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Congress Quietly Adopts Exxon Mobil-Backed Law Promoting New Gas Pipeline, Arms to Cyprus

From left, Cypriot President Nicos Anastasiadis, Greece’s Prime Minister Kyriakos Mitsotakis, and Israeli Prime Minister Benjamin Netanyahu meet in Athens on Jan. 2, 2020, to sign a deal to build a key undersea pipeline, named EastMed, designed to carry gas from offshore deposits in the southeastern Mediterranean to continental Europe. Photo: Yorgos Karahalis/AP

Congress Quietly Adopts Exxon Mobil-Backed Law Promoting New Gas Pipeline, Arms to Cyprus

Steve Horn, Lee Fang

February 6 2020, 7:00 a.m.

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In a bitterly divided Congress, lawmakers still managed to come together to help Exxon Mobil pass major legislation that could remake the geopolitics of the Middle East and Europe.

During the holiday season legislative blitz in December, legislators tucked an obscure provision into the omnibus spending package that lifted arms restrictions and boosted a controversial pipeline deal in the eastern Mediterranean Sea.

The legislative text, mirroring a bill that has circulated in Congress over the last year, promises a range of U.S. assistance for the development of natural gas resources off the coasts of Israel and Cyprus, including support for constructing pipelines and liquified natural gas terminals and the creation of a United States-Eastern Mediterranean Energy Center in the region run by the U.S. Department of Energy.

Cyprus, one of the smallest states in the European Union, has come under increasing pressure from Turkey, which opposes the development of new gas fields off the disputed coasts of the island-state and has used its navy to threaten drilling vessels.

In response, the legislative text also repeals the prohibition of weapons transfers to Cyprus put in place in 1987, promotes greater U.S military assistance to Greece and Cyprus, and instructs the U.S. to maintain its newly situated predator drone fleet in the region. The omnibus includes provisions from the Eastern Mediterranean Security and Energy Partnership Act, legislation introduced in the House and Senate last year.

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While the provision received scant coverage in American media, it prompted a flurry of activity after its passage.

On January 2, leaders of Israel, Greece, and Cyprus appeared together to sign a trilateral deal to build a new $6.7 billion pipeline to bring gas from offshore fields in Israel and Cyprus to Greece, Italy, and Bulgaria. The new EastMed pipeline could transport as much as 20 billion cubic meters of gas to those countries annually, pitched as a way to lessen Russian and Turkish energy influence in the region. Days later, Russia and Turkey announced plans for their own joint venture, the TurkStream pipeline.

The authorization of the military assistance and pipeline support never received a single hearing, an up-or-down vote, or any open debate. Its inclusion in the must-pass spending package reflects the powerful lobbying coalition that came together in support of the deal.

That coalition included foreign agents tied to both Greece and Cyprus, the American Jewish Committee, and Christians United for Israel, an evangelical group with close ties to Israel. Greek American diaspora groups also mobilized to lobby for the legislation. Hellenic American Leadership Council, one Greek American group, touted the passage of the text as the “most pro-Hellenic bill in a generation.”

But disclosure documents reviewed by The Real News and The Intercept suggest that Exxon Mobil was at the center of the lobbying effort. The energy giant curried favor to win support for the gas project within the European Union, as well as in Washington, D.C.

The rapid political moves on Capitol Hill came just months after Exxon Mobil announced one of the largest gas field discoveries in recent years off the coast of Cyprus last February — the latest in a series of new discoveries in the region over the past decade.

In 2013, the Hudson Institute was the first major Beltway institution to call for the U.S. to provide military assistance to Cyprus and promote the development of the new gas discoveries in the region. The following year, the Hudson Institute published a long follow-up report on the issue, after which Exxon Mobil disclosed a donation of $15,000 to the think tank. Seth Cropsey, a senior Pentagon official for the Reagan and George H.W. Bush administrations, served as the lead author of both reports.

The new gas discoveries prompted growing coordination between Israel, Greece, and Cyprus.

