Natural GAS Israel's Game Changer: After Discovering Natural Gas Offshore, Israel Is Poised to Become an Energy Exporter. It's a Big Deal
Fletcher, Martin, Moment
IT wasn't long ago that Israel's oil and gas industry was the territory of wishful thinkers like John Brown, a born-again Christian from Texas who saw a map to oil gushers in readings of the Bible. In the 1980s, I interviewed his site manager, also a born-again Christian, who told me that the Lord had bequeathed oil to his chosen people. In a cluttered cabin in the hills of central Israel, the rangy Texan leafed through his copy of the Bible and read me Deuteronomy 33:24: Of Asher he said, More blessed than sons is Ashen May he be favored by his brothers, and may he dip his foot in oil.
Asher and his descendants hadn't found oil, the prospector said, but they just didn't know where to look--or have the tools we have today. For guidance, he indicated another verse, Deuteronomy 32: 12-13: The Lord alone guided him, and there was no foreign god with him. He made him ride on the high places of the earth, and he ate the produce of the field. And He made him suck honey from the rock, and oil from the flinty rock.
"High places--rock--there's oil here somewhere," the prospector continued, throwing his arms wide to include all the hills and forests and distant sea. However, after years of searching the desert and rocky wastes, he confessed: "Maybe I got it wrong. Maybe they meant olive oil."
Israel is blessed in the olive oil department, but from its founding had no choice but to import all of its energy--oil, gas and coal. Golda Meir often joked that God had guided the Jewish people through the desert to the only land in the Middle East with no oil. To date, little onshore oil has been found, although there is still hope. But after many failed attempts by offshore drilling companies, a young Israeli lawyer named Gideon Tadmor got it right. Egypt, he theorized, had discovered commercial quantities of natural gas in the Mediterranean, and there was no reason the gas fields would stop at Israel's maritime border.
In 1991, Tadmor, who had always wanted to be an entrepreneur, founded Avner Energy with his uncle, David Cohen. "When I finished law school I gave the diploma to my mother. I told her, 'Now hang it on the wall and leave me--let me live my own life."
Today, looking back, justifiably smug and a good deal wealthier, the 50-year-old Tad-mor partly echoes the faith of his Christian predecessors: "Obviously we needed luck and God's help. We needed the resources to be underground. But I think the unique contribution that we were able to bring is the human spirit and belief."
More than that, Tadmor needed experience and money, and because he wanted to drill deep into the seabed, far offshore, he sought investment from the Texan oil giants. Nobody bit; they were afraid, he believes, of upsetting their much bigger customers, the Arabs. Finally a small Houston-based company, with no Arab clients, known today as Noble Energy, agreed to supply most of the capital, the drilling technology and the analytic skills needed to interpret seismic data used to determine good places to drill.
Tadmor's company, with partners Noble and the Israeli Delek Group, found several small gas fields and then two large ones, propelling Israel into a new energy realm: Today, Israel's known gas reserves are 30 trillion cubic feet (tcf), and the United States Geological Survey (USGS) says there's at least twice that amount still to be discovered in Israeli waters. That exceeds Israel's energy needs for the next 30 to 50 years. Moreover, the USGS predicts there are 1.7 billion barrels of oil gas basins as well.
Tadmor and his partners control almost all the gas, but there is no doubt that the new energy industry will revolutionize Israel's economy, as well as provide the country with greater strategic and political clout. But the new discoveries have also opened up a Pandora's Box of thorny social, financial, security and foreign policy concerns.
IN 2009, Tadmor and Noble hit upon their first "gusher," the Tamar reservoir (9 tcf), 56 miles off Israel's coast. …