Podcast: Play in new window | Download

Subscribe: Apple Podcasts | Android | RSS

At the end of December 2010, a huge natural gas discovery was confirmed in the Eastern Mediterranean inside Israel?s territorial waters.  It is called the Leviathan gas deposit in the Levant Basin and marks a major development for Israel, with the potential for making Israel an energy exporter over the next decade.  Natural gas was first discovered off Israel?s coast in 1999, but the quantity was so small that until recently, Israel was still planning on importing natural gas from Russia.  The Leviathan field, discovered by a consortium led by Houston-based Noble Energy, is the world?s largest offshore gas find in the past decade and makes Israel now among the ranks of the world?s largest gas reserve holders in the world.  [Possibly, the Leviathan field may contain a world-scale oil deposit as well.]

According to Michael Makovsky of The Weekly Standard, the Leviathan could provide Israel with anywhere from 50-200 years of gas, at current levels of consumption.  In a few years, Israel will no longer need gas from Egypt, which from 2008 has provided 16% of Israel?s electricity and 40% of its natural gas needs.  There are also numerous other effects of this astounding discovery and change in Israel?s energy position in the world.

1. This find will eliminate Israel?s need to import coal, which burns twice as much carbon as natural gas.  Israel is already working on the development of gas and electricity-powered vehicles.  Infrastructure spending and foreign investment in Israel will therefore rise.
2. Later this decade, Israel could actually become an exporter of natural gas, more than likely to Europe.  This would no doubt be done through converting the gas to liquefied natural gas (LNG) and shipping it by tanker.  A large LNG terminal will need to be built somewhere on Israel?s Mediterranean coast, or perhaps on Cyprus.
3. As Makovsky shows, Leviathan will enhance Israel?s strategic position in at least two important ways:  (1) LNG exports could encourage improved political ties with potential buyers (e.g., Greece, other European nations and other strategic Mediterranean posts such as Cyprus.  Cyprus is a critical island in the Eastern Mediterranean, with which Israel is already negotiating a maritime border demarcation and a joint agreement to develop an LNG facility.)  (2) Its greater wealth and energy independence will make Israel less vulnerable to outside pressure.  This is a crucial point because Israel now finds itself virtually surrounded by terrorists?Hezbollah, Hamas and to the East, Iran.  Its border with Egypt to the south has been secure for 30 years but with the new regime emerging in Egypt it is less certain that this border will remain secure.  Israel?s concern about Turkey could be reduced.  Turkey was once a close ally but has recently become closer to Iran.
4. But this discovery could also make Israel more vulnerable.  If hostilities were to break out with Hezbollah to the north, Hezbollah would no doubt use its rockets to hit Israel?s gas facilities.
5. The Levant Basin, where this gas discovery was made, is only partially a part of Israel.  The Basin is shared by Gaza, Lebanon, Cyprus and the Turkey-dominated Turkish Republic of Northern Cyprus.  It is quite likely that disputes about drilling and ownership of this Basin will emerge.  In that sense, this discovery will only exacerbate the tension in the region.
6. Israel?s natural gas and its likely new exporting power will have quite an impact on Russia.  Israel?s gas exports to Europe would compete with and lead to reduced demand for Russian gas, and thereby reduce Russia?s political influence in Europe.  Makovsky writes:  ?And since Israel?s gas exports would be priced by the gas market, they would further erode Russia?s beneficial gas export pricing, which has been uniquely pegged to oil prices, which are higher than gas prices.  This entire issue could increase tensions with Russia.  The Bible speaks of a power to the north of Israel, which, as we approach the end times, will become Israel?s bitter enemy.  That power will also lead a coalition of nations that will invade Israel from the north.  This natural gas discovery and the impact it will have on Russia?s economy indicates again how important events in the Middle East are to the rest of the world.  Leviathan gives Russia another reason for interest in Israel.

Therefore, no matter how one examines the Leviathan discovery, it is a monumental event in the history of modern Israel.  It could emerge as one of the most decisive factors determining Israel?s future.