elections), the King preferred to be on the fence. Finally on the personal level, the King's uncle Al-Hasan Bin Talal was instrumental in the Union idea. As a president of the Club of Rome, Al-Hasan addressed the world energy dialog in April 2006 saying: "The sun belt and the technology belt can become very powerful when they begin to understand themselves as a community, a community of energy, water, and climate security." As is known, Abudllah II has deep issues with his uncle since the messy death of King Hussein Bin Talal.
3- Mommar Gaddafi of Libya: The erratic leader has a natural distaste for European influence and prefers to play on a bigger scale with Russians, Africans, and Americans.
Sarkozy's gamble is bold for sure but it may be crazy enough that it will work! Reasons are:
1- European companies really need the energy and at today's prices, projects across the shore may be economical.
2- Populations in the Middle East need something to attract them and this may be the something.
3- Energy security is a big issue for Europe and it needs a solution.
4- Public opinion in France is very supportive as long as it keeps Arab immigrants away.
So, for now the odds are favorable. Don't underestimate the guy (Sarkozy). He is smart.
Economics of the Union
For all my Arab brothers and sisters, Europe has studied the concept since 2005 and studied it very seriously. The underpinning is to general solar-thermal power in North Africa and transmit power to the North via high voltage DC links.
Results of the study shows that by 2020, Europe can import 10 GW of electricity from North Africa, which requires the establishment of about 100 plants each of 100 MW, which is quite doable in the next 12 years. The cost of electricity delivered to Europe will be about 21 cents/kWhr. This compares to about 12 cents/kWhr now from electricity produced using natural gas. However, if we add the carbon taxes associated with natural gas or any other fossil fuel burning, the cost of natural gas generated electricity leaps to about 18 cents/kWhr. The insecurity associated with importing natural gas from Russia is certainly worth more than the 21 - 18 = 3 cents/kWhr difference between the two options.
For companies operating the solar thermal production and transmission systems, they will have to invest about 75 billion dollar and get a return of about 5 billions per year. This is a return of 15 years. This is certainly long return of 6.7% per year. However, this is better than the European bank interest rates in today's low interest rate environment. The European bank can provide loan guarantees to finance these mega projects (this is where Germany's role becomes critical). The investment of 75 billion over 12 years is also not that much for the European Union.
These investments cannot be made in Europe for very simple reasons:
1- Solar capacity factor (temperature and how many hours the sun shines) is at least 25% higher in North Africa than in Europe particularly in Winter when demand for heat is high. Natural gas avoided to be burnt for electricity can be utilized for heat with a cooling effect on the price of natural gas in Europe.
2- Solar plants consume plenty of land. Land in North Africa is at least 50% less expensive than land in Europe.
Doing such an investment only in Europe will make the economics so much worse that it will be prohibitive.
How Should Arabs Respond?
1- Trust the people:
Arab governments should avoid making these projects government-to-government. A cadre of national businessmen must be created. This is a golden opportunity.
2- Local use:
A complete new vision for landscape and usage of these new solar thermal plants must be established. Each village can be a company owned by the inhabitants, like in Switzerland with the inhabitants having rights to vote and control their own local affairs. Each plant of 100 MW can be a nucleus of a village. Some of the power can be used for desalination to settle more people into the desert. The rest can be exported with the income coming back to the owners/inhabitants.
3- A fair system:
People must be allowed to bid and get the European loan guarantees and be partners to their European counterparts. For example, some of the shares of those villages can be traded on the stock exchange, while others can be given to university graduates at the top of their classes. People's creativity must be unleashed.
Only then would the plan become a real chance of change.
No comments:
Post a Comment