Senators Want U.S. to Help Israel Tap its Giant Reserves
Three senators with significant energy policy portfolios introduced legislation yesterday that would encourage more U.S.-Israel collaboration on developing Israel's large offshore natural gas reserves.
The bill rolled out by Sens. Mary Landrieu (D-La.), Ron Wyden (D-Ore.) and Lisa Murkowski (R-Alaska) would encourage U.S.-sponsored research programs such as the National Science Foundation, academic institutions and U.S. energy companies to work with Israel on the development of gas fields in the eastern Mediterranean Sea. Israel has an estimated 30 trillion cubic feet of natural gas that, if developed, could supply Israel's expanding energy needs and help supply Jordan and Turkey.
Two large gas fields are being explored and developed by Houston-based Noble Energy Inc. and its Israeli partners, Delek Drilling Ltd. Partnership, Avner Oil Exploration LP and Isramco Negev 2 LP.
The largest of the offshore formations is called Leviathan and is estimated to hold 16 trillion cubic feet of gas. To put that into perspective, the U.S. economy consumes about 25 trillion cubic feet a year of gas. For the far smaller nation of Israel, analysts say further development of its offshore gas bounty would be an economic boon and a geopolitical gain.
"If the Israelis can pull it off, there would be huge security benefits for Israel and its neighbors," said David Goldwyn, a former U.S. State Department global energy affairs coordinator.
Still, the prospect of exporting Israeli gas throughout the region or to Asia has been hotly debated within Israel. Mirroring aspects of a similar debate taking place in the United States, Israel's top court and government under Prime Minister Benjamin Netanyahu are considering how much gas should remain in Israel to ensure its energy security and boost domestic industries.
Noble has encouraged the government to agree to liquefied natural gas exports.The mid-sized Houston oil and gas explorer has said exporting some of the gas at a higher global price is needed for Leviathan's development to be economical for project investors. If the gas stays in Israel, the state-run utility could be the project's sole supply contract, a prospect that tends to discourage large-scale investments in risky oil and gas exploration.
With ongoing turmoil in the Middle East, Israel has had trouble attracting investors among multinational oil and gas companies.
A 'new layer of risk '
"The reality is that offshore drilling is the most dangerous sector in oil and gas, and doing it in the Middle East, offshore Israel, adds a whole layer of risk," said Gal Luft, co-director of the Potomac, Md.-based Institute for the Analysis of Global Security. "The big multinationals are not interested in getting into this game at this stage."
Goldwyn said that up to this point, the U.S. government has remained at arm's length, offering Israel insights into the potential pros and cons of exporting gas but steering clear of domestic politics.
Noble and its Israeli partners are awaiting an Israeli court's decision about gas exports but have continued to press ahead with exploration. Yesterday, the partnership announced it would start drilling in a third field, called Eran, which is off Israel's northern coast. Israel is already getting gas from its offshore Tamar field, after the Israel Electric Corp. signed a 15-year contract last year to buy gas from the Noble-led producers.
In statements accompanying the proposal on Capitol Hill, Landrieu talked about the potential for Israel to "achieve energy independence" and her state of Louisiana's potential role in advancing Israel's gas reserves.
"The Gulf Coast arguably has the most advanced offshore oil and gas industry in the world, and we are uniquely qualified to lead the effort to help Israel develop this source," she said.
The legislation "recognizes energy cooperation between the two countries as a strategic interest of the United States," according to the bill summary. Further, it encourages collaboration on "energy innovation technology, technology transfer, and analysis of geopolitical implications of new natural resource development."
The Landrieu-Wyden-Murkowski bid for U.S.-Israel energy cooperation also encourages government-to-government collaboration on developing Israel's environmental management and regulatory best practices. It also allows cooperative agreements between the U.S. Energy Department and Israel and expands existing grant programs such as the Binational Industrial Research and Development Program (BIRD) to include natural gas-focused projects.
Joel Kirkland, E&E reporter
Republished from EnergyWire with permission. EnergyWire covers the politics and business of unconventional energy. Click here for a free trial
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