Lord Jacob Rothschild and Rupert Murdoch have invested in an Israeli venture to
produce oil from bituminous-bearing rock (shale) in the Elah Valley in the
Judean Hills. Last week, they acquired 11 percent in equal shares of Genie
Energy Corporation unit Genie Oil and Gas Inc. for a total of $11
million.
Genie Energy, a subsidiary of IDT Corporation, is the parent
company (89%) of Israel Energy Initiatives Ltd., which holds an exclusive
shale-oil exploration and production license covering 238 square miles in the
Adulam district, which is between Beit Shemesh and Beit Guvrin. The company
believes its shale-oil cracking technology can free the world from dependence on
Arab oil and turn Israel into an energy powerhouse able to produce 300 billion
barrels of non-conventional oil at a cost of up to $40 per barrel.
RELATED:
Securities Authority mum on planned oil, gas rules
Knesset to debate tax plans proposed by Sheshinski C'tee
Genie
Energy comprises IDT Energy,which resells electricity and natural gas to
customers in New York, and Genie Oil and Gas Inc. Genie Oil and Gas Inc., which
received the $11m. investment, consists of American Shale Oil Corporation
and the 89% stake in Israel Energy Initiatives.
Negotiations with
Rothschild and Murdoch began six months ago, and Rothschild visited Israel
during that time. Genie is involved in similar projects in Colorado and
Mongolia.
IEI president Effie Eitam, a former national infrastructures
minister, told Globes that IEI hopes to obtain a permit from the regional
planning and building commission within days to carry out a pilot shale-oil
project on a six-dunam site in the Elah Valley.
Local residents strongly
oppose IEI’s venture. They fear possible environmental damage from the drilling.
Residents claim that the drilling will harm the Adulam District’s vistas and
nature, as well as its vineyards.
In response to the residents’ claims,
Eitam said Rothschild was persuaded that the venture would cause no
environmental harm, at least in the pilot stage.
“Rothschild has a strong
history of supporting the environment,” he said. “He asked a great many
questions on this point and was persuaded that when the pilot is completed in
two years, very few question marks will remain.” Rothschild said: “Rupert
Murdoch’s extraordinary achievements speak for themselves, and we are very
pleased he has agreed to be our partner. Genie Energy is making good
technological progress to tap the world’s substantial oil-shale deposits, which
could transform the future prospects of Israel, the Middle East and our allies
around the world.”
Murdoch said: “Covering and distributing news has been
my life’s work. If Genie’s effort to develop shale oil is successful, as I
believe it will be, then the news we’ll report in the coming decades will
reflect a more prosperous, more democratic and more secure world.”
In
July 2008, IEI obtained its shale-oil exploration license from the National
Infrastructures Ministry. Under the license terms, the company has to launch a
pilot project to produce 500 barrels of oil in the Elah Valley by mid-2011. The
project will heat shale strata at a depth of 300 meters to a temperature of 300
degrees for two years.
|