Libyan oil accounts for less than 2 percent of world oil production, yet the
revolt against Muammar Gaddafi has managed to shoot up the price of oil to more
than $100 per barrel in the last month.
No one knows how long the
internal instability in the Middle East will last, but according to the US
Department of Energy, its share of the world’s total oil supply is expected to
actually increase in the years ahead.
Simply, the world is using up the
reserves of non- Middle East oil more quickly. Moreover, of the trillion barrels
of proven reserves still left, according to the CIA roughly 800 billion barrels
are to be found in the Middle East and North Africa, especially in Saudi Arabia,
Iran and Iraq.
The implications for Israel of the West’s growing
dependence on Middle Eastern oil are troubling, for obvious reasons. Yet there
are two new developments in our energy sector that could well offset these
trends and eventually alter our standing in the world, especially with respect
First, the gas discoveries in the Eastern Mediterranean, which
began to produce commercial quantities of natural gas in 2004, are generally
well-known. The Tamar field, which should begin production in 2013, is expected
to supply all of Israel’s domestic requirements for at least 20 years. The
Economist suggested in November 2010 that the recently discovered Leviathan
field, which has twice the gas of Tamar, could be completely devoted to
All the undersea gas fields together have about 25 trillion
cubic feet of gas, but the potential for further discoveries is considerably
greater, given that the US Geological Survey estimates that there are 122
trillion cubic feet of gas in the whole Levant Basin, most of which is within
After the Leviathan discovery these numbers could
go up further. Perhaps for that reason, Greece has been talking to Israel about
creating a transportation hub for distributing gas throughout Europe from the
Eastern Mediterranean that will come from undersea pipelines.
less well-known, but even more dramatic, is the work being done on this
country’s oil shale. The British-based World Energy Council reported in November
2010 that Israel had oil shale from which it is possible to extract the
equivalent of 4 billion barrels of oil. Yet these numbers are currently
undergoing a major revision internationally.
A new assessment was
released late last year by Dr. Yuval Bartov, chief geologist for Israel Energy
Initiatives, at the yearly symposium of the prestigious Colorado School of
Mines. He presented data that our oil shale reserves are actually the equivalent
of 250 billion barrels (that compares with 260 billion barrels in the proven
reserves of Saudi Arabia).
Independent oil industry analysts have been
carefully looking at the shale, and have not refuted these findings. As a
consequence of these new estimates, we may emerge as the third largest deposit
of oil shale, after the US and China.
OIL SHALE mining used to be a dirty
business that used up tremendous amounts of water and energy.
technologies, being developed for Israeli shale, seek to separate the oil from
the shale rock 300 meters underground; these techniques actually produce water,
rather than use it up.
The technology will be tested in a pilot project
followed by a demonstration stage. It will be critical to demonstrate that the
underground separation of oil from shale is environmentally sound before going
to full-scale production. The present goal is to produce commercial quantities
of shale oil by the end of the decade.
This particular project has global
For if Israel develops a unique method for separating oil
from shale deep underground, that has none of the negative ecological
side-effects of earlier oil shale efforts, that technology can be made available
to the whole world, changing the entire global oil market. The effect of the
spread of this technology would be to shift the center of gravity of world oil
away from Iran, Saudi Arabia and the Persian Gulf to more stable states that
have no history of backing terrorism or radical Islamic causes. (In the Arab
world, Jordan and Morocco have the most significant oil shale deposits.) WHEN
WILL the West begin to treat Israel as a powerful energy giant and not as a weak
client state that must be pressured? In the case of the Saudis, when the US
realized the true extent of their oil reserves, after America’s reserves in
Texas and Oklahoma were depleted by World War II, it sought to upgrade its
military and diplomatic ties with the Saudi kingdom even before its production
capacity was fully exploited. The US-Saudi connection grew as massive
infrastructure investments for moving Saudi oil to Western markets were made,
like the Trans-Arabian Pipeline (TAPLINE).
More capital was needed for
the Saudi oil project. US companies, like Standard Oil of New Jersey (today,
Exxon) and Standard Oil of New York (Mobil), joined Texaco and Standard Oil of
California, the original holder of the Saudi oil concession, and created the
ARAMCO consortium in the late 1940s. ARAMCO executives came to be regular guests
at the State Department, where they could present the Saudi
In time, Saudi Arabia’s status grew as its future position
in world oil came to be appreciated.
In the case of Israel, updated
international reports verifying the true dimensions of both its undersea gas and
oil shale should be forthcoming in the next year.
Many more international
companies are likely to take an interest in its energy sector at that time.
Moreover, the full exploitation of these energy resources will require massive
infrastructure investment for pipelines, liquified natural gas plants and new
oil exporting outlets in the Mediterranean and Red Sea.
uniquely situated by its geographical position and is able to direct its energy
exports to either Europe or China and India. It may not have the capital to
build this export capacity, but the involvement of foreign investors in these
projects will give European and American banks new interests in
Western policies will not change overnight. Nonetheless,
Israel needs to tell the full story of its newly emerging role in the world
energy sector if it wants to begin to alter the way it has been handled
internationally.The writer is president of the Jerusalem Center for
Public Affairs and served as ambassador to the UN.