Israel Energy Initiatives still hopes for oil-shale pilot project

CEO frustrated that proposal for Shfela basin hydrocarbon exploration ‘deemed defective and non-comprehensive.’

By
September 28, 2014 00:22
Zoharim

IEI's exploratory oil shale drilling site at Zoharim. (photo credit: SHARON UDASIN)

Despite a sweeping vote that bulldozed their oil-shale pilot project earlier this month, Israel Energy Initiatives executives are reluctant to abandon the potentially immense hydrocarbon reverse in the country’s Shfela basin.

“We only feel stronger today than we did six years ago that the resource is there, that we have a technology that works,” said Geoffrey Rochwarger, vice chairman of Genie Energy, the New Jersey-based parent company of IEI.

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Rochwarger, who is also CEO of Genie Israel Holdings and Afek Oil and Gas, met with The Jerusalem Post a week ago to discuss the future of IEI and the oil-shale reserves in the Shfela basin, following the rejection of the company’s proposal for a pilot-drilling program in the region.

The company had aimed to prove the viability of about 40 billion barrels of oil found within their license zone in the southern-central Israel location through the pilot project.

Had the pilot phase been approved, the company planned to drill one production facility and extract about 500 barrels of oil on a small plot within its 238 square-kilometer license zone. Only if the project proved successful, would the government then deliberate about pursuing a full commercial phase.

While the developers voiced hopes of securing energy independence for Israel by extracting the oil, environmentalists slammed the plans as detrimental to the surroundings.

The Interior Ministry’s Jerusalem District Committee, directed by Dalit Zilber, turned down the project in a 13 to one vote, with two abstentions, on September 2.

IEI had been waiting for authorization to begin the pilot project since completing exploratory trials for its technology in 2011, but faced delays due to environmental opposition and regulatory changes such as regulations issued in 2012 that tightened drilling procedures.

In what it described as an environmentally friendly process, the company would have drilled some 400 m. below the Shfela’s surface to the shale layer, using heating wells to heat the shale up to 300 degrees centigrade over three years for in-situ extraction.

IEI scientists stressed that a 200-m. layer of impermeable rock separates the shale and the aquifer below, however, green groups expressed concern about the region’s sensitivities and argued that such tools had never before been operated to extract oil shale on a commercial scale.

The only person on the committee to vote in favor of the plan was the National Infrastructure, Energy and Water Ministry representative.

“We need to take a step back and analyze the decision that was made,” Rochwarger told the Post. “It’s very important to us not to emotionally react.”

Moving forward, there are a number of avenues the company might choose to take such as trying anew; applying again with alternative locations; examining other channels for exploration; and analyzing the regulatory proceedings.

Most frustrating, Rochwarger said, is the fact that the company withstood a six-year process that in the end was fruitless. He and his colleagues are questioning the legitimacy of the process itself, speculating that they may have been misled in their project application.

Rochwarger’s complaints are strongest regarding the handling of the mandatory environmental- impact study the company submitted to the committee.

With the study split “into two parts,” Rochwarger said he was told an initial hearing would occur on the first two sections, after which the company would be assigned a preferred site to implement a full-environmental assessment.

Such an impact study is traditionally divided into five sections, with A and B containing broader environmental impacts, offering technological assessments and providing location alternatives, while C through E delve deeper into site-specific details.

Much of the official decision recently released by the committee deals with the environmental inadequacies the committee members said they identified in the A and B sections.

The committee members detailed several different reasons for their rejection, the first of which involved the “high value” of the land involved, which they describe as “characterized by an extraordinary wealth of unique and sensitive values of nature, landscape, culture, history, archeology, heritage and recreation” that overlaps with national parks and agricultural land.

Avgad Meiri, permitting and licensing manager for IEI, criticized the committee members for taking issue with the fact that the land in question is zoned as agricultural territory. Because the application was filed by way of the Petroleum Law, and not through planning and building legislation, temporary drilling projects are permitted without rezoning land, he explained.

In addition to raising the issue of the land’s value, the committee members said they rejected the plans due to “the lack of proper examination of alternative locations in the license zone.”

Nearly all of the alternatives examined, the document explained, were located in a small cluster in the northeast portion of the license zone, which is environmentally sensitive and highly scenic.

The company’s most preferred option was located approximately 650 m. northeast from Ela junction, while the second option was near the Tarkumiya checkpoint.

Defending their selections of these two locations from an environmental perspective, Meiri stressed that the Ela spot is located on previously disturbed land and near an area designated to become an interchange.

The Tarkumiya spot, meanwhile, overlaps with the location of a potential future train depot that may connect Gaza with Hebron, he said.

But calling the examination of alternative locations “defective and non-comprehensive,” the committee members said it was impossible to determine optimal placement of a pilot project based on the review process that took place.

A third explanation the committee members highlighted in their rejection was the “lack of data regarding environmental impacts that might be caused by the pilot.”

The decision particularly referred to the position of the Environmental Protection Ministry, which found that many questions were left unanswered about the extent of expected emissions to the air, water and land, as well as ground stability.

Although acknowledging that the Water Authority representative to the committee supported the project application, the committee members said they felt “it is not possible to ensure with certainty that the pilot will not cause pollution to the groundwater.”

A fourth reason behind the rejection was the “lack of substantial correlation between the pilot and future activities,” according to the decision.

For example, the committee members cited the fact that the pilot program would have involved vertical drilling, while a commercial phase would rely on horizontal drilling.

To this concern, Rochwarger responded that “the vast majority of wells are drilled throughout the world” horizontally, and he would have agreed to perform a small horizontal run during the pilot stage. In addition, he said, the particular technology has worked successfully in seven prior pilots in North America.

Nonetheless, the committee members maintained that the pilot would fail “to supply the necessary answers for making decisions on the transition to the next stages of the project.”

Aiming to clarify the issue regarding the submission of Chapters A and B versus Chapters C through E, the committee decision stressed that the members “considered the stance of the applicants that the environmental impacts would be examined in detail in the following chapters of the environmental document.”

Nonetheless, they argued that the applicants were required “to present information regarding environmental impacts, with a detailed reference to uncertainty factors” in Chapter B as well.

“Detailed environmental information was supposed to appear before the committee already at this stage of the discussion,” the decision said.

Meanwhile, an expert in Israel’s planning field told the Post on Thursday that such is the process that always occurs when the country’s planning and building committees review proposals. First, the developers must submit Chapters A and B, to which the committee members can respond negatively or affirmatively. Only after an affirmative response does the discussion proceed to an additional stage, which includes a review of Chapters C through E, the source said.

Representatives of IEI argued that the planning process does not always involve a submission of Chapters A and B first.

According to amendment 47 to the Petroleum Law, approved in 2012, an application for approval of oil drilling requires the submission of an environmental document, prepared in accordance with the Energy and Environment ministries. The document requires a detailed assessment of the impacts on water resources, land, air, sea, nature and the landscape, as well as a description of the search methods, storage process, location and review of alternatives.


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