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Israel’s Natural Gas Windfall Greeted With Excitement, Caution at Tel Aviv Conference

Israel’s massive, newly discovered natural gas fields have opened up vast diplomatic and economic possibilities for the Jewish state. The country is poised not just to improve its economy but its ties with some of its eastern Mediterranean neighbors.

The significance of the finds was discussed by energy experts and executives at a Tel Aviv conference Thursday.

“Israel’s gas story is also a story of the eastern Mediterranean,” said Yossi Abu, CEO of Delek Drilling. The company is an energy giant, and is one of the developers of Leviathan, Israel’s biggest known gas field.

“The main opportunities [for improved relations] are with Jordan and Turkey. With just a 10-mile pipeline we could offer desperately needed gas to Jordan,” Abu told an audience at the Institute for National Security Studies.

“As for Turkey, gas could serve as a bridge to a better relationship,” he said, gesturing to the poor bilateral ties between the two countries which have emerged since Turkish Premier Tayyip Erdogan took power a decade ago. Moreover, he said, a pipeline to Cyprus could make the island country – an Israeli ally with its own offshore gas fields – Israel’s export base for the lucrative European market. The booming markets of East Asia could be supplied through Israel’s Red Sea port of Eilat.

Both the Tamar and Leviathan fields, discovered in 2009 and 2010 respectively, were developed by a consortium of four Israeli energy firms and Houston-based Nobel Energy. The energy reserves from Tamar can supply Israel with gas for two decades. Leviathan could secure the country’s energy needs for decades more once it goes online in 2017. Experts have estimated that Israel’s newfound energy independence will save the country $3.6 billion a year.

More significantly, Leviathan will turn Israel from a net gas importer to a net gas exporter. Israel has long imported most of its natural gas from Egypt, but Egypt backed away from export obligations last year.

Few blessings, however, are entirely cost-free. Gas facilities make a tempting target for Israel’s enemies, and the country’s Navy – for decades the smallest of the IDF’s three service branches – will require extra spending and attention.

Even in matters of economics, the fractious politics of the Levant are never far away. Turkey and Cyprus continue to quarrel over the four-decade Turkish occupation of northern Cyprus, and over the demarcation of the two countries’ maritime border. Any sign of Israeli-Cyprus cooperation, therefore, is liable to raise eyebrows in Ankara.

And while Cyprus and Lebanon have marked their maritime borders (Cyprus and Israel have as well), Lebanon has accused Israel of exploring gas fields in its sovereign maritime space. The absence of any Israeli-Lebanese ties makes the dispute harder to resolve.

Even the raucous politics of Israeli democracy have contributed to stalling the development of export infrastructure. Labor chief Shelly Yachimovich and Dov Khenin of the far-left Hadash party have urged that more gas should be set aside for domestic use rather than export. Environmental Protection Minister (and former defense minister) Amir Peretz has raised concerns over the potential environmental impact of gas exploration and refinement.

A government committee on natural gas has met for two years straight without a resolution. On Thursday the committee acceded to public pressure to release 2,000 pages of protocols to prove it hasn’t just been wasting government time and tax money.

The Israeli caution became a source of good-natured teasing at the conference. Dr. Ahmet Kasim Han of Istanbul’s Kadir Has University noted the dynamic:

Boker tov (Good morning). My admiration for the Jewish People – which was already high – is increasing,” he said. “You react to the prospect of getting rich with panic and warnings for caution. I think that is admirable and sound – I wish you the best with your gas resources and hope it incentivizes cooperation between our countries.”

One expert visiting from Washington told The Tower that Israelis must be careful not to let endless debate lead to missed opportunities.

“The new government appears to be opening up everything to debate and allowing everyone to be part of the conversation.  This won’t make for quick nor probably good decisions,” Simon Henderson, director of the Gulf and Energy Policy Program at the Washington Institute for Near East Policy, told The Tower.

“It reminds me of a New England public square,” he said. “Everyone may believe they’re an expert, but one must leave battle strategy to the generals.”

[Photo: UK in Israel / Flickr]