The Huge Impact of Israel’s Energy Reserves

Mr. Solomon introduced his remarks by discussing examples of how worldwide demand for petroleum has created a hostile diplomatic environment for Israel:

• The first oil crisis initiated by OPEC after the 1973 Yom Kippur War led to Israel’s international isolation when the Saudi “oil weapon” was used to punish any country supporting the Jewish state. Before the oil embargo, Israel had been admired in the West, oil was cheap, and the Arab countries were recognized as belligerent military dictatorships. Once the Arabs threatened the West with their oil weapon, the western media and the left turned against Israel. Within a year, the PLO’s Yasser Arafat was invited to speak at the UN. The following year the UN General Assembly branded Zionism as racism.
• Israel’s good relations with Black Africa emanating from the agricultural and technical assistance it provided since the late 1950s evaporated in the early 1970s when the Saudis used the oil weapon as financial blackmail to sever the ties between them. An anti-Israel African-Arab-non-aligned voting bloc was formed at the UN. The oil multinationals effectively drove a wedge between Israel and the West, which feared losing access to the Arab monopoly over the energy supply.

Mr. Solomon projected that within the next one to two decades, the Muslim nations will lose their oil weapon and diplomatic clout due to a new emerging energy order. Recent discoveries of plentiful global resources of shale oil and shale gas reserves, in combination with technological advances in “fracking,” the hydraulic fracturing technique used to obtain the oil and gas from shale’s permeable geologic formations, will enable many countries to be less dependent on energy imports. According to Solomon, shale oil will be so abundant that in the future China will join the ranks of energy exporters, and a total of thirty-eight countries in every region of the world could achieve energy self-sufficiency. The boom will push prices down and North America, already engaged in developing its immense amounts of shale, can become energy independent in a decade.

Israel is among the beneficiaries of this energy bonanza. The discovery of large shale oil resources on its land and natural gas reserves in the Mediterranean’s Levant Basin near Cyprus, will enable it to become a major natural gas exporter to Europe. In addition to creating the potential for wooing back former allies in Western Europe, these discoveries are already enabling Israel to form commercial and military alliances with Cyprus and Greece to coordinate gas exploration and extraction and thwart Turkey’s belligerence.

Gazprom Israel, a new commercial partnership formed with Russia, provides geopolitical as well as economic benefits for the Jewish state. Among Russia’s motives are the desire to influence the price of gas going to Europe and accessing Israeli know-how in countering Islamist terror threats in Russia. Given Russia’s historic rivalry with Turkey and Iran, its growing military ties with Israel will serve as an additional political tool in the Jewish state’s arsenal to protect its energy development and to secure its future.