Israel Giddy over New Offshore Gas Find

Article excerpt

The confirmation last week of the largest underwater discovery of natural gas in a decade off Israeli shores is stirring hopes that Israel could become energy independent.

For decades, Israelis searched for energy in vain. The promised land for oil and gas, most assumed, lay elsewhere in the Middle East.

But the confirmation last week of the largest underwater discovery of natural gas in a decade off Israeli shores has made many in the Jewish state dizzy with talk of becoming a global energy power possessing reserves worth tens of billions of dollars.

Despite major export hurdles and the fact that the offshore fields represent less than 1 percent of worldwide gas reserves, the finds are being hailed as a crucial pillar for the local economy with the potential to shift the geopolitical balance relative to oil- rich Middle Eastern neighbors like Saudi Arabia.

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"Israel has always been seen as a desert country that scratches out a living first by agriculture and then by high tech, but never an economic powerhouse, and always dependent on outside sources for energy,'' says Gerald Steinberg, a political science professor at Bar Ilan University. "This changes those conditions significantly.''

Energy independence?

Last Wednesday, the exploration venture between Houston-based Noble Energy and Israel's Delek Energy Systems Ltd., announced that its Leviathan underwater field contained some 18 trillion cubic feet of gas. Less than two years ago, the partners found 8 trillion cubic feet of gas in the near by oil field of Tamar.

Energy experts say the natural gas from Leviathan and Tamar is enough to supply Israel's domestic market for decades, eliminating a dependence on foreign energy sources. That's a sea change from the 1970s, when Israel was hemmed in by an economic boycott of Arab countries and forced to rely on expensive and unpredictable oil purchases on the international spot market.

Delek owner Yitzhak Tshuva quickly declared "a day of celebration for all of us. The state of Israel is an energy independent country."

A global exporter of gas?

The finds are substantial enough that they have also fueled speculation that there will be enough gas left over to export to Mediterranean neighbors like Italy and Greece.

The Israeli financial daily Globes suggested that countries as far away as South Korea and Japan might be interested in purchasing the gas reserves, giving the Jewish state newfound economic and political leverage. …

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