The United States in the East Med: A Case Study in Energy Diplomacy

In recent years, the United States has elevated its engagement on energy with the Eastern Mediterranean. That engagement has been both narrow, trying to advance specific projects or deals, as well as broad, looking to reconceptualize relations with countries in the region. It has been both bilateral and multilateral, and it has involved both the executive and Congress. And it has been, at least on some level, very successful. As the United States further integrates energy into its diplomacy, the East Med is a good case to study. What can we learn about the ability of the United States to use energy to achieve its foreign policy goals?

Growing U.S. Presence in East Med Energy

Energy is, of course, only one U.S. interest in a region that includes Greece, Turkey, Israel, Egypt and Jordan. In some cases, energy is probably a subservient interest—for example, with Turkey, Israel, and Egypt. In some cases, like Greece, energy has emerged as a key pillar to forge closer ties; energy is “one of the great bright spots of U.S.-Greece relations,” per the U.S. ambassador there. And in some cases, like Cyprus, energy has brought new topics to the conversation and hence helped broaden a hitherto narrow bilateral relationship.

The multilateral approach to the region has been strong too. In March 2019, Secretary of State Mike Pompeo attended a meeting with the leaders of Greece, Cyprus, and Israel. The United States has supported the Eastern Mediterranean Gas Forum that includes Italy, Greece, Cyprus, Egypt, Israel, Jordan, and the Palestinians. In the Senate, a bipartisan bill was aptly named the Eastern Mediterranean Security and Energy Partnership Act—further proof that energy is deeply interwoven into U.S. strategy for the region.

Even though U.S. engagement operates under the general banner of “energy,” it differs from what the United States is doing elsewhere—pushing U.S. liquefied natural gas (LNG) as an alternative to Russia in Europe or as a geo-economic counterweight to China’s Belt and Road Initiative (with mixed results). The East Med region has abundant energy resources, and finding a way to develop those resources drives many initiatives—there is less selling needed because countries are mostly trying to trade with each other. (Even so, most countries in the region have imported some U.S. LNG over the past few years.)

Despite this different emphasis, the United States cannot escape its biases and preoccupations (nor can Europe for that matter). There is an effort, for instance, to fit the East Med region into a “Europe should diversify from Russia” frame even though it is unlikely that East Med gas would do such thing, and this view is at odds with how gas in the region is actually being developed. There is similarly an instinct to celebrate the arrival of U.S. LNG in the region even though it is a poor barometer for either U.S. relations with a country or for energy security. The United States risks trying to pigeonhole East Med gas to match whatever topics it obsesses about (but probably should not) rather than embrace the region for what it actually is.

These caveats notwithstanding, the United States is successful in part because it has not pushed any particular agenda all these years; it is more cheerleader than architect or enabler, with a modest, at best, role in facilitating projects and deals. Instead, the United States has managed to insert itself as an overseer—an indispensable partner in optics if not substance. This strategy has been successful for two reasons: First, because other partners have been able to act as project enablers and financiers (chiefly, European institutions). Second, because the parties in the region are happy to play up the prospects of progress as evidence of improved relations.

Consider, for instance, the case of Greece. A new storage tank at the Revythoussa LNG facility was enabled by a loan from the European Investment Bank (EIB). The Interconnector Greece-Bulgaria pipeline, which seems to have finally reached its final milestone, is supported by the EIB, the European Energy Programme for Recovery, and state guarantees from the Bulgarian government. The Trans-Adriatic Pipeline (TAP) is also tapping EIB funds, although U.S. diplomacy has been a critical enabler in the past (and the European Bank for Reconstruction and Development, in which the United States is the largest shareholder, has financed the pipeline in Turkey that feeds TAP). The remaining projects on the table—an underground storage facility in Kavala, a second import terminal in Alexandroupolis, the East Med pipeline—are making very slow progress and with no meaningful direct U.S. involvement.

This is not to say that the United States has not improved its position in the region. Arguably, U.S.-Greece relations are the best they have been in ages, enabled by several shifts that created an opening for closer ties: the perception that the United States was more supportive of Greece than Europe was during Greece’s economic crisis, a Greek government willing to resolve the Macedonia name issue, a rapprochement with Israel that started almost a decade ago, the growing rift between Turkey and the United States as well as Israel, a desire by Greece to boost military ties with the United States, and so on. So, energy has helped lubricate a relationship that has been closer anyway even if, in energy terms, there is little material collaboration.

In the Israel-Jordan-Egypt triangle, U.S. involvement has been more meaningful; there are also U.S. firms involved, which gives the U.S. government more tools for engagement. Diplomacy helped lessen concerns in Jordan about buying Israeli gas, and the Overseas Private Investment Corporation (OPIC) provided insurance for a contract to export gas from Israel to Egypt through the Arish-Ashkelon Pipeline. Even so, the true test for U.S. policy will come after gas starts flowing in early 2020—will exports from Israel trigger a political backlash in the recipient countries, and if they do, can U.S. diplomacy help contain that backlash?

