Discovery of Natural Gas in Israel is a World-class Game Changer
Submitted on June 22, 2010 – 1:59 am
The massive natural gas find in Israel and political tensions with Turkey, could put Turkey out of the energy story with Israel. It’s a big deal, says Washington based energy analyst Gal Luft.
A door has been closed. But amid the roar, the creak of an opening window was faintly audible. This window, a gigantic deposit of natural gas called Leviathan, 6.5 times the size of Tel Aviv, was found, roughly 100 nautical miles from where the flotilla fiasco took place and well within Israel’s extended territorial waters.
This discovery may provide Israel with security in terms of its supply of electricity, turn it into an important natural gas exporter and provide a shot in the arm of some $300 billion over the life of the field – one-and-a-half times the national GDP – to the Israeli economy, already one of the most resilient in the world.
More importantly, this discovery is nothing short of a geopolitical game changer.
To understand its magnitude, consider this: The world’s biggest gas discovery in 2009, 238 billion cubic meters, was made by a US-Israel consortium at a site called Tamar, 60 miles off the coast of Haifa. The nearby Leviathan field is estimated to be twice that size.
Altogether the basin in the eastern Mediterranean to which those fields belong could contain an amount of gas equivalent to one-fifth of U.S. natural gas reserves. For a small country like Israel, such a bonanza could not have come at a better time.
Until recently, Israel was facing an energy predicament. Its fast-growing population – and the even faster-growing Palestinian Arab population to which it also supplies electricity – and the declining reserves of Egypt, its main gas supplier, required the identification of new sources of gas for electricity production.
One alternative was to import natural gas from Russia and the Caspian Sea via Turkey. To this end, Turkey and Israel negotiated the construction of a subsea pipeline. But with the deterioration of their relations, this option gradually became unfeasible. Another option was to import gas from Qatar, hardly a reliable supplier. Yet a third, more costly, possibility was construction of a liquefied natural gas terminal, which would enable imports from various suppliers.
The discoveries at Tamar and Leviathan solved the problem: Israel will no longer have to import natural gas. Its dilemma now, rather, is deciding where to export the excess and how to reap the most geopolitical gains from its new status as an energy exporter.
Ironically, the biggest casualty of such an energy corridor will be none other than Turkey, which now enjoys an unchallenged status as an energy bridge between East and West. Energy transit fees are an important source of income to the Turkish economy.
In the coming years, Israel will have to decide whether to direct its gas to Asia or to compete with Turkey over access to the European gas market. Should it choose the latter, Turkish-Israeli relations will remain in rough seas.
Submitted on June 22, 2010 – 1:59 am
The massive natural gas find in Israel and political tensions with Turkey, could put Turkey out of the energy story with Israel. It’s a big deal, says Washington based energy analyst Gal Luft.
A door has been closed. But amid the roar, the creak of an opening window was faintly audible. This window, a gigantic deposit of natural gas called Leviathan, 6.5 times the size of Tel Aviv, was found, roughly 100 nautical miles from where the flotilla fiasco took place and well within Israel’s extended territorial waters.
This discovery may provide Israel with security in terms of its supply of electricity, turn it into an important natural gas exporter and provide a shot in the arm of some $300 billion over the life of the field – one-and-a-half times the national GDP – to the Israeli economy, already one of the most resilient in the world.
More importantly, this discovery is nothing short of a geopolitical game changer.
To understand its magnitude, consider this: The world’s biggest gas discovery in 2009, 238 billion cubic meters, was made by a US-Israel consortium at a site called Tamar, 60 miles off the coast of Haifa. The nearby Leviathan field is estimated to be twice that size.
Altogether the basin in the eastern Mediterranean to which those fields belong could contain an amount of gas equivalent to one-fifth of U.S. natural gas reserves. For a small country like Israel, such a bonanza could not have come at a better time.
Until recently, Israel was facing an energy predicament. Its fast-growing population – and the even faster-growing Palestinian Arab population to which it also supplies electricity – and the declining reserves of Egypt, its main gas supplier, required the identification of new sources of gas for electricity production.
One alternative was to import natural gas from Russia and the Caspian Sea via Turkey. To this end, Turkey and Israel negotiated the construction of a subsea pipeline. But with the deterioration of their relations, this option gradually became unfeasible. Another option was to import gas from Qatar, hardly a reliable supplier. Yet a third, more costly, possibility was construction of a liquefied natural gas terminal, which would enable imports from various suppliers.
The discoveries at Tamar and Leviathan solved the problem: Israel will no longer have to import natural gas. Its dilemma now, rather, is deciding where to export the excess and how to reap the most geopolitical gains from its new status as an energy exporter.
Ironically, the biggest casualty of such an energy corridor will be none other than Turkey, which now enjoys an unchallenged status as an energy bridge between East and West. Energy transit fees are an important source of income to the Turkish economy.
In the coming years, Israel will have to decide whether to direct its gas to Asia or to compete with Turkey over access to the European gas market. Should it choose the latter, Turkish-Israeli relations will remain in rough seas.
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