Regular readers know that I have been keeping an eye on Israel’s bright energy future. (Links at bottom.)
This week we have Lawrence Solomon writing in the Financial Post about Israel’s massive 238 sq km Shefla Basin shale discovery. Shefla holds the world’s second largest shale deposits outside the United States, from which around 250 billion barrels of oil – about the same as Saudi Arabia’s proven reserves, could be extractable.
Solomon’s piece focuses on the impressive team of oil experts backing the project, the new, environmentally friendly process that Israel is looking to employ, and the political ramifications of Israel becoming an energy superpower.
The article only touches upon Israel’s equally large gas (and possibly oil) discoveries off the coast of Haifa, Leviathan and Tamar. They are among the world’s biggest recent gas finds, have already moved into the development stage, and should be coming on line within the next few years.
Shefla, Leviathan and Tamar, promise in the Hula Valley, new massive solar plants, and other sites and technologies are all pointing towards Israel becoming a major player in the 21st century energy game.
Currently, most of the world’s energy is in the hands of anti-Western authoritarian regimes (Arab and Iranian totalitarians, Venezuela, Brazil, Russia…) who use the energy card to forward anti-American, anti-Western, and anti-Israeli policies. And since the United States has decided to commit energy suicide by choosing not develop its massive oil, gas, coal, and shale reserves, Israel may well prove to be the country that will flip the table over and bring about the end of the decades-old energy death grip on the West. As Solomon states, some 38 countries have an estimated 4.8-trillion barrels of shale oil, many of which would benefit from the shale oil technology now being pioneered in Israel.
It looks like Israel will be “a light unto the nations” in more ways than one.
Financial Post (h/t elderofziyon)- In the first 25 years after Israel’s founding in 1948, it was repeatedly attacked by the large armies of its Arab neighbours. Each time, Israel prevailed on the battlefield, only to have its victories rolled back by Western powers who feared losing access to Arab oilfields.
The fear was and is legitimate – Arab nations have often threatened to use their “oil weapon” against countries that support Israel and twice made good their threat through crippling OPEC oil embargoes.
But that fear, which shackles Israel to this day, may soon end. The old energy order in the Middle East is crumbling with Iran and Syria having left the Western fold and others, including Saudi Arabia, the largest of them all, in danger of doing so. Simultaneously, a new energy order is emerging to give the West some spine. In this new order, Israel is a major player.
The new energy order is founded on rock – the shale that traps vast stores of energy in deposits around the world. One of the largest deposits – 250 billion barrels of oil in Israel’s Shfela basin, comparable to Saudi Arabia’s entire reserves of 260 billion barrels of oil – has until now been unexploited, partly because the technology required has been expensive, mostly because the multinational oil companies that have the technology fear offending Muslims. “None of the major oil companies are willing to do business in Israel because they don’t want to be cut off from the Mideast supply of oil,” explains Howard Jonas, CEO of IDT, the U.S. company that owns the Shfela concession through its subsidiary, Israel Energy Initiatives. Jonas, an ardent Zionist, considers the Shfela deposit merely a beginning: “We believe that under Israel is more oil than under Saudi Arabia. There may be as much as half a trillion barrels.”
Because the oil multinationals have feared to develop Shfela, one of the world’s largest oil developments is being undertaken by an unlikely troop. Jonas’s IDT is a consumer-oriented telecom and media company that is a relative newcomer to the heavy industry world of energy development. Joining IDT in this latter-day Zionist Project is Lord Jacob Rothschild, a septuagenarian banker and philanthropist whose forefathers helped finance Zionist settlements in Palestine from the mid-1800s; Michael Steinhardt, a septuagenarian hedge fund investor and Zionist philanthropist; and Rupert Murdoch, the octogenarian chairman of News Corporation who uncompromisingly opposes, in his words, the “ongoing war against the Jews” by Muslim terrorists, by the Western left in general, and by Europe’s “most elite politicians” in particular.
Where others would have long ago retired, these businessmen-philanthropists have joined the battle on Israel’s side. While they’re in it for the money, they are also determined to free the world of Arab oil dependence by providing Israel with an oil weapon of its own. The company’s oil shale technology “could transform the future prospects of Israel, the Middle East and our allies around the world,” states Lord Rothschild.
To win this war, Israel Energy Initiatives has enlisted some of the energy industry’s savviest old soldiers – here a former president of Mobil Oil (Eugene Renna), there a former president of Occidental Oil Shale (Allan Sass), over there a former president of Halliburton (Dick Cheney). But the Field Commander for the operation, and the person who in their mind will lead them to ultimate victory, is Harold Vinegar, a veteran pulled out of retirement and sent into the fray. Vinegar, a legend in the field, had been Shell Oil’s chief scientist and, with some 240 patents to his name over his 32 years at Shell, revolutionized the shale oil industry.
Before oil met Vinegar, this was dirty business, a sprawling open mine operation that crushed and heated rock to yield a heavy tar amid mountains of spent shale. The low-value tar then needed to be processed and refined. The bottom line: low economic return, high environmental cost.
Vinegar boosted the bottom line by dropping the environmental damage. No open pit mining, no spent shale, no heavy tar to manage. In his pioneering approach, heated rods are inserted underground into the shale, releasing from it natural gas and light liquids. The natural gas provides the project’s need for heat; the light liquids are easily refined into high-value jet fuel, diesel and naphtha. The new bottom line: oil at a highly profitable cost of about $35-$40 a barrel and an exceedingly low environmental footprint. Vinegar’s process produces greenhouse gas emissions less than half that from conventional oil wells and, unlike open pit mining, does not consume water. The land area from which he will extract a volume of oil equivalent to that in Saudi Arabia? Approximately 25 square kilometers.
Although the Israeli shale project is still at an early stage, its massive potential and Vinegar’s reputation have already begun to change attitudes toward Israel. “We have been approached by all the majors,” Vinegar recently told the press, and for good reason. “Israel is very well positioned for oil exporting” to both European and Asian markets.
The majors have other reasons, too, for casting their eyes afresh at Israel. Through its natural gas finds in the Mediterranean’s Levant Basin, and with no help from the oil majors, Israel is becoming a major natural gas exporter to Europe. According to the U.S. Geological Survey, the Levant Basin has vast natural gas supplies, most of it within Israel’s jurisdiction.
Attitudes to Israel in some European capitals – those in line to receive Israeli gas — have already warmed and the shift to Israel may in time become tectonic, in Europe and elsewhere, when oil is at stake – 38 countries have an estimated 4.8-trillion barrels of shale oil, many of which would benefit from the shale oil technology now being pioneered in Israel. Speeding that shift could be the Arab Spring, which many fear will flip pro-Western Arab states into hostile camps. Long time U.S. ally Saudi Arabia is reportedly so distrustful of the U.S. following its abandonment of long-time Egyptian ally, President Hosni Mubarak, that it has pulled back its relationship with the West in favour of China. (whole thing >>)
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G-d says to Israel, “…let them suck honey out of the crag, and oil out of the flinty rock.” – Deuteronomy 32:13