“We decided to explore this in a very audacious way: to form a trilateral committee between Greece, Cyprus, and Israel to plan the possibility of a pipeline that would take our common resources of gas and export them to Europe via Greece — a pipeline from Israel, Cyprus, through Greece to Europe,” Israel Prime Minister Benjamin Netanyahu said at a press conference in 2016. Also in 2016, Exxon Mobil and Qatar Petroleum formed a new venture and won a bid to explore offshore blocks near Cyprus. The contract was later inked in a 2017 ceremony in Cyprus, with officials from both companies present, alongside both the U.S. and Qatari ambassadors to Cyprus.

“Exxon Mobil and our partner, Qatar Petroleum, have a long and successful history of developing gas resources,” said Andrew Swiger, principal foreign officer of Exxon Mobil, in a press release at the time of winning bid.

Lobbying disclosures in the European Union show that Exxon Mobil officials quickly went to work, scheduling meetings in March 2018 with an unnamed EU cabinet member on gas exploration near Cyprus. Just three days later, the U.S. military brought the 26th Marine Expeditionary Unit to Limassol, Cyprus, on the USS Iwo Jima as Exxon Mobil commenced exploratory drilling in the region.

Speaking with investors later that year, the company boasted about the Cyprus gas fields as a key area of growth. Asked by analysts about where Exxon Mobil sees its greatest future prospects, Neil Chapman, Exxon Mobil’s senior vice president, said he “would highlight Cyprus.” Last year, in another conference call with investors, Chapman emphasized that the Cyprus fields “turned out to be a pretty nice discovery.”

The EUobserver, a watchdog media outlet, obtained an email showing that Exxon Mobil hosted a lunch in April 2018 with Cypriot members of European Parliament, Cyprus’s highest EU diplomat, and EU Commissioner Christos Stylianides, to discuss the company’s gas exploration of the Cyprus coast. The lunch took place at a restaurant located close to the U.S. Embassy in Brussels.

In October 2018, the company also served as the lead sponsor of a gala held in Greece at the largest business convention in southeast Europe. In a photo published by the U.S. Embassy in Cyprus, then-U.S. Ambassador to Cyprus Kathleen Doherty is seen alongside Exxon Mobil executives.

Exxon is also active within AmCham Cyprus, a global offshoot of the U.S. Chamber of Commerce that receives financial backing from the U.S. Embassy in Cyprus. The company’s office in Cyprus is located next door to the embassy.

Varnavas Theodossiou, lead country manager for the company in Cyprus, sits on the board of directors for AmCham Cyprus. Addressing Exxon Mobil by name for its efforts in the region, current U.S. Ambassador to Cyprus Judith Garber gave a speech to AmCham Cyprus this past September.

“We are proud that two American companies — Exxon Mobil and Noble Energy — are participating in this game-changing development,” said Garber, according to a transcript of her remarks.

As the corporation — dubbed a “private empire” by investigative journalist Steve Coll — moved to shore up EU support for the deal, the U.S. also brokered a political agreement.

Secretary of State Mike Pompeo, last March, convened a meeting in Jerusalem with officials from Israel, Greece, and Cyprus to “affirm their shared commitment to promoting peace, stability, security, and prosperity in the Eastern Mediterranean region.” The State Department’s release from the event noted that the leaders at the meeting “welcomed the recent natural gas finds in the Eastern Mediterranean and its potential to contribute to energy security and diversification.”

The next month after the Jerusalem meeting, Sen. Bob Menendez, D-N.J., and Sen. Marco Rubio, R-Fla., introduced the bill. Menendez, according to Senate expense filings, traveled to Athens shortly after introducing the legislation to discuss the idea with Greek and Cypriot officials.

The public disclosures only show part of the story. But over the following months throughout the year, Exxon Mobil, Christians United for Israel, the American Hellenic Educational Progressive Association, and American Jewish Committee mounted a sustained lobbying campaign with officials over the bill (which later became the provision).

