Geopolitical scrimmage over Israel’s Gas Bonanza

An article I wrote a couple months ago... long before we knew how the balance of power will shift and its effects on the region's energy resources. Enjoy...

In an ironic twist of fate, Israel could perhaps become a major Middle East energy producer. Now that we know the news is as reliable as it is optimistic, Israel has discovered one of the world’s largest offshore natural gas fields – with deposits estimated to meet Israel’s energy needs for the next 100 years, and then some.
The gas find has the potential to strengthen Israel’s energy security, enable her to become an important gas exporter and contribute wealth to her economy. At the same time, an energy independent Israel would trigger serious implications for regional realignment and stability.

The massive natural gas field – totalling 450 billion cubic meters – is located off the coast of Haifa in Israel’s north. Named Leviathan, after a biblical whale, the gas field straddles the maritime borders of Israel and Lebanon. The announcement has sent the Tel Aviv stock exchange skyrocketing to a new record high as claims were made that the gas in the new oil field could well be worth approximately US$95 billion.

The Leviathan find raises the chances of other major discoveries in the region, and could impel neighbouring countries, including Cyprus, Lebanon and Syria, to explore and possibly develop their own potential gas fields.

Yet energy disputes are already shaking regional relations. Since the gas discoveries, Hezbollah is snarling that Israel wants to rob oil from Lebanese territorial waters and has threatened military action if Israel taps into what it deems Lebanese energy resources.
Iran, seeking to expand its influence into the Levant, has already offered to help the Lebanese develop their potential energy wealth. So too have the Russians, further complicating the geopolitical scrimmage that’s developing over Israel’s gas bonanza.

Concurrently, Greece and Cyprus have hosted high-level discussions on the topic with Israeli leaders – it has led to recently signed maritime zoning agreements between Israel and Cyprus and could possibly lead to a pipeline from Israel to Greece. It is interesting to note that Israel recently acquired ‘air space’ permission from Greece for its air force drills, after she was suddenly denied fly rights over Turkey. Perhaps gas might be the next modern link between the two ancient civilisations.

Should a pipeline be built, Italy and Greece would be particularly eager customers, as most Europeans are unhappy with their over-reliance on Russian energy. However the most affordable option for Israel to export its new wealth is through an existing pipeline through Turkey. If Turkey were to return to its friendly relations with Israel, it would profit from highly lucrative income in transit fees, and thus would re-examine their Israel stance after news of the Leviathan discovery.

Whether foreign companies are prepared to risk investing in such a violence-prone region is questionable, particularly since Israel’s adversaries don’t want to see her strengthened by her newfound energy wealth at the expense of her neighbours.

It is not unimaginable that, in the next regional war, Israeli and Lebanese military elements could target the other's natural gas drills. There is already the worrying concern that Hezbollah could shoot missiles at an oilprocessing plant, causing enormous damage. Additionally, Hezbollah presents a serious naval menace with its submarine and navy commando units, trained by Iranians. Israeli Minister for Infrastructure Uzi Landau cautioned Lebanon if it tried to interfere with Israeli drilling, declaring that Israel would not hesitate using force. If this scenario ever plays out its course, it has the potential to cause a regional ecological catastrophe.

Among the gushing torrent of hyperbolic hopes, ambitious export and alliance-building plans, and aggressive threats from envious neighbours, Israel must “act correctly, level-headedly and responsibly,” as stated by MK Uzi Landau. As the gas boosts Israel’s economic growth, it will lower her energy costs by
US $1 billion annually, while creating jobs for hundreds of engineers and labourers in ensuring domestic distribution.

No doubt Israel’s transition to gas, while being environmentally friendlier than coal, will include dramatic political battles with trade unions and industry lobbyists. However, this exciting find means that Israel, with a long history of dependence on foreign energy, and hostility and boycotts from many of the biggest energy powers, could find herself in a much more advantageous position in the coming decade.