Tuesday, 1 January 2013
2013: The Start of Israel’s Energy Independence


Tamar Natural Gas Project Israel                                                          Israel-Jordan Oil Shale Map

Source Nobel Energy, Inc.

At a holiday season gathering with neighbors at my Florida condominium on the Emerald Coast, I was asked about whether Israel would be here 25 years from now.  I answered  Israel may be surrounded by Islamic fundamentalists on all of its land borders and face threats of its destruction from Iran. However, I told them that the Jewish nation would survive and even thrive as a light to the nations of the world.  I cited the classic joke that when G-d parted the waters of the Sea of Reeds and the ancient Hebrews passed dry shod to the Sinai, escaping the pursuing Egyptians,  they made a wrong turn. They should have turned right to pick up all of that Saudi oil instead of turning left to enter the promised land of milk and honey.   They chuckled.  I commented that the joke is on the hoary joke.  

I noted that the mainstream media has neglected to inform the American public of Ha Shem’s great gift to Israel, the huge offshore natural gas fields about to begin production and the pilot tests of in situ oil extraction from the shale formation in the Shefla basin in 2013.  Those Israel oil shale reserves might even rival those of Saudi Arabia.   The development of these energy resources may enable Israel within this decade to become energy independent.  Those offshore gas and on-shore oil shale developments have the potential of making Israel an energy independent political power in the Middle East and player in the world energy markets. The energy developments could pour billions of royalty revenues into a newly authorized  Sovereign Wealth Fund that might significantly enhance the country’s high tech driven growth. Most importantly it would also provide the funds to enable the IDF to meet the threats arrayed against it.

We have written a number of Iconoclast and NER articles about both of these energy developments: Among them were: "Could Israel’s Oil Shale Development be a Game Changer in World Geo-Politics?" ( June 2011), "Israel’s Black Gold- an Interview with Scott Nguyen" [ of Israeli Energy Initiatives" (IEI)] (October 2011) and "Will Israel Win the Energy Prize in the Levant basin?"(December 2011)  

In the waning days of 2012, two  key  announcements  of energy developments in Israel  augur well for making 2013 the start of Israel’s  drive for energy independence and wealth creation.  

On December 24, 2012, the high court in Israel turned down a petition that would have prevented the start of a pilot oil shale extraction project for Israel Energy Initiatives (IEI), the subsidiary of NYSE-listed, Genie Energy, Ltd. (GNE).  Note what this RTT report  said about this Israeli high court decision:

The Supreme Court of Israel has rejected a petition filed by the Israel Union for Environmental Defense against various ministries of the State of Israel, Israel Energy Initiatives and another Israeli oil and gas company, seeking to cancel the regulations governing the permitting process of oil and gas exploration, and seeking to cancel the exploration license granted to Israel Energy Initiatives.

In October, the court had rejected a previous petition filed by the Union challenging the issuance of exploratory licenses, including Israel Energy Initiatives’ license, issued pursuant to those regulations.

“The court’s latest decision clears a major legal roadblock and enables this nationally important project to move forward to the permitting phase,” Israel Energy Initiatives said in a statement.

Israel Energy Initiatives said that it now looks forward to the issuance of regulations by the Ministry of Energy that will enable it to prepare the environmental documents needed to file its pilot test permit application with the Jerusalem District Planning Committee.

This development clears the way for IEI’s pilot tests in the Shefla basin.  Dr. Scott Nguyen, Vice President for Technology  at  IEI in our published  NER interview noted  what will ensue given this important Israeli court decision:

Nguyen: The test phase will be conducted in 2012, once we have received permits and approvals from the Planning Committee in Jerusalem. In 2013 we will have our first drop of Israeli oil from shale in Israel, and the test phase will end in 2014. After that, we'll start planning for commercial scale production. Our first goal is to get 50,000 barrels per day, i.e. one fifth of the Israeli market, both civil and military.

Next, we will continue on a larger scale. Israel has enough resources to be fully independent. We could provide 250,000 barrels per day by the next decade. Towards the end of this decade, we will be able to deliver 50,000 barrels per day, and increase slowly to 250,000 barrels per day. This is a project that requires significant investment to reach that production target.

