Monday, July 25, 2011

Israel's Gas Discovery: Lebanon May Be The Least Of The Problems

Trillions of cubic feet of natural gas have been discovered in several titanic fields off Israel's coastline. They promise both an abundance of domestic energy, as much as 200 years' worth by some estimates, and the possibility of the country's becoming a major energy exporter. The total value of the gas is currently worth close to a half-trillion dollars. On the macro level, and from the point of view of ensuring the country's national security, the prospective boon is almost unimaginably beneficial. The question, as always, is what is entailed in realizing it, and how to mitigate any attendant social and political costs.
Alex Joffe, Fueling Israel's Future, July 21, 2011

Only in Israel could the prospect of extracting trillions of cubic feet of natural gas have a downside.

Alex Joffe, a research scholar with the Institute for Jewish and Community Research, writes that there is an array of different problems posed by the prospect of Israel taking advantage of its new gas find:

  • Location: The gas terminal would be on Israel's coastline, but due, in part, to the erosion in the Nile delta from the Aswan dam--the area is vulnerable to storm damage, leaving millions of Israelis, both Jews and Arabs, competing for access to the few parks and undeveloped beaches on the seafront.

  • Strategic Issue: The facilities will have the explosive potential of small nuclear weapons--add to this the fact that such a facility would be a major target for terrorist, as evidenced not only from the recent attacks on the gas pipeline from Egypt, but also the electrical-power stations in Hadera and Ashkelon which have been targeted by Hizballah and Hamas rockets.

  • Domestic Problem: Placing the gas terminal at Dor, at the proposed location south of the Hadera power station, effectively cuts through a kibbutz, a nature reserve, and major archaeological site. Another proposal to expand the existing gas terminal at Ashdod would also affect kibbutzniks as well as residents of outlying cities--both targets of rockets in the past--and don't even think about north Tel Aviv or its affluent suburbs.

  • Additional Costs: On proposal would locate a floating terminal a few miles off the shore of Hadera, allowing it to move out of range of missiles but the cost would be prohibitive.

  • Taxes: Both Israeli and American companies have major investments in the project. But proposed taxes on profits at between 50 and 62 percent have the U.S. State Department complaining about the effect on American investors and members of the Knesset complaining about "greedy tycoons."

  • Regional Implications: The threats from Lebanon, accusing Israel of stealing "its" offshore natural gas, are well known
It's not that Joffe suggests forgetting about all that gas, but by the same token, he doesn't offer any simple solutions either.

Instead, he leaves us with the thought:
One can only hope that, with agility and political wisdom, the Jewish state will successfully navigate its course between the blessing and the curse of immense amounts of fuel, and the forms of power that come with it.
Hope springs eternal--or at least as long as the gas does.

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1 comment:

NormanF said...

Israel has no choice but to bring it online quickly. The disruption in the Egyptian gas revealed Israel's vulnerability to unfavorable changes in Israel's strategic environment. A future Egyptian government could cancel gas deliveries. Israel needs to rely on itself. That is why all the usual obstacles will be swept aside. Israel is not America. It needs economic independence.