I just read this post at Walter Russel Mead’s blog. It would seem that Israel may be on the verge of becoming one of the largest producers of oil and natural gas in the world.
Israeli Prime Minister Golda Meir famously lamented that Moses led the children of Israel for forty years of wandering in the desert until he found the only place in the Middle East where there wasn’t any oil.
But could Moses have been smarter than believed? Apparently the Canadians and the Russians think so, as both countries are moving to step up energy relations with a tiny nation whose total energy reserves some experts now think could rival or even surpass the fabled oil wealth of Saudi Arabia.
Actual production is still miniscule, but evidence is accumulating that the Promised Land, from a natural resource point of view, could be an El Dorado: inch for inch the most valuable and energy rich country anywhere in the world. If this turns out to be true, a lot of things are going to change, and some of those changes are already underway.
Israel and Canada have just signed an agreement to cooperate on the exploration and development of what, apparently, could be vast shale oil reserves beneath the Jewish state.
This is wonderful news, and a potential game changer in the region. As Mead explains,
Many obstacles exist and in a best case scenario some time must pass before the full consequences of the world’s new energy geography make themselves felt, but if production from the new sources in Israel and elsewhere develops, world politics will change. The countries along both coasts of the Persian Gulf erupted into global prominence in the 1970s when world energy shortages catapulted them into previously undreamt of wealth and political influence. Those countries will still be rich; for the most part, their energy is cheaper to produce than the more unconventional sources in the rest of the world, including Israel.
But what they keep in money they may lose in clout. OPEC’s power to dictate world prices is likely to decline as Canadian, US, Israeli and Chinese resources come on line. In fact, the Gulf’s most powerful oil weapon going forward may be the ability of those countries to under-price rivals; expensive shale oil isn’t going to be very profitable if OPEC steps up production of its cheap stuff. (Brutal, dog-eat-dog price wars driving oil prices down to derisory levels: Via Meadia trembles at the thought.)
Nonetheless, the ability of the Arab governments to influence political opinion in Europe and the rest of the world is likely to decline as more oil and gas resources appear — and as Israel emerges as an important supplier. We could be heading toward a time when the world just doesn’t care all that much what happens around the Persian Gulf — as long as nobody gets frisky with the nukes.
Another big loser could be Turkey. For years the Kemalist, secular rulers of Turkey worked closely with Israel, and the relationship benefited both sides. Under the Islamist AK party, that relationship gradually deteriorated. Both sides were at fault: Turkish politicians were all too ready to demagogue the issue to score domestic political points, and Israelis did not respond with all possible tact.
But if Israel really does emerge as a great energy power, and a Russia-Greece-Cyprus-Israel energy consortium does in fact emerge, Turkey will feel like someone who jilted a faithful longtime girlfriend the week before she won a huge lottery jackpot. More, Turkey’s ambitions to play a larger role in the old Ottoman stomping ground of the eastern Mediterranean basin will have suffered a significant check.
If the possibility of huge Israeli energy discoveries really pans out, and if the technical and resource problems connected with them can actually be solved, the US-Israeli relationship will also change. Some of this may already be happening. Prime Minister Netanyahu’s evident lack of worry when it comes to crossing President Obama may reflect his belief that Israel has some new cards to play. An energy-rich Israel with a lot of friends and suitors is going to be less dependent on the US than it has been — and it is also going to be a more valuable ally.
I would rather buy oil from Israel than Saudi Arabia. With the new resources coming on-line here in North America and elsewhere, we may well see a day in which the Middle East becomes a geopolitical backwater. The sooner, the better.
- Israel’s Emergence As Energy Superpower Making Waves (blogs.the-american-interest.com)
- Tensions Boil As Israeli Oil Riches Grow (raptureimminent.wordpress.com)
- Peter Glover: The End Of OPEC Despotism (junkscience.com)
- Got Oil? Israel might. (bokertov.typepad.com)