Case Competition Encourages Student Involvement, Real-World Problem Solving

The Belfer Center’s Geopolitics of Energy Project challenged students across the Harvard and MIT communities to develop a strategy to solve the case, “New Finds of Energy in the Eastern Mediterranean: Cause for Conflict or Cooperation?” as part of the project’s second annual energy policy case competition held at the Harvard Kennedy School (HKS) on April 19.

The winners were José Ramón Morales Arilla and Sergio Guerra who won $250 and will visit the U.S. Department of State next month to brief Deputy Assistant Secretary of State for Energy Diplomacy Amos J. Hochstein on their proposal. The Arilla-Guerra team was one of 23 teams that entered the competition.

Judges included Meghan O'Sullivan, who heads the Geopolitics of Energy project and organized the event; Georges Sassine, Lebanon energy policy expert and HKS 2009 Alum; Leonardo Magueri, Geopolitics of Energy senior fellow; Nusret Comert, Royal Dutch Shell Group; and Shai Feldman, director of Brandeis University's Crown Center for Middle East Studies.

Details on the case competition:

The Challenge

In March 2013, U.S.-based energy company Noble Energy discovers a supergiant natural gas field beneath the Mediterranean seabed. Though Noble is drilling on behalf of Israeli interests, the discovered gas field – dubbed “Goliath” – is determined to extend into Lebanese and Cypriot waters as well. Given the potential for enormous windfall profits and the opportunity to shift geopolitical power in the region, each of the countries lays claim to Goliath. While Israel and Cyprus are enjoying warming relations, Lebanon and Israel are technically still at war. To further complicate matters, the long-standing dispute between Cyprus and Turkey looms over negotiations, with Turkey vowing to reject any deal negotiated by Greek Cypriots. They claim the benefits should fall upon the entire island, including the Turkish Republic of Northern Cyprus, which is officially recognized only by Turkey.

These nations ask the United States to mediate the dispute and help them reach an equitable agreement to move forward. The challenge for the US State Department is to formulate a solution between these four parties that addresses both geopolitical concerns as well as commercial concerns of drilling rights and cooperation – all the while evaluating how the situation impacts U.S. interests.

The Proposed Solution

In the short run, US should confirm to all parties its willingness to serve as a mediator in negotiations, delaying any public statements and actions until elections in Cyprus and Lebanon have taken place (Early 2014). In the medium run, US should propose the creation of the Eastern Mediterranean Energy Commission (EMEC) between Cyprus, Lebanon and Israel. The instance would be responsible of defining and collecting a unique regional take on operations, and distributing receipts according to agreed guidelines. An even split of the shares corresponding to disputed territories between Israel and Lebanon should be suggested. For extractive operations, we propose Noble Energy as an essential player for all activities in the Goliath Gas Field and we suggest that all gas be exported to or through Turkey.

This approach was based on the idea of the Revenue Sharing Agreement between Sudan and South Sudan preceding southern independence in July 2011.