For 2019, the American Hellenic Educational Progressive Association spent $15,000 during the second half of the year lobbying for the legislation and another bill that would prevent the U.S. Department of Defense from sending arms to Turkey. The AJC spent $30,000 lobbying for it and two other issues during the third quarter of 2019 alone. And CUFI, for its part, spent $90,000 lobbying for the legislation and other bills during the second half of the year. The group said in its fourth quarter filing that it pushed to get the legislation inserted into the budget bill.

That campaign called for the U.S. to lift the arms embargo on exports to Cyprus, which began in 1987 after a sustained lobbying campaign by the Turkish foreign agents in the U.S., known as one of the most robust foreign lobbying presences in Washington. Cyprus was divided following the Turkish occupation of the island in 1974 in response to a military coup engineered by the Greek government. The Turkish government calls its occupied territory the Turkish Republic of Northern Cyprus, which is not internationally recognized.

The Turkish Republic of Northern Cyprus lobbied against the legislation, according to foreign agency lobbying documents, hiring the firm Prime Policy Group to act on its behalf. Prime Policy Group is the successor to Black, Manafort, Stone, and Kelly, a firm that was the namesake of two allies of President Donald Trump: Paul Manafort and Roger Stone.

Despite that opposition, the mix of foreign, pro-Israel, and energy lobbying prevailed. Without debate over either the wisdom of lifting the arms embargo or the exclusionary development of Cyprus gas fields in the hands of a few regional governments, Sen. Chuck Schumer, D-N.Y. — citing the bill’s bipartisan support — signaled approval for the vast majority of it to be included in the spending bill. (The spending bill removed language denouncing Russia’s arming Turkey with an S-400 fighter missile defense system last July.)

Concerns about the climate crisis and methane emissions associated with offshore gas drilling, too, went undiscussed. Methane is a greenhouse gas more potent than carbon dioxide when emitted.

Pompeo was scheduled to appear in Cyprus to celebrate the signing of the legislative text, which boosted the new pipeline deal and the lifted of the arms embargo. The trip, however, was canceled because of assassination of Iran Maj. Gen. Qassim Suleimani.

Menendez then met with Greek Prime Minister Kyriakos Mitsotakis on January 8, the day after Mitsotakis met with Trump, with Menendez presenting him a copy of the legislation for a photo opportunity. The senator received $36,500 in defense industry political action committee campaign contributions during his successful 2018 reelection bid cycle, garnering more than $10,000 in campaign contributions from General Atomics, producer of the MQ-9 drones that will continue to be stationed at the military base in Greece under the legislation’s dictates.

For his part, Rubio received $17,951 in campaign contributions from Exxon Mobil during his 2016 reelection bid and another $27,900 from General Atomics during that same cycle. Neither Menendez nor Rubio responded to repeated requests for comment for this story.

Belén Balanyá, a researcher and campaigner for the group Corporate Europe Observatory, said the passage of this bill symbolizes the clout that Exxon Mobil has within the EU political process.

“ExxonMobil’s lobbying, direct and in association with other dirty fossil fuel companies and their huge web of lobby groups, has helped lock the EU into fossil-fuel dependency for another 30 years,” Balanyá said via email. “That’s why we have launched together with other groups the Fossil Free Politics campaign, where, similar to existing restrictions on tobacco industry lobbyists, we demand a firewall between decision makers and the fossil fuel lobby. Only then can we take the real action we need to leave fossil fuels in the ground.”

This piece was co-published with The Real News.

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February 9, 2020
Cyprus Launches Drones To Monitor Turkish Gas Drilling In Mediterranean

Daniel Markind Contributor

Energy

I am an attorney who writes about Marcellus Shale area developments.

aerial surveying with drones

Getty

Two of the legal worlds that I straddle – energy and aviation – collided last week in the Mediterranean Sea. The implications for these two disciplines, as well as world security, could be enormous.

