I had read recently of new petroleum finds in Israel. Walter Russell Mead provides some additional information:
Actual production is still minuscule, but evidence is accumulating that the Promised Land, from a natural resource point of view, could be an El Dorado: inch for inch the most valuable and energy rich country anywhere in the world. If this turns out to be true, a lot of things are going to change, and some of those changes are already underway.He goes on to note that although the Gulf States may be able to undercut Israel on prices, the development of new oil and gas fields in Israel, the United States, and Russia (and I will add, Canada) will undermine the influence and power of OPEC.
Israel and Canada have just signed an agreement to cooperate on the exploration and development of what, apparently, could be vast shale oil reserves beneath the Jewish state.
The prospect of huge oil reserves in Israel comes on top of the recent news about large natural gas discoveries off the coast that have been increasingly attracting attention and investor interest. The apparent gas riches have also been attracting international trouble. Lebanon disputes the undersea boundary with Israel (an act somewhat complicated by the fact that Lebanon has never actually recognized Israel’s existence), and overlapping claims from Turkey and Greece themselves plus both Greek and Turkish authorities on Cyprus further complicate matters. Yet despite these tensions, following Russian President Vladimir Putin’s surprisingly cordial visit last week, Gazprom and Israel have announced plans to cooperate on gas extraction.
This suggests at a minimum that Turkish efforts to block gas development in the region will face opposition from Russia as well as from Israel. Gazprom and other Russian companies are also likely to do well in any gas exploration deals developed with the strongly pro-Moscow (and very cash hungry) Greek Cypriot government.
The stakes are not small: the offshore Levantine Basin (which Syria, Lebanon, Turkey, Greece, Cyprus, Israel and even Gaza will all have some claim to) is believed to have 120 trillion cubic feet of natural gas and “considerable” oil. Drillers working in Israeli waters have already identified what look to be 5 billion barrels of recoverable oil in addition to over a trillion cubic feet of gas. (US firms were involved in these finds.) Israel’s undersea gas reserves are currently estimated at about 16 trillion cubic feet and new fields continue to be rapidly found.
The new Israeli-Russian agreement is part of a conscious strategy by the Israeli government to use its nascent energy wealth to improve its embattled political position. With Italy reeling under the impact of big wrong-way bets on Iran, Rome may also begin to appreciate the value of good ties with a closer and more dependable neighbor. Another sensible target for Israeli energy diplomacy would be India: the two countries are already close in a number of ways, including trade and military technology, and India is eager to diversify its energy sources.
Gas is one thing, but potential for huge shale oil reserves under Israel itself, however, is a new twist. According to the World Energy Council, a leading global energy forum with organizations and affiliates in some 93 countries, Israel may have the third largest shale oil reserves in the world: something like 250 billion barrels. (The US and China are both believed to have larger shale oil reserves, with the US believed to have the equivalent of well over 1 trillion barrels of potentially recoverable shale and China having perhaps one third of that amount. Canada’s Athabaskan oil sands reserves may contain the equivalent of 2 trillion of barrels conventional oil, or more than all the conventional oil known to exist in Saudi Arabia, Iraq and Iran combined.) If the estimates of Israeli shale oil are correct, Israel’s gas and shale reserves put its total energy reserves in the Saudi class, though Israel’s energy costs more to extract.
However, this may very well stymie Turkey's ambitions at becoming a regional powerhouse:
Another big loser could be Turkey. For years the Kemalist, secular rulers of Turkey worked closely with Israel, and the relationship benefited both sides. Under the Islamist AK party, that relationship gradually deteriorated. Both sides were at fault: Turkish politicians were all too ready to demagogue the issue to score domestic political points, and Israelis did not respond with all possible tact.
But if Israel really does emerge as a great energy power, and a Russia-Greece-Cyprus-Israel energy consortium does in fact emerge, Turkey will feel like someone who jilted a faithful longtime girlfriend the week before she won a huge lottery jackpot. More, Turkey’s ambitions to play a larger role in the old Ottoman stomping ground of the eastern Mediterranean basin will have suffered a significant check.