Under the covid-19 pandemic, economic activity in various countries has almost come to a standstill. Fossil fuel overcapacity, rapid depreciation and lack of attention have made energy security no longer a pressing issue.
In fact, long before the pandemic, the race for energy had faded in international politics. For example, the United States has seen the shale revolution and has become the largest oil producer in recent years, so it is natural that the United States will no longer regard the resource-rich Middle East as its primary strategic goal.
Israel is also a worthy example. After the establishment of the State of Israel, in addition to being embattled, the scarcity of resources has also become an obstacle to the development of the country. Although Israel's military strength is far superior to that of neighboring Arab countries, the former is really out of reach when it comes to resources. Energy security is national security, and Israel's extreme dependence on foreign energy imports, coupled with the tense political climate in the region, is at stake.
However, in the past decade or so, Israel has benefited from the development of science and technology and luck, and has discovered inexhaustible gas fields, suddenly transformed from the most resource-poor Middle Eastern country in the region into a "resource upstart". At the beginning, the development of the energy industry was not very successful, but in the end, it was able to keep the clouds open and see the moon. How has Israel gone through ups and downs in the past 70 years?
At the beginning of the founding of the People's Republic of China: the achievements of the energy industry were limited, and the surrounding political turmoil became a fatal wound
Israel established itself independently in 1948 and immediately faced the first Israeli-Arab war. Although a great victory, for the new countries that have been attacked by the four sides, stable development is a top priority, and to achieve this goal, it is necessary to ensure energy security.
Israel was born with insufficient conditions and poor resources, so it was very hard to explore resources and encourage the development of the domestic energy industry. In 1952, Israel enacted the Petroleum Act, which regulates the exploration and production of oil and gas inshore and offshore gas fields, licenses oil companies to carry out energy-related business activities, establishes government agencies to provide technical support in this regard, and imposes a more lenient tax rate on energy companies.
Under the impetus of the Israeli government, oil and gas resources began to be discovered in the 1950s and 1960s. In 1955, Israel discovered oil for the first time on its own territory, the Heletz field in the southern coastal plain, and two years later in the Areas of Brur and Kohav. As a result, the three oil fields of Helez, Brur and Kokhav became the main oil-producing fields in Israel at that time. In terms of natural gas, Israel discovered gas fields in the Zohar region of southern Judah wilderness in 1958, Kidod in 1960 and Kannaim in 1961.
Although Israel continued to discover new resources and continued surveys during this period, and explored about 450 survey wells from the early 1950s to the 1990s, it was difficult to find available resources or found that the energy reserves of oil and gas fields were pitifully small, so Israel's energy industry development during this period was not very successful.
In the early days of the founding of the country, in addition to Israel's lack of breakthroughs in the exploration of resources, peripheral political risks also posed a burden on Israel's energy security. In the past 40 years, Israel and neighboring Arab countries have experienced many large-scale wars and conflicts! Of course, war brings crises as well as opportunities.
Israel swept through thousands of armies in the 1967 Six-Day War and occupied the Gaza Strip and the Sinai Peninsula from Egypt. By 1971, Israel's domestic oil production had peaked and it was able to become self-sufficient because the Sinai Peninsula was extremely rich in oil.
Above: Israeli forces take Jerusalem during the 6-Day War.
Unfortunately, after the 1973 Yom Kippur War and the 1978 Camp David Agreement, Israel gradually returned this fat to Egypt, which meant that Israel lost its strong source of oil, which was a big blow. Although the pahlavi dynasty, a pro-American Iranian regime, had good relations with Israel in the 1970s and became an important source of oil imports for the latter, with the outbreak of the Tehran Revolution in 1979 and the fall of the Pahlavi dynasty, Khomeini, Iran's then supreme spiritual leader, immediately cut off oil exports to Israel. Fortunately, Israel, anticipating political turmoil in Iran, has taken precautions to build up six months' oil reserves in advance to avoid threats.
Political instability in neighboring countries has destabilized Israel's energy supply, limiting its long-term and sustainable energy strategy. It was not until the late 1990s that Israel's domestic energy industry did not improve, mainly because of the change in Israeli policies, accelerating the privatization of industries, and opening up foreign oil companies to enter the domestic market to explore and develop oil and gas fields. Since then, domestic and foreign energy private companies have sprung up in the market, such as Nobel Energy in the United States, Delek Drilling and Avner Oil Exploration in israel. They are all succeeding in exploring fossil fuels.
In 1999, these energy companies discovered the Noah gas field in the West Sea in Ashkelon, the first offshore gas field to be discovered in Israel, and in 2000, they discovered the Mary B offshore gas field near the Noah gas field. As a result, the Israeli government has paid more and more attention to natural gas and wants to accelerate industrial development, setting up a gas bureau under the Ministry of Energy in 2002 and officially producing natural gas from the Mary B gas field in 2004.
Overall, in the late 1990s and early 2000s, Israel began to fend for itself on energy. Although it is far from self-sufficiency, it is undoubtedly developing in a positive direction.
