Not that the countries of the Middle East were exactly hurting for things to fight over, but: Israel has announced large natural gas discoveries off its Mediterranean coast. This has triggered warnings from Lebanon not to drill in its waters, with Israel replying in turn that it is not drilling in Lebanese waters.
Tensions have been stirred by both sides. Lebanon's Hezbollah-led opposition has accused Lebanese Prime Minister Saad Hariri of failing to protect the country's resource rights, and Israeli Infrastructure Minister Uzi Landau told Bloomberg last week that Israel would use force if necessary to defend its right to develop and produce the fields.
The to-and-fro involves the Tamar and Leviathan gas fields, which may contain more than 20 trillion cubic feet of natural gas, equivalent to 3.5 billion barrels of oil, or up to 35 years of Israel's current consumption with enough left over to make the country an exporter. And it isn't just talk -- a consortium of energy companies, including Noble Energy of the United States, has signed an $11 billion gas supply deal with the Israel Electric Co. starting in two years, and has received a $430 million loan to develop Tamar, reports Sara Toth Stubs of Dow Jones Newswires. Israeli billionaire Yitzhak Tshuva is leading the Leviathan project.
The finds open a wholly new energy region, benefitting countries that have sat on the sidelines as trillions of dollars in profits have gone to Saudi Arabia, Kuwait, Iraq, Iran and the other oil heavyweights.
I emailed Fareed Mohamedi, an expert on Middle East energy at PFC Energy, who in turn asked colleague Yahya Sadowski about the stakes at play. Sadowski indicated that there is validity to Lebanon's concerns that Tamar straddles the waters of both countries -- "They would all be tapping into the same reservoir," Sadowski said in an email. Since the Israelis are already set to produce gas, they "have a huge head start, and will be able to suck out most of the gas before anyone else is even able to raise the funds for exploration," he said.
The subject seems likely to inflame politics that are, well, rather inflamed already. "It is such a hyper-political area," said Alan Hegburg, a former deputy assistant secretary for international policy in the U.S. Department of Energy, and now a fellow at the Center for Strategic and International Affairs in Washington. "It's a minefield."
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