There is reason to be pessimistic in that regard, and the limitations of the “great-power-as-cheerleader” strategy. In the conflict between Turkey and Cyprus, for instance, the U.S. vacuum is being felt acutely, with the United States being unwilling to go beyond vague statements calling on the parties to refrain from escalation. With no meaningful pushback from the United States or Europe, Turkey has sustained and, at times, escalated its activities in the East Med maritime region (even though, so far, these activities have not impacted energy decisions).

In short, the United States has inserted itself into various regional initiatives based on energy, and it has touted energy to celebrate its growing relations with countries even though there is little evidence that dollars or molecules have flowed. This success has been enabled by the presence of other actors—chiefly the European Union—willing to backstop projects, making the lack of direct U.S. support a lesser concern. Also, the region itself is willing to cheer energy discussions despite the lack of progress on the ground; the United States has been happy to play along and, at times, magnify the cheeriness. But in cases where the region has wanted a more traditional U.S. role—in securing the open seas and mediating the dispute between Cyprus and Turkey, for example—the United States has been unwilling to play that role.

Lessons for Other Regions

The U.S. experience in the East Med holds several lessons for U.S. energy diplomacy more broadly. Perhaps the first lesson is that political success does not require tangible results—energy projects built, deals consummated, and molecules flowing. Nor does it require clear U.S. support. In the East Med, there is a disconnect between ambition and reality as well as a gap between projects that the United States is celebrating and projects that the United States had helped advance. Diplomacy can yield political benefits without energy benefits as long as the parties are willing to tolerate the lack of progress on the ground and are content with a broad definition of “progress” as the metric that matters.

The second lesson is that U.S. diplomacy has been successful because it reinforced regional tendencies. There are resource rich counties looking to sell their energy, and there are countries that want to import that energy for their own use or for re-export. There is also a broader geopolitical shift that has made countries in the region welcome a stronger U.S. role and stronger ties with each other. In that setting, U.S. energy diplomacy has come to reinforce these forces and elevate them in prominence. The United States is not creating new dynamics, but it is magnifying those dynamics. And, in doing so, it has boosted its own involvement on a regional and bilateral basis.

The third lesson is that, eventually, someone has to help projects happen—and the United States has benefited from the role that European institutions have played in that regard, with U.S. institutions playing a more limited role (as in Israel). This paradigm may not be replicable in regions, like emerging Asia, that lack those auxiliary institutions that can bring money to the table. There remains a strong case for the United States to sharpen its geo-economic toolkit and be able to show up around the world not just with words but also with money.

The fourth lesson is that diplomacy can have negative side-effects. The growing rift between the United States and Turkey is too multifaceted to be blamed on energy. But Ankara’s view that it is has been left out of energy developments in the East Med is one factor (of many) driving Turkish aggressiveness vis-à-vis exploration for hydrocarbons around Cyprus. This is not to say that the United States caused this perception in Turkey, but the United States has been willing to reinforce initiatives that cause dissatisfaction in Turkey and that could, at some point, even lead to conflict. It is always important to think through the second- and third-order effects of energy diplomacy and remember that disadvantaged parties might react negatively and even violently when feeling threatened.

The fifth lesson is that energy can only do so much. It is, honestly, hard to tell whether energy is one element of a multilevel strategy or whether energy cooperation is the end in itself. When it comes to core U.S. interests, like preventing an escalation in conflict that threatens U.S. allies or defending a semblance of world order, there has been a clear slippage in recent years, and no amount of energy diplomacy can detract from that (more on that below). However, energy has helped cement a geopolitical arc, a series of countries that are primarily aligned with the United States in their strategic orientation. That arc, of course, has been built by ceding ground to Russia in Syria and by, increasingly, excluding Turkey. Even so, energy has helped buttress a defensive buffer, whose significance will depend on the United States articulating more clearly what the buffer is meant to buffer against.

Finally, the East Med experience shows that, no matter what, the U.S. role as the security guarantor is indispensable and that countries continue to look to the United States to provide that basic protection that makes all other inter-state relations possible. This is a major issue for the United States, and it is not unique to the East Med, of course. What the East Med shows, however, is that no amount of cheering and encouragement can fully replace the foundational role that the United States can play as the defender of an open and rules-based order. In its absence, all other benefits might eventually fade in comparison.

Nikos Tsafos is a senior fellow with the Energy and National Security Program at the Center for Strategic and International Studies in Washington, D.C.

Commentary is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).

© 2019 by the Center for Strategic and International Studies. All rights reserved.

Nikos Tsafos