Nguyen’s IEI senior colleague Dr. Harold Vinegar, former chief scientist  and a 30 year veteran of unconventional oil developments at Shell Oil in Houston,  discussed  their development  at  a  Globes  Israel Business Conference in mid-December 2012.  Dr. Vinegar discussed why Israel’s oil shale formation lends itself to non-polluting oil extraction and the significance of the Shefla basin oil production technology.  He noted why the start of natural gas deliveries from Israel’s offshore platforms is an important complement. The gas would be used to heat the shale for release of oil at an efficient market price of less than $40 a barrel. A veritable win-win situation.

The Elders of Ziyon blog in a post noted that Dr. Vinegar   said,  “another Middle Eastern country that doesn't have much in the way of traditional oil reserves is also sitting on top of huge oil shale deposits”:

Jordan has approximately 40-80 billion tons of oil shale (about 34 billion barrels of shale oil) that could last for over 900 years at current consumption, said a top official at an Estonian company tapping the Kingdom's reserves of oil shale.

Watch this You Tube video of Dr. Vinegar’s briefing  on  IEI oil shale development project:

The Israeli high court decision on December 24, 2012  cleared the way for the IEI/Genie Energy Shefla Basin project.  
Next was the announcement of natural gas production from the Tamar platform located 24 kilometers offshore of Ashkelon in the Mediterranean Exclusive Economic Zone of the Jewish nation. The Tamar natural gas well cost the equivalent of $3 billion to develop.  On December 30, 2012, Globes reported the start up Tamar production flowing onshore to Israel in April 2013:

"The Tamar project is the greatest production platform in Israeli history," said Minister of Energy and Water Resources  Dr. Uzi Landau at Friday's inauguration of the Tamar natural gas field production platform.
[ . . .]
Landau said that these remarks were backed a few days ago by Israel's supreme economic authority, Governor of the Bank of Israel Prof. Stanley Fischer, who revised upwards his 2013 growth forecast for Israel on the strength of gas production from Tamar. He added, "Natural gas will not only make electricity production more efficient, cleaner, and cheaper, it is a giant step toward freeing us from dependence on foreign energy sources, especially Arab oil. Although the reservoirs are located thousands of meters below the seabed, as far as the possibility of exploiting them is concerned, the sky's the limit."
[. . .]
The gas produced by the platform from wells located 90 kilometers west of Haifa will flow to the Ashdod terminal via a 150-kilometer 16-inch undersea pipeline.

In a statement, the Tamar partners - Noble Energy Inc. (NYSE: NBL), Delek Group subsidiaries Avner Oil and Gas LP (TASE: AVNR.L) and Delek Drilling LP (TASE: DEDR.L), Isramco Ltd. (Nasdaq: ISRL; TASE: ISRA.L), and Dor Alon Energy in Israel (1988) Ltd. (TASE:DRAL) Alon Natural Gas Exploration Ltd. (TASE: ALGS) - said, "Inauguration of the platform is an important step toward the flow of natural gas to Israel from the Tamar well.” .. This is the realization of the vision and dream of the developers behind Israel's largest ever infrastructure project. The production of natural gas from the Tamar well brings Israeli closer to energy independence for the first time since the country was founded, and will save billions of shekels, partly from the conversion of electricity production to natural gas."

The  Tamar partners starting production of offshore natural gas in 2013 should boost the prospects of the IEI/Genie Energy pilot test and the future of oil shale development in the Shefla Basin. The combination of offshore natural gas production coupled with on-shore oil shale extraction is a geo-political game changer for Israel and the world energy markets.  These developments in late 2012 marked the beginning of Israel’s long sought energy independence further enhancing the country’s economic growth and stability.

Posted on 01/01/2013 6:02 PM by Jerry Gordon
2 Jan 2013
Send an emailjohn galt

Nice thing is you cna buy shares in all these companies.

NBL - Boble Energy

GNE - Genie

Plus all the Israeli companies.

So, make money on Israeli energy and thumb your nose at the Muslim countries that expected Israel to grovel and pay for their oil. Paybacks are hell.