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Iraq-to-Haifa oil pipeline could spur economic rebirth

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Message: If you are having trouble reading this email, you may view this article online at: http://www.jweekly.com/19725/full/19725/iraq-to-haifa-oil-pipeline-could-spur-economic-rebirth/ Iraq-to-Haifa oil pipeline could spur economic rebirth Friday, April 18, 2003 | by MATTHEW GUTMAN JERUSALEM—With Baghdad effectively in American hands, Israel and Jordan are testing the political waters to see whether the Haifa-Mosul pipeline could once again pump oil from Iraq to Israel's major port city. According to a well-placed Israeli source close to the Jordanians, the deal, which is partially contingent upon progress on the Palestinian front, could open a new chapter in the cold peace between Israel and Jordan. Infrastructure Minister Yosef Paritsky said April 9 that he has ordered his ministry to conduct a feasibility study for reopening and possibly widening the 350 mile pipeline. He estimated that oil coming straight from Iraq could reduce Israeli energy prices by 15 to 20 percent providing a much-needed break for the flagging economy. Northern Iraq's oil fields are among the richest in the world, and according to some sources have reserves as large as Saudi Arabia's. The Israeli source said Jordan took "a huge gamble in supporting the United States." The implicit price for Jordan's unparalleled help to coalition forces will undoubtedly be a quick infusion of economic aid, part of which, said the source, "could be significant revenues from the pipeline." Paritsky reckoned that such a deal "can become feasible the day after a new regime begins operating in Iraq. But we have to wait and see what happens." The British built the pipeline in the 1930s and 1940s, and oil flowed from Iraq to both Tripoli in Lebanon, along the T-line, and to Haifa, along the H-Line. However with the British withdrawal from Palestine on the eve of the 1948 War of Independence, the pipeline shut down, remaining dormant ever since. The passage of oil from Iraq to Israel through already existing infrastructure could "transform Haifa into a new Rotterdam," said Paritsky. He envisions tankers from all over the world taking on loads of crude oil, or oil already refined in Haifa's refineries all at a price, of course. As Israel buys its oil on the open market and ships it via tankers, a pipeline would significantly cut often-hefty shipping and docking prices. A wary Jordanian Foreign Minister Marwan Muasher denied reports that his country is considering reopening the pipeline. Warming its relations with its neighbor to the west, Muasher told al-Jazeera, is contingent upon Israel advancing on the peace process. "If the regime is pro-American and would like to negotiate, then we are more than willing," said Partisky, who optimistically received Muasher's reluctance to reject the deal as "positive." Paritsky said he believes the oil trade would be lucrative for all parties, especially Jordan, which could profit handsomely, depending on the amount of crude that passes through its section of the pipeline. The source said he and Jordanian counterparts have been discussing the possibility of the pipeline for several months as a way to jumpstart the cold peace between America's closest allies in the Middle East. But before Jordanian-Israeli cooperation resumes, Israel must first demonstrate progress along the Palestinian front. The advent of the road map, the appointment of Mahmoud Abbas (Abu Mazen), and the development of a different kind of Middle East with Saddam all increase the possibilities for the pipeline deal, he said. Raging anti-American and anti-Israeli sentiment continues to swirl in Jordan, where the campaign against the Iraqi regime was extremely unpopular. Some Jordanian sources said last week that mass demonstrations could have threatened stability in the Hashemite Kingdom. "Ultimately, the government will be able to control the masses. Nevertheless, we have to tread lightly," in order not to spook Jordan, the Israeli source said. But energy expert Dr. Amit Mor, president of Eco-Energy, said he believes that the pipeline would not have such a significant effect on the Israeli economy. He calculates that the pipeline would lower fuel prices by only 5 percent, or about $7 per ton of oil. This would give the Israeli economy about a $70 million boost per year, certainly no reason for undue exuberance, he noted. Israel's GDP is around $100 billion. "Anyway, it is a bit early to discuss this subject," he said skeptically, adding that geo-political reasons make it unwise to discuss this matter publicly for some time. If exposed too early, the pipeline deal could damage both Israeli and American interests. It would also be foolhardy to depend too heavily on a single source for such a vital commodity as oil, considering the historical instability of the region, he noted. Nevertheless, Paritsky is eager to meet with Jordanian counterparts to discuss future prospects. "I have not gotten an invitation yet," but would welcome an opportunity to discuss the matter with the Jordanians should the opportunity arise, he said.

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