The Israel Connection: An Offshore Energy Future
Can you imagine if Saudi Arabia suddenly stopped selling its oil to the U.S. for a few weeks? Unlikely, but just consider it. America would lose about 6% of its oil supply, and gas prices -- you think they're high now?
Well, something very similar to that almost happened to Israel this year. Egypt temporarily stopped supplying it with natural gas, cutting off more than 40% of Israel's gas supply, an essential fuel it needs for power. But a new discovery, deep under the Mediterranean Sea, might help Israel wean itself off foreign energy imports and could help the U.S. boost its own energy independence. More now in our continuing look at "The Israel Connection."
In Israel, peace and power come at a price. This year, the pipeline carrying natural gas from Egypt into Israel has come under attack again and again by sabotage just across its border.
[UZI LANDAU, MINISTER OF NATIONAL INFRASTRUCTURE] Knowing that we cannot rely on anyone around us, we have to see how we could become long-time energy independent.
[SUITERS] Uzi Landau is charged with ensuring that his country has the energy it needs -- a difficult task since Israel depends heavily on imported fossil fuels, like oil, coal, and natural gas.
[GIDEON TADMOR, PRESIDENT AND CEO, DELEK ENERGY] There was an old joke saying, why did it take Moses 40 years to get from Egypt to Israel -- because he was looking 40 years for the only place in the Middle East without oil and gas.
[SUITERS] An old joke that Gideon Tadmor never took literally. His company, Delek, looked for energy off the coast of Israel, deep in the Mediterranean Sea. This is what Tadmor and Delek have found. First, a pair of small natural gas fields, called Noa, and Mari-B, in 1999 and 2000, the first proof that Israel had its own significant gas reserves.
[AMOS LASKER] With the natural gas, we do have a revolution here in Israel.
[SUITERS] Amos Lasker just stepped down as the head of Israel Electric, the country's sole electric utility. He says the first Israeli gas fields started a revolution but can't sustain it. The country still needs natural gas from Egypt.
[LASKER, FEBRUARY 2011] Actually, now that I'm speaking with you, I think it's 2 1/2 weeks that we don't have any supply from Egypt. And we are under very, very tough and severe pressure.
[SUITERS] That's why the search for more natural gas has been such a priority for Israel. And as recently as January 9 of 2009, that search wasn't going well at Delek.
[TADMOR] Everyone was very grim. Everyone thought, we passed the point. What the hell is going on? How could we miss it? And I am saying, "Guys, it's my birthday. Nothing wrong could happen on my birthday." And I sat at the table. You know, instants after I sit down, all of the sudden, we saw the indication.
[SUITERS] Instants, just a few moments?
[TADMOR] Yeah. It was unbelievable.
[SUITERS] That discovery, on Tadmor's birthday, was Tamar, holding five times as much natural gas as the earlier finds, and it was soon followed by the smaller Dalit field. And then, last year, the mother lode -- Leviathan, an offshore gas field Minister Landau called, "the most important energy news since the founding of Israel." Potentially enough natural gas to supply all of Israel's energy needs for the next 25 years.
[TADMOR] All of a sudden, you see indicators of gas and you know that the world has changed. And it happens like that, in one instance. [Snaps]
[PHILIP KALSON] Oh, it's changed things completely.
[SUITERS] American Philip Kalson showed me what that change looks like today. Israel Electric's Ashdod Power Station sits on the Mediterranean coast. A pipeline connects it to the Mari-B gas field.
[KALSON] What we're showing here is how, with a station that already has 35 years of life in it, has been rejuvenated by making it a gas-fired station.
[SUITERS] As of 2004, the Ashdod plant burned only heavy fuel oil, and as of 2003, Israel got no electricity by burning natural gas. Now, Ashdod runs on Egyptian supplies and Israel's own offshore gas reserves.
[KALSON] During the past seven years that we've been receiving gas, we've expanded the capacity of the generation system by over 25%, and all of that's being done by adding capacity with gas.
[SUITERS] So the last 10 years or so, you have redefined the way you produce electricity.
[SUITERS] Kalson says, by 2020, as much as 80% of Israel's electricity could come from natural gas. Think about that -- from 0% to 80% in less than two decades, all possible because of the Leviathan gas field.
[TADMOR] It's the largest deepwater, offshore natural gas discovery in the decade around the world.
[SUITERS] And there may be oil underneath that.
[TADMOR] There may be oil, but we're not there yet.
[SUITERS] Then again, Israel might not need nearly as much oil. The country wants to turn some of its natural gas into liquid methanol, a substitute for gasoline, and use it to fuel the country's cars. Methanol supporters in the U.S. say they like the idea of working on that technology with Israel much better than working with China, the world's largest producer and user of methanol. And by converting more of its own huge natural gas reserves into methanol, the U.S. could also cut back on imported oil.
[LANDAU] We pull today to a gasoline station, and we see the pump ticking, and then we take our wallets to pay -- some say 20%, some say 30%, some say even higher percentages than that, are going to countries which support terror.
[SUITERS] But what lies beneath the Mediterranean Sea could bring a new reality to the surface.
[TADMOR] You see the flare, you see the action, you see excitement. I think you see all the ingredients of a nice story.
[SUITERS] Do you see money?
[TADMOR] You know what? No. [Laughs]
[SUITERS] What's the intangible you see, a dream come true?
[TADMOR] Yeah, a dream come true.
[TEXT ON SCREEN] To hear more about Israel's transition to natural gas, go to energynow.com.
[SUITERS] A dream, Tadmor says, that results from the science of deepwater drilling, the art of thinking outside the box, and...
[TADMOR] Luck -- but that's relatively easy, because we are in Israel, so a call to God is a local call.
[SUITERS] The smiles begin to disappear when the topic of terrorism is raised. Last month, the leader of the Islamic extremist group Hezbollah warned Israel about robbing Lebanon of its resources, accusing Israel of taking natural gas that Lebanon believes lies under its part of the Mediterranean Sea.
To power itself, Israel relies on fossil fuels from hostile neighbors – a reliance loaded with risk. Earlier this year, when an Egyptian pipeline was attacked, more than 40 percent of Israel’s natural gas supply was temporarily cut off. But a new offshore discovery could replace Israel’s foreign energy imports, and help the U.S. boost its own energy independence along the way.
As part of energyNOW!’s “The Israel Connection” series, chief correspondent Tyler Suiters looks at an offshore natural gas discovery some are calling “the most important energy news since the founding of Israel.” Suiters sees the new energy source being put to work in power plants and learns of Israel’s plan to run its cars on natural gas instead of oil-based fuels like gasoline.
Philip Kalson explains how natural gas resources beneath the Mediterranean Sea are transforming the way Israel powers its economy.Watch now ...
Gideon Tadmor, president and CEO of Delek Energy, discusses the process of exploring for offshore natural gas in Israel.Watch now ...
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