The nation of Cyprus deployed drones to monitor Turkish attempts to drill for natural gas in waters claimed by the divided nation. Turkey’s action added to the tension in a region already roiling from the migrant problem, the recent Turkish invasion of Syria, and the overall Middle East uncertainty.

To understand the move by Cyprus, we must start with the fact that Turkey invaded Cyprus in 1974 and divided the island in half. Populated mostly by residents of Greek and Turkish ancestry, the island long had been dominated by the more populous Greeks. Most of the island nation, excluding the northern part described below, calls itself the Republic of Cyprus.

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Since 1974, Turkey has occupied the northern part of the island, setting up its own rump state called the Turkish Republic of Northern Cyprus, or Northern Cyprus for short. Northern Cyprus is recognized as an independent country by only one nation – Turkey. The Republic of Cyprus continues to declare sovereignty over the disputed north.

The Turkish occupation of the northern half of Cyprus has long been an open sore in the permanently problematic relationship between Greece and Turkey, to say nothing of the internationally recognized nation of Cyprus. Since 2004, Cyprus has been a member of the European Union as a “de facto divided island.” The EU’s official position is that it “fully supports the current negotiations between the leaders of the Greek Cypriot and Turkish Cypriot communities which aim to reach a comprehensive settlement leading to the reunification of the island and establish a bi-zonal, bi-communal federation in which the communities would enjoy political equality.”

Add to this the coming to power, and the consolidation of power, of Turkish President Recep Tayyip Erdogan. Erdogan is the leader of the Justice and Development Party, known as the AKP. This is a Muslim fundamentalist party that has moved slowly but inexorably toward injecting religion into the secular Turkish state first created after World War I by Mustafa Ataturk. Long a western ally, Turkey in the Erdogan era is now a very different place whose commitment to western values has increasingly been questioned.

Within the last decade, massive natural gas deposits were found in the Mediterranean near the territorial waters of Cyprus, Greece and Israel, three countries from whom Erdogan purposely has distanced Turkey. Erdogan’s mistrust was increased when these three reached agreements on the gas, including exploration, development, and the construction of a gas pipeline to Greece.

For Erdogan, this was too much. He sent the Turkish drilling ship Yaviz to drill for gas inside what Cyprus claims as block 7 of its exclusive economic zone. Cyprus previously had licensed this area to be explored for natural gas by Italy’s Eni and France’s Total.

Cyprus responded by purchasing sophisticated Israeli drones and deploying them to shadow the Yaviz. The introduction of the drones increases the risk of accident, raises the possibility in Turkish eyes that the drones might be used for offensive purposes, and adds yet another element of instability into the region.

In airport parlance, drones are known as “UAS’s” (Unmanned Aircraft Systems). Their use is incredibly beneficial yet incredibly problematic, for the reasons shown by the Yaviz incident. Monitors are easy and cheap ways to keep “eyes in the sky”, but as we saw in Saudi Arabia last month drones can be used for offensive military purposes. The aviation world is struggling mightily with the effects of drones, not sure how to balance the obvious benefits with the potential adverse impacts on world aviation.

Facing massive international pressure over his Syrian incursion, it remains to be seen how far Erdogan will be willing to go to prevent Cyprus, Israel and Greece from developing these Mediterranean gas fields. The failure of the West to stand up to his incursion in Syria may embolden him in other spheres. There is no way to tell. If he does become emboldened, it is not surprising that energy may provide the vehicle for Erdogan to do so. Regardless, we have likely not heard the last of the Mediterranean gas dispute. As with everything else in that region, what might be an economic boon capable of lifting the standard of living for millions could instead become a focal point for further international conflict. Such is the world in which we live.

Daniel Markind is a shareholder at Flaster Greenberg PC who practices in Energy, Real Estate, Corporate, and Aviation Law. He can be reached at [email protected]. Any opinions expressed in this article are those of the author, and do not necessarily reflect those of Flaster Greenberg PC.

