Will Israel Be the Next Energy Superpower?

[This is a very long and informative article]

By Arthur Herman, COMMENTARY

They will feast on the abundance of the seas, and on the treasures of the sands

—Deuteronomy 33:19

Tamar sits 56 miles off the coast of Israel, an offshore gas platform rising up from the Mediterranean like a white steel beacon whose roots reach down 1,000 feet to the seabed. Named for the natural-gas field beneath the sea floor, Tamar is the symbol of a bright future for Israel if Israel is ready for it: as the newest energy producer and exporter in the Middle East, and potentially the most important.

A classic quip since the creation of the state of Israel in 1948 has been that Moses brought his people out of Egypt to the one spot in the Middle East that didn’t have oil. “We proved that joke to be wrong,” says Gideon Tadmor, chairman of the Delek Group, one of a consortium of companies that built the Tamar platform. Delek and its partners began extracting gas from Tamar in March 2013 and has been doing so with the natural gas from three other fields as well. Ten years ago, Israel was a country 80 percent powered by coal, with the remaining 20 percent from oil—all of which had to be imported. Now, natural gas supplies half those energy needs. The known fields could contain more than 900 billion cubic meters of natural gas. In global terms, that’s not much—roughly the amount the United States consumes in a year. But for a country of only 8 million people, it’s an energy bonanza. And, according to the U.S. Geological Survey, the Levant basin in which Israel’s fields sit may contain a total of 3.5 trillion cubic feet of natural gas—about half the reserves in the United States with a fraction of the demand.

Nor is that all. Even before the first discoveries of natural gas in 1999, geologists had determined there were huge oil-shale fields stretching along Israel’s coastal plain. Those fields contained recoverable reserves, according to the latest estimate, of up to 250 billion barrels—almost equal to Saudi Arabia’s.

In short, Israel is poised not only for future energy independence, but for becoming a major regional energy player—maybe even, if it uses its resources wisely, the next energy superpower. The looming question, however, is not whether the world is ready for Israel to be the next Texas. It’s whether the Israelis are ready.

I got my introduction to the Tamar platform, and to Israel’s adventure in becoming an energy player, even before my wife, Beth, and I arrived in Israel, on the plane from Newark bound for Tel Aviv. The passenger sitting next to us looked as if he was headed for a country-music festival. He wore a baseball cap with the logo of Noble Energy—one of the key players in the natural-gas revolution. We learned he had spent 30 years in the oil and gas business as a platform operator, including in West Africa and Thailand, before Noble had sent him out to Israel. Now he works on the Tamar platform. After 28 days there, he’ll head home to Louisiana for four weeks to see his family and kids; they will be able to afford college thanks to the money he’s earned working for Noble in Israel.

He also pointed out his fellow workers on the plane scattered among the Orthodox and Hasidic passengers—“roughnecks” (members of a drilling crew), “tool pushers,” and mechanics. They all hailed from Texas, Oklahoma, and his native Louisiana, and one or two wore baseball caps with Hebrew lettering. These are the migrant laborers of Israel’s newest industry, and proof of how much Israel depends on the United States for exploring, drilling, and developing its new-found energy resources. That may change as Israel’s talent for innovation gets focused on energy technologies; Israelis themselves may accelerate the transition to faster, more efficient, and environmentally safer exploitation of both deep-water gas reserves and what are called the “unconventional oil sources,” meaning oil shale and oil sands.

Indeed, it is in oil shale that the story of Israel’s energy revolution really begins.
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