Israel to Join OPEC?

Israel to Join OPEC?

An enterprising American named Gideon Tadmor has made a discovery which will put Israel seriously on the energy production map. 30 trillion cubic feet of natural gas reserves, not 50 miles off the coast of Israel, set the tiny Middle Eastern nation in a position to, if not actually join OPEC, certainly compete with them. Even better, for the one nation in the region absolutely aligned with American interests, the USGS says there is at least twice that much, still to be discovered.

There was a time when Israel was thought to be the only country in the Middle East without its own oil. For the entire history of the small nation it has been required to import all its natural gas needs, which it used primarily to generate electricity. The 2009 discovery of all that natural gas could not have come at a better time for Israel. Back in 2005 the Israelis had signed a 15 year agreement with the government of Egypt, to buy natural gas. A deal which went completely south when the “Arab Spring” meant the pipeline traveling through the Sinai became a popular target for Islamic saboteurs.

Israel was suffering electrical shortages which were only stemmed by importing natural gas via tanker. Israel has no coal reserves, nor does it have any nuclear or hydroelectric plants. That level of “energy dependence” has been a serious drain on the nation’s economy, until Tadmor’s wells started pumping. Now, Israel is supplying the bulk of its own natural gas needs, fulfilling up to 40 percent of its total electrical power usage. Israel does not need to join OPEC, OPEC needs to join Israel!

Amazingly, the news gets even better: 17 trillion cubic feet of natural gas, called the “Leviathan reservoir” has been discovered just 80 miles off the coast. The Leviathan reservoir should start pumping some time in 2017, which will allow Israel to become a major exporter of natural gas. For a nation not much larger than Massachusetts at 20,770 square kilometers, with a population larger than Washington State’s at 7,707,000 people, Israel can certainly use the money.

Israel to Join OPEC?Naturally, the leadership in Israel is excited about the windfall. Current plans involve the little nation keeping 60 percent of the natural gas for itself, then exporting 40 percent to turn a profit. Initial estimates put that profit figure at roughly $60 billion in taxes and other royalties. Which, all things considered, will be a boon to every man woman and child living in the country, in light of the world’s current economic woes.

There are some within the Israeli cabinet who fear most of that windfall will be spent on the nation’s military. Israel spends almost 20 percent of its yearly budget on defense, a figure which is larger than any other Western nation. Given the country’s location, and the fact that all of its bordering and close neighbors are Islamic nations who want to “wipe Israel off the map,” their greater than normal defense spending is understandable.

One of the smallest kids on the block in a neighborhood which absolutely hates him, can be forgiven for wanting to carry the biggest stick. Perhaps if Israel were to join OPEC, the other kids might stop picking on him.

By Ben Gaul

Sources:

Slate      CIA Factbook     New York Times

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