Drilling for the gas will not be easy: the sea floor at the site is located more than a mile underwater, and the wells are covered by a mile of salt. (Photo courtesy Israel 21c)
Israel could be one step closed to energy independence after drilling companies announced the discovery of "extremely significant" natural gas reserves at an offshore drilling site in the Mediterranean about 60 miles off the coast of Haifa, Israel.
One massive pocket of natural gas is expected to contain more than three trillion cubic feet of natural gas, enough to feed Israel's energy needs for 15 years, lessening its dependence on foreign fuel. This is the largest natural gas reserve discovered in Israel, with an estimated value of $15 billion. It is three times larger than an existing drill site on Israel's southern coast, which is expected to be depleted in five years. Israel's National Infrastructure Minister Binyamin Ben-Eliezer called the discovery an "historic moment" for Israel.
The Tamar 1 site, named after the granddaughter of Israeli geologist Yossi Langotsky who helped locate the site, is a joint venture between four major stakeholders: the Houston-based Noble Energy, and three major Israeli partners Isramco Negev, Delek Drilling, and Avner Oil and Gas Exploration.
Independence from foreign fuel sources
Delek Drilling's PR representative Shaya Segal told ISRAEL21c that it will take some time to understand the impact of the find: "First of all we don't have the full information," he says. "We just know there are great quantities there. In about two and a half weeks, after more tests are concluded, we will know more exactly what is there."
In terms of Israel's future, the impact could be enormous. "It can contribute a lot to the Israeli economy," says Segal. "And give us independence with anything that has to do with natural gas." In Israel, that would mean fuelling power plants with natural gas, as opposed to the more polluting coal or oil fuel sources. "It's much more environmentally friendly," agrees Segal.
Biggest in US company's history
In a press statement, the companies announced: "Subject to receipt of further data from the drill site, the estimated reserves of natural gas are likely even to increase." And Charles D. Davidson, the CEO and chairman of Noble Energy said: "This is one of the most significant prospects that we have ever tested and appears to be the largest discovery in the company's history."
While the drilling is difficult - the sea floor at the site is located more than a mile underwater, the wells are covered under more than a mile of salt, and some analysts say that actualization of the wells is speculative, since transporting natural gas is difficult -- Tel Aviv stocks for Isramco, The Delek Group and Avner rose more than 45 percent. Some analysts estimate that it will cost about $1 billion dollars in infrastructure to extract the gas from the depths of the sea. Extraction of gas could begin in 2013.
The find also gives hope for environmentalists, who have been petitioning that the building of new coal-fire power plants in Israel be stopped. It will certainly be good news to Shai Agassi of Better Place, who plans to install an electric car system and grid in Israel, over the next years. One of the criticisms of his project, before this new gas pocket find, was that the electric cars would be fueled by power plants running on "dirty" fuel such as coal.
But before the champagne corks are popped, analysts caution that further investigations at the Tamar site be made. They are also insisting that while the natural gas find will boost the country's economy for some years, Israel's future remains in high tech, not energy.
Dan Halman, the CEO of Halman-Aldubi Group, a mutual funds firm in Israel told The Jerusalem Post: "If the Tamar site opposite the Haifa coast succeeds in producing the significant quantities of natural gas predicted, we are talking about a revolution which will have an impact on the Israeli economy for the coming generations."
Article courtesy Israel 21C