Tapping Israel's Natural Gas

(Wall Street Journal-Europe) David Wurmser and Jonathan M. Baron - Israel's discovery of approximately 25 trillion cubic feet of offshore natural gas since 2009 presents the Jewish state with an unprecedented opportunity. Accelerating instability elsewhere in the Middle East has not escaped the attention of major financial institutions, some of which have now concluded that Israel's energy-production sector merits closer examination and, possibly, greater consideration for investment. Israel confronts a troubling reality: A significant proportion of its natural-gas consumption today depends on unreliable imports from Egypt. Its remaining gas demands are satisfied by one domestic resource - the Mari-B field, offshore of the city of Ashkelon, which holds only enough gas to supply Israel through 2013. With Israel generating nearly 50% of its electrical power from natural gas, the importance of developing additional domestic sources cannot be overstated. Israel's proven offshore reserves in the Tamar and Leviathan fields far exceed the volumes of natural gas needed to satisfy its domestic market for the foreseeable future; Israelis consume less than 200 billion cubic feet of natural gas annually. Nonetheless, the policy obstacles to bringing this energy to market could prove considerable. More than most, Israel needs to create and project an atmosphere conducive to high-risk offshore exploration and production to win the confidence of potential operators and investors.

2011-05-13 00:00:00

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