The American Interest
Analysis by Walter Russell Mead & Staff
Israel: Coping with Its Gas Bonanza

An article in the Financial Times illustrates an important theme we follow here at Via Meadia: the geopolitical and economic shifts as the new energy realities of the 21st century sink in.

As the FT puts it,

Experts are convinced that Tamar and Leviathan will not be the last big Israeli discoveries. They point to the US Geological Survey, which estimates that the subsea area that runs from Egypt all the way north to Turkey, also known as the Levantine Basin, contains more than 120 trillion cubic feet of natural gas. Israeli waters account for some 40 per cent of the total. Should these estimates be confirmed through discoveries in the years ahead, Israel’s natural gas reserves would count among the 25 largest in the world, on a par with the proven reserves of Libya and ahead of those of India and The Netherlands. For decades a barren energy island, forced to import every drop of fuel, Israel today stands on the cusp of an economic revolution, fuelled by the vast riches that lie below its waters.

As we’ve written earlier, the offshore gas and oil story, compelling as it is, may only be part of Israel’s new energy picture. Reports of vast shale oil deposits under the tiny country suggest that energy wealth will be a mainstay of the country’s economic and political future. Already countries like Canada, India and Russia are showing interest in deeper energy cooperation with the Jewish state; expect more to follow if these discoveries pan out.

Published on September 2, 2012 10:02 am