Thursday, July 05, 2012

Israel's New Energy Potential: New Agreement With Russia Is Only The Beginning

Walter Russell Mead writes that already Israel’s Emergence As Energy Superpower Making Waves:
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.
One impact of Israel's predicted oil reserves are new partnerships, actual and potential:
  • Israel and Canada have just signed an agreement to explore and develop Israel's shale oil reserves
  • Israel and Russian company Gazprom will cooperate on gas extraction
  • Rome may want to deal with the more dependable Israel for its energy needs instead of Iran
  • India may want to turn to Israel, just as it has in other agreements
One ironic twist that Mead notes is that with new oil competition from the likes of Israel as well as Canada, the US and China, OPEC may turn to what is for the Arab countries a new and novel strategy: raising production and lowering prices instead of raising them.

Yet the bottom line is that as Arab production drops and Israeli oil production increases:
  • We may expect to see Arab influence start to decline
  • World interest in events in the Middle East, barring a nuclear race, will drop
  • Turkey, where Erdogan has made a point of increasing tensions with Israel, may miss their old friend and their desire to be a major player in the area will suffer a setback.
  • The Israel-US relationship may change as well, since with new friends Israel will be less dependent on the US and the whims of its presidents, and a more valuable ally.
Read Walter Russell Mead's entire article.

The fact that the future of an oil-producing Israel go way beyond issues of improved economics to real game-changing possibilities is exciting. We may find that without the power and threat of Arab oil, the UN may actually become again something useful.

Hat tip: Instapundit

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