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October 18, 2019
U.S. warns Turkey over offshore drilling near Cyprus

By David Brunnstrom and Renee Maltezou

ATHENS (Reuters) – There are rules in exploring energy resources in the Mediterranean Sea, U.S. Secretary of State Mike Pompeo said on Saturday, warning Turkey not to engage in drilling activity that is “illegal” and “unacceptable”.

“We’ve made clear that operations in international waters are governed by a set of rules. We’ve told the Turks that illegal drilling is unacceptable and we’ll continue to take diplomatic actions to … ensure that lawful activity takes place,” he said during a visit to Greece.

“No country can hold Europe hostage,” Pompeo told a press briefing.

Tensions between Cyprus and Turkey over offshore drilling have intensified after Ankara sent a drilling ship to an area already licensed by Nicosia to Italian and French energy companies.

Earlier on Saturday, Greek Prime Minister Kyriakos Mitsotakis urged the United States to use its clout to defuse tensions in the Eastern Mediterranean, where Cyprus and Turkey are locked in a dispute over offshore rights.

Mitsotakis told Pompeo that Turkish moves south of the island in recent days were a “flagrant violation” of Cyprus’ sovereign rights.

Turkey and Greece are allies in NATO but long at loggerheads over Cyprus, which has been ethnically split between Greek and Turkish Cypriots since 1974.

“The United States have a particular interest in the Eastern Mediterranean region. Cyprus is only asking for the self-evident, the implementation of international law,” Mitsotakis told Pompeo, who is visiting Greece on the last leg of a trip to southern Europe.

Pompeo referred to the issue after meeting Greek Foreign Minister Nikos Dendias. He said the United States would work to help the parties involved find mutually agreeable solutions and that it was eager to extend its partnership with Greece on energy issues.

Ankara says some of the areas where Cyprus is exploring are either on its own continental shelf or in zones where Turkish Cypriots have equal rights over any finds with Greek Cypriots.

A Turkish drill ship, the Yavuz, is currently 50 nautical miles off Cyprus. Turkish Energy Minister Fatih Donmez said on Saturday that drilling would start “as soon as possible”.

In his remarks, Pompeo also said that the relationship between Greece and the United States “has truly never been stronger” and that he was very confident that Greece can be a pillar for stability in this region.

But he also added that he was concerned about Chinese investments in infrastructure, an issue also raised during his visit to North Macedonia on Friday. Greece and the United States have traditionally close relations even though many blame Washington for its tacit support to a military junta that ruled Greece between 1967 and 1974. Protest marches to the U.S. Embassy are an annual event.

As Pompeo visited town, groups of protesters marching to the U.S. Embassy on Saturday clashed with police, who fired teargas to disperse them.

Earlier, several hundred demonstrators had gathered in Athens’s main Syntagma square, chanting “Americans, Murderers of Peoples” to protest against the amendment of a defense agreement between the two countries concerning U.S. military bases in Greece.

They held banners reading “Pompeo go home – No to the Greece-USA agreement”.

(Additional reporting by Ali Kucukgocmen and Alkis Konstantidis; Writing by Michele Kambas; Editing by Kirsten Donovan and Frances Kerry)

October 6, 2019
Turkey: Erdogan Appears Willing to Trade Economic Risk for Political Gain

Turkey: Erdogan Appears Willing to Trade Economic Risk for Political Gain

(Stratfor)

The Big Picture

A number of converging events recently have increased the risks to economic and political stability in Turkey. Even so, as Stratfor’s Third-Quarter Forecast pointed out, the Turkish government will maneuver among its numerous domestic and external problems, calculating that it can withstand the pressure from both its own constituency and foreign powers.

