The Time Has Come To End Israel’s Natural Gas Fiasco


UPDATES

8:00 am Israel time, Tuesday, August 19 2015

**The daily Palestinian terror report:

Among the many Palestinian terror attacks yesterday, israelstreet will limit ourselves to three that were representative of what took place here in Israel in the last 18 hours.

At 6:46 pm yesterday afternoon, Palestinian terrorists threw “rocks” and Molotov cocktails at Israeli motorists near the Palestinian settlement of Beit Kahil next to Mt. Hebron. Afterward, MADA treated a number of Israelis for trauma; several cars had windows and windshields smashed. Fortunately, no one in the cars was killed.

At 12:03 am, two missiles were fired out of Gaza toward southern Israel. Residents of the area reported hearing the explosions, but there were no alarms, and as of this hour–some eight hours later–the IDF still cannot tell anyone where they hit.

At 12:54 pm, a Palestinian terrorist was killed after stabbing a Border Guard at the Tapuach Junction.

Just after the incident, the dead terrorist on the roadway at Tapuach.

Just after the incident, the dead terrorist on the roadway at Tapuach.

This is the second stabbing attack there in as many days. In this case, the terrorist followed virtually the same basic MO as last time. He got close to the Border Guards by pretending to seek help, then quickly pulled out a large knife and stabbed the soldier who came to help him. 

Israel’s ambassador to the UN, Ron Prosor, noted this MO last night at the UN where he called on UN Secretary General Ban Ki-moon and the Security Council to condemn the latest series of terrorist attacks against Israelis:

“One can begin to identify a trend of terrorists posing as people who need help, taking advantage of the humanity of their Israeli victims, and try to take their lives. No moral person would accept such a crime. Once again, the Palestinian leadership responds with silence, while unequivocal condemnation of the violence on its part is necessary.

Of course, the abominable Ban Ki-Moon and the rest of the hypocritical UN is silent when it comes to Palestinians killing or trying to kill Israelis. 

However, Prosor was incorrect in saying that the Palestinian leadership  had responded “with silence.” Yesterday, after the incident at Tapuach, the Palestinians harshly condemned Israel for what it called the “cold-blooded annihilation of a Palestinian” and went on to say “the excuses of the occupying forces for executing Palestinian civilians are far from the truth and we call on the international community to compel Israel to stop its military escalation, aimed at dragging a cycle of violence into the region.”

Say what?

A terrorist walks up, fakes a plea for help, and stabs a soldier who is trying to help him. After stabbing him, he is shot and killed.  This is cold-blooded annihilation?

**What’s new in Syria?

With Assad’s government now literally hanging on by a thread in Syria and his Iranian-proxy ally Hezbollah being on the verge of losing the month-long battle of Zabadani, it was no surprise to see another of Assad’s allies, Russia, suddenly plying for peace yesterday in the Security Council of United Nations.

This came one day after Syrian Air Force barrel-gasoline bombs incinerated 96–and severely burned 246 more–in the marketplace at Douma in eastern Syria, and a day after reports that numerous Hezbollah soldiers were killed in Zabadani forcing most of them to flee back into Lebanon to protect the Bekaa Valley.

**Want to attack your enemies in the Middle East? Here’s how . . .

Meanwhile, the main story in Egypt over the last day has been the death of President Sisi’s mother, Malika Titani. Enemies of Sisi long claimed that his mother was born a Moroccan Jew and that her brother, Youri Sabbagh, actually fought in the Haganah during Israel’s War for Independence. The primary Sisi enemies making these claims have been leaders of the Muslim Brotherhood–who have themselves been recently accused of being Jewish. 

TODAY’S BLOG:

The primary natural gas and oil fields located off the coast of Israel.

The primary natural gas and oil fields located off the coast of Israel. WI stands for what was Israel’s working interest in the fields before the new contract negotiations. It still remains unclear what the new WI is.

As any supporter of Israel knows, it wasn’t so long ago that Israel was being touted as the new energy superpower with off-shore gas fields plentiful enough to make Israel an exporter of natural gas.

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The Tamar Field, with an estimated 11 trillion cu ft of gas, went on line back in 2013 after a pipeline was built to bring the gas into Israel. That field alone is large enough to provide Israel with gas for decades–and even perhaps large enough to sell some to Egypt.

But it was the Leviathan Field that was the prize. More than twice as large as Tamar, Leviathan was the key to Israel’s energy abundance and potential profit. Contracts were already in place to sell Israeli natural gas to Jordan, Egypt, and even Palestinian Areas A and B of Judea and Samaria.

More than this, as recently as last summer and Fall, Israel was in negotiations with the EU for it to fund a pipeline from Israel through Cyprus to Europe that would provide Europe with Israeli gas rather than Russian gas. 

The proposed route of the Israel-Europe natural gas pipeline.

The proposed route of the Israel-Europe natural gas pipeline.

Leviathan was set to go on line late next year.

But so much for counting your chickens before they hatch. Last December, all of these plans came to a screeching halt when Israel’s chief anti-trust officer, David Gilo, decided that the current contract that Israel had with the two chief companies doing the drilling and pipeline work, U.S.-based Noble Energy and Israel-based Delek Energy, provided Noble and Delek with monopolistic control of the natural gas.

Despite the fact that Noble and Delek had already invested billions of dollars in exploration, building off shore rigs, and even building the Tamar pipeline, Gilo said that their contracts with the government needed to be renegotiated.

And that’s where the matter has rested for more than 7 months. Nothing has been going on at Leviathan or at other smaller fields. Israel’s natural gas situation has turned into a first-class political fiasco.

On Sunday, however, after intense negotiations with Noble and Delek which threatened the Coalition, and public protests against Noble and Delek “raping Israel’s natural resources”, the government approved a new contract loaded with new pricing schemes that is frankly too complicated for virtually anyone to understand.   

But to give you some glimpse at the new deal:

1. Within 2 years, Noble and Delek must spend $1.5 billion dollars developing Leviathan. Within 5 years, they must invest $4 billion.

2. Delek must sell all of its interest in Tamar within 6 years. Noble can continue to operate Tamar but must reduce its interest in that field from 36% to 25%.

3. Noble and Delek must sell all their interest in the two smaller fields Karish and Tanin (so small they are not even on the above map) in the next 14 months.

Even after all of this, it is completely unclear what the effect of the contractual changes will be on the price of gas for the average Israeli. The only thing that seems to be fairly clear is that Israel will receive more profits from the gas that it sells abroad.

But whether this is true or whether more competition has been fostered only time will tell.

However, in your humble servant’s opinion, it is time to bring the Israel natural gas fiasco to an end and get on with exploration and production.

 

 

 

 

 

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