The Leviathan natural gas field, which has been under development for the past few years in the Mediterranean off the coast of Israel, has just gone into production. Israel has thus officially become an energy-exporting nation, changing the economy of the Jewish state and the Middle East. Haaretz explains.
“Delek Drilling, which is leading the project with Texas-based Noble Energy, said in a statement that it had received approval from the ministry and will begin gas production on December 31.
“Production was delayed earlier this month for a couple of days until a court lifted a temporary injunction granted over environmental concerns.
”The field’s discovery in 2010 helped turn Israel into a potential energy exporter. The project’s partners have already signed major, multi-billion dollar export deals to Egypt and Jordan.”
For most of its existence, Israel has been an energy importing nation. The country used to receive oil and gas imports from Iran during the reign of the Shah. After the Islamic Revolution of 1979, the United States stepped in to ensure that the Jewish state received the fossil fuels that it needed to remain a functioning country. The discovery of natural gas offshore has changed Israel’s status of dependency on fuel from the outside to energy self-sufficiency. Now Israel is exporting natural gas to former enemies such as Egypt and Jordan.
Israel is also on the verge of penetrating the European natural gas market, thanks to a new pipeline deal with Greece and Cyprus, made at the expense of Turkey. The Turkish Islamist regime of Recep Tayyip Erdogan has been increasingly hostile to Israel in recent years. The Bloomberg expounds further.
“The 1,900-kilometer (1,181 miles) link will connect recently discovered gas fields in the eastern Mediterranean basin with European markets through Greece and Italy. The project is being developed by IGI Poseidon SA, a joint venture of Greece’s state-owned supplier Depa SA and Edison SpA. Italian Prime Minister Giuseppe Conte is set to sign the agreement at a later date.
“Depa also signed on Jan. 2 with Energean Oil & Gas Plc a letter of intent for the potential sale and purchase of 2 billion cubic meters of natural gas per year from Energean’s fields offshore Israel. The deal is considered a step for the project’s commercial viability and its realization.”
While Turkey is miffed because it is excluded from the deal, the European Union has given it it’s blessing. The Israel deal will diversify Europe’s imports of natural gas, making it less dependent on Arab, Iranian and Russian sources of the most environmentally benign fossil fuel, a consideration in a time of fears about climate change. Natural gas, abundant because of hydraulic fracking, has become a relatively cheap way of generating electricity.
An article in Forbes from 2019 suggests that Israel’s natural gas, besides being an economic boom for the Jewish state, has become an engine for creating economic and political ties with other countries. Besides Egypt, Jordan, and Europe, Iraq could be a customer, cutting out Iranian sources and thus tightening the economic sanctions that the United States has imposed on the Islamic Republic.
In return, Israel will receive $20 billion in royalties and save $9 billion which otherwise would have been spent buying natural gas from foreign sources. That immense amount of money can then be used to invest in Israel’s growing high tech sector.
The explosion of Israel’s natural gas sector will also have environmental benefits. It has allowed Israel to switch from coal to gas, reducing pollution levels by 48 percent. Israel’s commercial and public vehicles will run on natural gas, while its privately-owned cars will eventually be electric.
Of course, Israel’s new-found riches would be at risk during any military conflict. Its infrastructure of offshore platforms and pipelines would be a tempting target for terrorist groups such as Hezbollah, Hamas, ISIS, and Al Qaeda. Defending that infrastructure will constitute a new problem for Israel’s defense establishment.
Still, the opportunities that Israel’s natural gas wealth brings include fostering peace through economic trade.
“Israel has been blessed with new natural gas discoveries, including the latest announced this week by Greek oil and gas developer Energean. The findings have not just reshaped Israel’s electricity portfolio but they could also potentially alter the region’s geopolitical dynamics. Former enemies, in fact, may become trading partners and go on to form long-lasting economic ties.”
Peace through trade in the Middle East would give enormous benefits for the United States as well, suggest several analysts.