History of mankind has always been witnessing the “quest for fire”, the vital concern of supplying and controlling the energy sources.
The world energy mix
Sun was the primary source available to each and every one, thus no dispute was possible. The invention of fire, with which human race protected himself against wild animals, cooked the food necessary to keep him alive, crafted tools and weapons, bringing heat and illumination, is, without any doubt, the starting point of the quest we are still living in our modern era.
Then came coal. For long time, it had been the primary source of energy for the basic needs and began to be widely used to fuel merchantile ships and warships. On the eve of World War I, Winston Churchill, then First Lord of the Admiralty, made a historic decision to shift the power source of the British Navy’s ships from coal to oil : he was intending to make his fleet faster than the Germans. But that decision also implied that Royal Navy would be dependant to insecure oil supplies outside the territory (in that case, Persia) unlike the coal from Wales.
Then natural gas was added to the energy mix and its stake rapidly grew since it was cleaner and more efficient fuel. Other emerging energies appeared, like biofuels, hydrogen, fuel cells, coal-to-liquids and gas-to-liquids. This diversification was necessary because of the negative impact of coal, oil and gas on environment, but moreover because of the location of the highest reserves in instable regions like the Middle East. In the meantime, industrial revolution and growing population of the planet had increased tremedously the need of energy. Geopolitics of energy became an important part of the diplomacy of dependent countries with rapidly growing vulnerability.
It seems today that the fossil fuels (mainly oil and gas) will continue to dominate the primary energy fuel mix in the coming decades and their geographical distribution will always be a decisive factor, giving rise to conflicts and big power struggles, including wars and invasions, to secure and control their production, their transportation routes and their trade.
At the end of 2009, the world primary energy consumption was dominated by fossil fuels : oil (34.8%), coal (29.3%) and gas (24.1%) wheras nuclear energy stood only for 5.4%. An outlook on the fossil fuels shows that 60% of the world recoverable oil reserves are located in the Middle East, region which also hosts 41% of world recoverable gas reserves. A scenario of the International Energy Agency shows an increase of 1.5% in energy demand per year till 2030 and fossil fuels remaining dominant sources at the end of the cycle, accounting for almost 77%.
Israël and the geopolitics of natural resources
It is not rational to analyze any global or regional project, including production facilities or transporting routes, without considering strategies and interests of the very important actors, i.e. USA, Russia, China, countries of UE. This was more than clearly illustrated by President Carter in January 1980 (U.S. is consuming more than 20% of the world primary energy and it’s dependecy to crude oil imports is 58%) when he declared that “an attempt by any outside force to gain control of the Persian Gulf will be regarded as an assault to the vital interests of the U.S.A. and such an assault will be repelled by any means necessary, including military force” in a statement also known as the Carter Doctrine. As far as Russia is concerned, its dominant position in the global gas market (24% of the world’s reserves) and its ability to control neighbouring producers (Turkmenistan, Uzbekistan and Kazakhstan) as well as its oil reserves led the US diplomacy to encourage the establishment of oil and gas pipelines that bypass Russia, thereby diminishing its control over the regional flow of energy.
One of the biggest challenges of the State of Israel, in a troubled region and in a difficult environment, has been to secure a long-term and sufficient energy capacity to its population and booming economy : Israel has the 24th largest economy in the world, providing the highest per capita rate (around 30.000 USD) in the region, with a predominence of industries and services (agriculture accounts only for 2.7%). As of 2009, Israel relied on imports to balance its energy consumption, spending 5% of the GDP, its domestic production of crude petroleum and natural gas being negligible. Because of the failure to find economically worthwhile deposits of fossil fuels, the state had devoted large sums to developing other energy sources, particularly solar energy where Israel is an acknowledged leader. Traditionally, Israel, having no access to the Middle East energy sources for obvious reasons, has relied on expensive, long-term contracts with nations like Mexico (oil), Norway (oil), the United Kingdom (oil), Australia (coal), South Africa (coal), and Colombia (coal) for its energy supplies. Israel also has pursued other, cheaper sources of energy, like Egyptian gas, imported via pipeline.
A new deal for Israël
After many decades of previously unsuccessful explorations, a recent discovery in the Mediterranean has placed the country in the middle of what the Wall Street Journal calls a "gas bonanza" : this find could well be the world’s largest deepwater gas discovery in a decade. The Leviathan offshore gas field, named after the seven-headed sea monster mentioned in the Old Testament (Job, 41), currently holds an estimated 16 trillion cubic feet of gas - enough to accommodate Israeli demand for the next century. Depending on future energy prices and factors such as drilling costs, this discovery may be worth $90 billion. The Houston-based Noble Energy Inc. has 39.66% of the working interest in the region, while Israeli companies Delek Drilling and Avner Oil have each 22.67%. According to Noble Energy, because of the large size of the field, approximately 125 square miles, two more appraisal wells will be required in order to determine the total gas reserves, deep layers being at 7.200 meters. US Geological Survey estimates that there are 122 trillion cubic feet of gas in the whole Levant Basin, most of which is within Israel’s jurisdiction. There is also the possibility of finding oil at lower strata.
In a country where energy potential has primarily been focused on technological innovation in such areas as solar power, this finding, added to other proven reserves like Tamar gas field (discovered in 2009), would actually alter Israel’s status into a net exporter : the Tamar field, which should begin production in 2013, is expected to supply all of Israel’s domestic requirements for at least 20 years…Leviathan could therefore be completely devoted to exports.
Israel’s neighbors, and mainly Lebanon, are already lining up to counter Israel’s newfound advantage, claiming that part of Leviathan belongs to Lebanon and not Israel. Uzi Landau, the Israeli infrastructure minister, responds that Israel has the rights to the maritime area where the field is located, and warned Lebanon that Israel will not hesitate to use force to protect its mineral rights. The fact is that the borders between the two countries are indented and the claim may be complex…some others arguing the rule of capture, where each side is permitted to lift as much as it can on its side.
Another energy potential for Israel is oil shale. There are still uncertainties on the actual reserves of the country (Israel Energy Initiatives presented data that reserves are equivalent to 250 billion barels, not confirmed by international institutions) and oil shale mining used to be a dirty business that used up tremendous amounts of water and energy. Yet new technologies, being developed for Israeli shale, seek to separate the oil from the shale rock 300 meters underground ; these techniques will still have to be tested and improved, demonstrating that the underground separation of oil from shale is environmentally sound and economically feasible before going to full-scale production.
These key developments lead to a reshuffle of the geopolitic climate of the region, as the energy dependance was one of the main concerns of Israel. Moreover, exporting energy could well be an important income for the country, as inclination of European and Asian buyers to diversify their supply base should help to secure long-term supply agreements, helping, in the other hand, Israel to promote its political views and strategic importance.
Knowing the true dimensions of Israel’s undersea gas and oil shale reserves will lead energy geopolitics to integrate Israel as an important producer, able to direct its energy exports by its ports in the Mediterranean and Red Sea. The full exploitation of these resources will require massive infrastructure investment for drilling, pipelines, liquified natural gas plants and new oil exporting outlets.
Enabling their companies to take a stake in that promising zone and designing new routes of energy transportation will be the new pieces of the Middle East energy chess, especially for the U.S., traditionnaly close to Israel ; and Russia, main gas provider of the world. EU will have to demonstrate its ability to champion a single policy for all its members – having actually different energy needs - perhaps by bringing them around a new European scheme comprising a liquefied natural gas facility in Cyprus and a transportation hub from the Eastern Mediterranean via undersea pipelines. Of course, China will seek to secure another diversification source, in a region where its influence is increasing. The quest continues…