A few months ago we discussed the Israeli company Better Place whose electric car concept is on the verge of revolutionizing the auto industry. I enjoy discussing these topics because technological advances bolster Israel’s economy, including its real estate market. More importantly, these issues help us see the hand of G-d moving the pawns on the global chess board.
In the spirit of “now I’ve seen it all,” Israel is poised to become a leading fuel exporter. In 2004, Israel discovered a significant gas field named “Tamar” in the Eastern Mediterranean. Tamar is expected to pump enough oil to supply all of Israel’s domestic requirements for at least 20 years. In 2010, another gas field aptly dubbed “Leviathan” (Hebrew for whale) was discovered, which is at least double the size of Tamar.
Less well-known but potentially more dramatic is Israel’s burgeoning oil shale industry, led by Israel Energy Initiatives (IEI), which is owned by the American telecom company IDT. There has recently been a spate of articles written on this issue in major global papers including The Times of London, The Australian and The Jerusalem Post. In November 2010, banker Lord Jacob Rothschild and Rupert Murdoch purchased an 11% stake in Genie Oil & Gas, the parent company of IEI. Furthermore, Genie's advisory board includes such luminaries as Michael Steinhardt and former vice president Dick Cheney. This is big stuff.
Late last year, IEI presented data showing Israel’s oil shale reserves at the equivalent of 250 billion barrels. To put that in context, Saudi Arabia, the second largest oil-producing country in the world, has proven oil reserves totaling 260 billion barrels. If IEI’s numbers prove out, Israel will emerge as having the third largest oil shale deposits, after the US and China.
Problems and Solutions
Shale oil has historically been environmentally problematic because the mining process requires tremendous amounts of water and energy. Yet new technologies being developed seek to separate the oil from the shale rock hundreds of meters below the earth’s surface using a process that actually produces water, rather than using it up. If Israel can develop an ecologically friendly method for separating oil from shale, that technique can be exported to other shale oil-rich countries, thereby shifting our oil reliance away from countries such as Iran and Saudi Arabia.
Updated reports verifying the scope of Israel’s gas and oil shale inventory will be forthcoming within the year. Other existing challenges will have to be overcome, but the prevailing sentiment is that Israel has a good chance, paraphrasing former Israel ambassador to the UN Dore Gold, “to become a powerful energy giant, and not a weak client state that must be pressured.”
“My Israel Home” is a real estate agency focused on helping people from abroad buy homes in Israel. To explore purchasing opportunities, you may contact Gedaliah at email@example.com.