Open Blogger
Ace of Spades HQ
8/13/2011
The standing joke among Jews is, “If we’re the Chosen People, why didn’t God promise us some land with OIL under it?” As it turns out, He did.
Recent discoveries — over the past several years — put the amount of natural gas reserves in Israeli territorial waters at as much as 26 trillion cubic feet. That’s roughly triple what Israel will consume over the next 20 years, meaning much of it can be exported. But compared to Egypt’s 77 tcf of gas reserves, Israel’s natural gas discoveries are not quite Earth-shaking.
Currently, Israel imports coal for domestic electricity, supplemented since 2004 by natural gas from the offshore Mari-B field twenty-five miles from the southern port of Ashdod. More gas comes from Egypt, arriving near Ashdod via an undersea pipeline. Indeed, despite the excitement over the Leviathan field, Israel signed a new twenty-year gas purchase agreement with Egypt earlier in December to supply several industrial entities, including the Dead Sea Works and the Haifa refinery.If the riches of the Leviathan field are confirmed, production could begin by 2016. In that scenario, Israel could eventually become a net energy exporter despite still needing to import oil to refine into gasoline and other products. Apart from notional energy independence, using natural gas from its own fields would save Israel $4 billion in imports annually while boosting gross national product. Plentiful indigenous hydrocarbon supplies could also prompt the development of new industries. For the time being, though, Israel must resolve a variety of problems before it can begin reaping the full benefits of the new discovery.
However, Israel sits atop another energy resource: oil shale. Up until the end of 2010, it was believed that Israel had about 4 billion barrels of oil in extractable oil shale. Given that the Saudis produce just under 10 million bbl/day, those 4 billion bbl are equivalent to about 400 days of Saudi Arabia’s production. But new discoveries of oil shale in Israel and new techniques of extraction put the latest estimates of available oil from Israeli shale at 250 billion bbl – just shy of Saudi Arabia’s proven reserves of 260 billion bbl…
…Moreover, Israel is developing extraction techniques that take the oil out of the shale while the shale remains underground, at per-barrel costs of $20 or less. What would it mean to the world if Israel were able to produce oil at rates similar to Saudi Arabia? …
Read the complete article at Ace of Spades HQ
