Events thousands of miles from Israel could generate windfalls in political and economic benefits. These are not things that may happen sometime in the future, but developments that are unfolding right now. Unfortunately, wherever big money goes, risks and danger always follow. The current situation is not an exception.
The stage for these events was set years ago – in climate change of all things. Europe takes this issue very seriously and has been steadily shifting to green energy. In fact, the EU has set a very ambitious goal of “becoming the world’s first major economy to go climate neutral by 2050.”
Nine EU members are completely coal-free. Clean energy accounted for two-thirds of the EU’s energy generation in the first half of 2021; coal accounted for only 14% of all energy production during this period, down from 16% two years before.
Oil has serious drawbacks, but posing sudden and horrific danger to cities and states is not one of them. Nuclear power does pose this risk and therefore must be monitored carefully.
France relies on nuclear plants for much of its power needs (as do other EU countries) and inspects them regularly. In 2021, corrosion and cracks were found in five reactors; inspections in April 2022 found a similar problem at four more. All of those are now off-line while repairs are being made.
Germany, which has the biggest economy in Europe, also had been relying on nuclear power. However, after the meltdown at Fukushima in 2011, they began phasing out this technology; the last three of its nuclear plants were closed early this year.
These developments have combined and are creating a severe energy crisis. Oil has been shunned because of environmental reasons and its use reduced; coal is in the process of being phased out entirely; and now nuclear will not produce as much power as it was expected to. The EU’s power needs and supplies are clearly out of balance, which help explain why energy and gasoline have become so expensive.
Unbelievable as it sounds, Europe is running out of electricity and can’t afford even the lower amount that it is producing. In the first quarter of 2022, short-term gas prices on the largest European markets were five times higher than their 2021 average, driving inflation sharply higher throughout the region.
Europe has been trying hard to build its gas reserves before the cold weather returns, but Russia, their principal supplier, just cut deliveries by 60%, essentially weaponizing this commodity. In the coming months, tens of millions will have to choose between heating their homes and purchasing food.
Leviathan and Tamar: The Second Pieces
The solution to Europe’s energy woes could come from Israel. Here’s why.
Since becoming a state, Israel has been challenged to obtain all the oil and gas it needs at an affordable price. That began changing in 2009, with the discovery of the Tamar gas field, located 50 miles west of Haifa.
Tamar has proven reserves of 200 billion cubic meters of natural gas, and a nearby field has proven reserves of an additional 23 billion cubic meters. These fields also have reserves of tens of billions of cubic meters of “probable” reserves, and tens of billions more of “possible” reserves.
That’s not all. In 2010, there was another major discovery: the Leviathan gas field. It is located 81 miles west of Haifa, and by conservative estimates has enough reserves to supply all of Israel’s needs for 40 years. But some political commentators are even more optimistic; they believe that with these two discoveries, Israel’s reserves are now so plentiful that it will be able to export energy to Turkey, Egypt, and possibly other countries, thereby changing the political landscape in the region.
The discovery of Tamar and Leviathan are among the largest offshore discoveries ever made. For the first time in its history, Israel has joined the Big Leagues of producers.
It’s interesting how the wheel turns! Countries in Europe and elsewhere that regularly rebuked Israel for “apartheid” policies and that supported BDS (boycott, divest, sanction) and other anti-Israel policies are now desperate for oil and/or gas; they may have no choice but to “eat crow” and purchase them from Israel. Potentially, such deals could generate major revenues for Israel.
Putin: The Third Piece Of The Puzzle
Say what you will about Putin, but over the years he has been a pleasant surprise as far as Israel is concerned. Unlike his predecessors, he has been sympathetic - possibly even supportive - of Israel. But a gas export agreement Israel signed with Egypt and the EU on June 10 may push his friendship beyond the limit.
The agreement calls for Israel to export gas to the EU. The gas will be transferred from Israel to Egypt via an existing pipeline, liquefied, and shipped to Europe.
In theory, Israel has the right to do business anywhere it wants to, but reality says otherwise. Russia earns crucial revenues from its gas sales and, like the Mob, will not tolerate anyone encroaching on its territory.
On June 10, Russian foreign minister Mikhail Bogdanov summoned Israel’s ambassador to Russia Ben Tzvi, allegedly to reprimand him for an Israeli air strike just days before. That issue certainly was discussed, but almost certainly so was Israel’s agreement to export gas to Europe.
It’s difficult to imagine that Putin will allow Israel to take even a small share of Russia’s gas sales to Europe or anywhere else, as its economy depends on those revenues and doing so would set a dangerous precedent.
It’s also important to remember that Russia has many troops, military aircraft, and naval assets stationed in Syria, and in a subtle way these pose a real and serious threat to Israel.
Israel has humongous energy reserves and is most anxious to sell them. Europe is a huge market and is desperate to purchase them from a reliable source and no longer be held hostage by Russia. Now if only Israel can figure out a way to make this happen.
Sources: ans.org; bloomberg.com; energytracker.asia; mckinsey.com; wikipedia.org