Looking for an Oil Boom in Israel's Napa Valley

[shira]

In a golden wheat field set among the green hills of Israel's Adullam region, Harold Vinegar gestures to a drilling rig as it pulls up core samples of oil shale from some 400 meters (1,312 feet) down. "Israel has one of the largest deposits of oil shale rock in the world, enough to produce 250 billion barrels," says the 62-year-old geologist, who spent three decades at Royal Dutch Shell (RDS.A), eventually becoming Shell's chief physicist. "Saudi Arabia has reserves of 260 billion barrels. Most people don't realize yet that Israel has the potential to be one of the world's major oil producers."

<snip>

The dream of an energy-independent Israel has taken a giant leap forward since the 2009 discovery of substantial natural gas fields off its coast. The strategic value of those finds was confirmed when the uprising in Egypt disrupted its gas exports to Israel. Since Israel must import all its oil and coal and 70 percent of its gas, tapping the oil shale successfully could be a game-changer for the Jewish state.

First, though, Vinegar has to prove the oil can flow easily. The traditional way to extract shale oil is through open-pit mining, with production costs ranging from $70 to $100 a barrel. Vinegar says a more economical alternative with less damage to the landscape involves slowly and uniformly heating rods made of molten salt that are sunk into the shale deposits. Heat from the rods, which are kept at up to 600F, spreads through the shale slowly, over three to five years. The resulting oil and gas are then pumped to the surface. Vinegar is a pioneer in developing this technology, which he says could produce oil for as low as $35 a barrel.

Israel's shale oil deposits have remained untapped largely for geopolitical reasons. "None of the major oil companies are willing to do business in Israel because they don't want to be cut off from the Mideast supply of oil," says Howard Jonas, chief executive officer of IEI's corporate parent, IDT, in Newark, N.J. Investor excitement over the shale ventures has helped push IDT's stock, which fell to 66¢ a share in late 2008 on its struggling prepaid calling card business, to about $30.

more...
http://www.businessweek.com/magazine/content/11_24/b4232017039815.htm

[shira]

1. Lawrence Solomon: Israel’s new energy

In the first 25 years after Israel’s founding in 1948, it was repeatedly attacked by the large armies of its Arab neighbours. Each time, Israel prevailed on the battlefield, only to have its victories rolled back by Western powers who feared losing access to Arab oilfields.

The fear was and is legitimate – Arab nations have often threatened to use their “oil weapon” against countries that support Israel and twice made good their threat through crippling OPEC oil embargoes.

But that fear, which shackles Israel to this day, may soon end. The old energy order in the Middle East is crumbling with Iran and Syria having left the Western fold and others, including Saudi Arabia, the largest of them all, in danger of doing so. Simultaneously, a new energy order is emerging to give the West some spine. In this new order, Israel is a major player.

<snip>

“None of the major oil companies are willing to do business in Israel because they don’t want to be cut off from the Mideast supply of oil,” explains Howard Jonas, CEO of IDT, the U.S. company that owns the Shfela concession through its subsidiary, Israel Energy Initiatives. Jonas, an ardent Zionist, considers the Shfela deposit merely a beginning: “We believe that under Israel is more oil than under Saudi Arabia. There may be as much as half a trillion barrels.”

<snip>

Although the Israeli shale project is still at an early stage, its massive potential and Vinegar’s reputation have already begun to change attitudes toward Israel. :eyes: “We have been approached by all the majors,” Vinegar recently told the press, and for good reason. “Israel is very well positioned for oil exporting” to both European and Asian markets. The majors have other reasons, too, for casting their eyes afresh at Israel. Through its natural gas finds in the Mediterranean’s Levant Basin, and with no help from the oil majors, Israel is becoming a major natural gas exporter to Europe. According to the U.S. Geological Survey, the Levant Basin has vast natural gas supplies, most of it within Israel’s jurisdiction.

http://opinion.financialpost.com/2011/06/10/israels-new-energy/

[Exilednight]

2. Very misleading article.

1. This oil has been known about for quite a while.

2. Shale oil reserves are not included in known oil reserves due to their difficulty to extract.

3. If these reserves were to be included in conventional oil reserves, Israel (6.5 billion metric tons) would be a very marginalized player compared to countries like Russia (35.5 billion metric tons), China (32 billion metric tons), Australia (58 billion metric tons), and Jordan (65 billion metric tons) or the biggest of all: the USA (301 billion metric tons).

4. Israels oil has been determined to be of very low quality and rates as low in heating quality and oil yield. This negates any hope of energy independence. Along with having the second largest shale oil deposits, Jordan also has the highest quality.

5. Drilling this oil could be detrimental to Israel's water aquifers and have an inverse impact on the environment.

[shira]

3. Thanks for the input, but what are your sources? n/t

[Exilednight]

4. Here you go

http://www.eia.gov/oiaf/archive/aeo06/pdf/0383%282006%29.pdf

http://pubs.usgs.gov/sir/2005/5294/pdf/sir5294_508.pdf

http://www.nra.gov.jo/images/stories/pdf_files/Updated_Report_2006.pdf

http://www.worldenergy.org/documents/ser2007_final_online_version_1.pdf

[razorman]

5. With oil prices so high, it might become economically feasible for them to extract shale oil.

I could easily see the Arab nations lowering the price of their oil to prevent Israel from producing its own oil and becoming an industry competitor.

[Exilednight]

6. It doesn't matter if they allow Israel to develop their own oil supply. The oil that

Israel sits on is pretty much crap.