Another favorable factor is the energy cooperation between Israel and Egypt. Since the Camp David Agreement, Egypt became the first Arab country to sign a peace agreement with Israel, and relations between the two countries, although up and down, were generally stable. In 2005, a 15-year gas supply agreement was signed, and in 2008 Egypt exported 1.7 billion cubic meters of natural gas to Israel every year, bringing nearly 60% of Israel's natural gas supply to Egypt.
Unfortunately, the deeper the dependence, the deeper the harm. During the Arab Spring of 2011, the Egyptian regime changed, and the Muslim Brotherhood, which came to power through the revolution, became hostile to the Jewish state, which eventually broke relations between the two countries and dealt a heavy blow to Israel's natural gas imports.
Then-Egyptian President Morsi ordered the government to investigate Israel's gas deal with Egypt and accused former Egyptian oil minister Fahmi and businessman Hussein Salim of plotting to sell Egyptian gas to Israel at a lower than market price, costing the country hundreds of millions of dollars. With relations between Israel and Egypt increasingly tense, Egypt cut off natural gas exports to Israel the following year, repeating the plot of Israeli-Iranian relations in the late 1970s.
The damage caused by excessive dependence on imported natural gas has made Israel determined to develop and produce domestic energy and achieve self-sufficiency in energy.
Start over and become an energy upstart
In fact, a year or two before the outbreak of the Arab Spring, Israel discovered two gas fields with extremely rich natural gas reserves, which became a turning point in domestic energy security and regional energy patterns, changing Israel's destiny. In January 2009, Nobel Energy, together with Delek Drilling and other oil companies, discovered the Tamar gas field on the seabed west of Haifa, with proven reserves of 240 billion cubic meters, and the following year, the Leviathan gas field was discovered 30 kilometers west of the Tamar gas field, and the amount of natural gas in this field was further advanced, nearly 600 billion cubic meters.
Together with the surrounding small gas fields, the amount of natural gas found in Israel during this time totaled more than 900 billion cubic meters. If not exported, the windfall would be enough to supply domestic natural gas for more than half a century. According to the data, Israel's domestic gas consumption in 2019 is about 11 billion cubic meters.
Above: A glance at Israel's offshore natural gas fields.
Immediately after the great success of the exploration of resources, Israel developed these gas fields, not only to meet domestic gas demand, but also to export them to neighboring Arab countries. The year after Egypt cut off gas exports to Israel, the Tamal gas field has been rapidly put into production and supplied to the domestic market.
Israel's first destination for natural gas exports was Jordan. In 2014, Israel and Jordan Bromine Company and Arab Potash Company reached a natural gas cooperation agreement to export natural gas to Jordan every year from 2017, and in 2016, Nobel Energy signed a 15-year gas contract with Jordan's National Electricity Company to export natural gas from the Leviathan gas field to Jordan every year from 2020.
Israel's export of natural gas to neighboring resource-poor Jordan is a win-win situation. After that, the same export of natural gas to Egypt, can be described as a turn of feng shui, sitting on a lot of natural gas resources egypt to import Israel's expensive natural gas, of course, Egypt is also to settle the old account of cutting off Israel's natural gas supply during the Arab Spring. In 2018 and 2019, the U.S.-Israel coalition of oil companies entered into a gas contract with Private Egyptian Company Dolphinus Holdings to export 85 billion cubic meters of natural gas to Egypt for a total of $19.5 billion over the period from 2020 to 2034.
Today, Israel has greatly reduced its dependence on imported energy, and its energy self-sufficiency rate has increased significantly. According to the International Energy Agency, in 1990 only 3% of Israel's energy came from domestic sources, and the remaining 97% of its energy came from imports; but by 2018, Israel's domestic production of energy accounted for a great leap to 31% of the overall energy supply, and imported energy accounted for about 69%. The latest data failed to cover the supply of leviathan gas fields.
Above: The main composition of Israel's energy from 1990 to 2018.
In the transformation of Israel's energy mix, we can also see the general trend of Israel's efforts to move towards energy self-sufficiency. In 1990, about 77 percent of Israel's energy consumption came from petroleum products, 20 percent from coal, and the rest from renewable sources. In the 1990s, Israel's oil and coal sources were relatively concentrated, referring to the international trade data website, about half of the oil came from Russia and Egypt, but after the millennium, the oil source shifted to Azerbaijan and Kazakhstan and other Caspian sea countries; as for coal, it has basically come from South Africa, Colombia and Russia since then.
By 2018, Israel's energy structure has changed significantly, with petroleum products, coal and natural gas contributing 38%, 20% and 39% of energy consumption respectively, while renewable energy has remained about 3%. In 2017, oil sources have been dispersed to European countries such as the United Kingdom and Switzerland, as well as Russia. With the rise of its own natural gas, natural gas is gradually replacing oil, and Israel's Ministry of Energy has threatened to completely replace coal by 2025.
As a small country, Israel has been able to slowly practice energy self-sufficiency and get rid of the geopolitical and resource scarcity of its surrounding tensions, mainly because it has discovered enough fossil fuels to use for the past half century. This ensures energy security and thus national security. Natural gas has become the king, and it is also a widely used environmental fuel in the future, so that Israel has no worries about energy, which naturally has a profound impact on its international political strategy.
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