Representatives from each of the European Union’s members met July 10 to discuss the bloc’s options for sanctioning Turkey after it decided to send a second drillship into disputed waters around Cyprus on a hydrocarbon exploration mission. They considered possible actions including suspending some $150 million in EU funding earmarked to pave the way for Turkish accession to the bloc, suspending some European Investment Bank programs in Turkey and canceling high-profile meetings between EU and Turkish officials. On July 15, EU foreign ministers are expected to make a formal decision over which, if any, of those options to exercise. According to Cypriot media, the government in Nicosia sees these sanctions as a starting point and warned that new measures (such as targeted sanctions against companies and individuals) could be taken in the future.

Why It Matters

The threat of impending EU sanctions comes at a time when a number of other blows could damage Turkey’s already creaky economy. The European Union is Turkey’s most important trade partner, and Ankara values maintaining productive economic ties with the bloc. Despite that, Ankara is tempted by the economic value of any oil and gas discoveries the ships might make. Besides, the exploration itself serves to solidify Turkish claims to the Eastern Mediterranean waters that it alone recognizes and, in its defiance of international norms, appeals to nationalist sentiment in Turkey. In turn, that will shore up domestic political support for embattled President Recep Tayyip Erdogan, who is still trying to recover from the surprising defeat that opposition parties inflicted on his Justice and Development Party (AKP) in some former AKP strongholds in the recent municipal elections. Turkey’s relationship with the United States faces a similar risk of sanctions over the impending delivery of S-400 air defense missile systems from Russia. But neither threats that U.S. sanctions could be imposed against the Turkish defense industry nor that Turkey could be kicked out of the joint development program for the F-35 fighter jet have changed Ankara’s mind about acquiring the Russian hardware. Despite the threats from Washington and the damage the purchase would cause to its relationship with other NATO allies, Turkey calculates that the boon to its diplomatic sovereignty and the technology transfer rights that come along with the S-400 purchase will be worth it.

With Erdogan’s political popularity in danger, he has apparently made the calculation that his need to solidify support among his political base is worth the economic risk.

Erdogan’s unorthodox approach to monetary policy has given rise to another threat to the Turkish economy. He had long pushed for Turkey’s central bank to cut interest rates to boost economic growth, no matter the effect on the lira, and this week, he moved to make his wish a reality. After the president of Turkey’s central bank spurned Erdogan’s entreaties to slash the country’s prime rate yet again, the president fired him and named a compliant loyalist as a replacement. He now has a team in place at the bank much more likely to bow to his wishes, despite the chance that rate cuts could send Turkey’s fragile currency value down (in turn adding to the private sector’s sizable debt picture). The move has stirred anxiety among the foreign investors and the domestic industries on which Turkey’s economy depends.

Finally, there is a more distant threat of potential future penalties that Turkey could face if it has been found to have had dealings with Iran or Venezuela in defiance of the current U.S. sanctions regime. After all, a Turkish bank aided Iranian oil-smuggling efforts under Obama administration sanctions. If it comes to light that Turkish entities have repeated that history, economically damaging punishment could certainly follow.

Context

Certainly, Turkey has taken actions in the past to strengthen its own sovereignty and nationalist policies. With Erdogan’s political popularity in danger, he has apparently made the calculation that his need to solidify support among his political base by pursuing strongman policies in the Eastern Mediterranean, with the United States and at home is worth the economic risks. Former AKP loyalists are now openly discussing a splinter party that could threaten Erdogan’s hold on parliament, giving this strategy to staunch the bleed of domestic political capital a new urgency. Turkey’s rate of inflation has improved somewhat in recent months after the country entered a recession in the last quarter of 2018.

Dates to Watch

July 15: Expected EU decision on sanctions and penalties on Turkey. Countries along the Balkan migration route, including Hungary, Bulgaria, Croatia and Slovenia, could be reluctant to authorize tough sanctions on Turkey out of fears that Ankara could retaliate by withdrawing from the immigration agreement it reached with the European Union in 2016, unleashing a flood of refugees bound for Europe.
July 25: The Turkish central bank holds a monetary policy committee meeting. Considering the recent changes in bank leadership, an interest rate cut is widely expected.

July 11, 2019