The conference, which took place between November 18 and 20 next to the Dead Sea, was a great opportunity to learn all about the potential of Israel as a frontier hydrocarbon region as well as the pitfalls of doing business in the country.
Israel not only has several trillion cubic feet of offshore gas that is being developed offshore by Noble Energy and its partners, it also has a huge onshore oil shale opportunity thanks to the work of Dr. Harold Vinegar – a former Chief Scientist at Royal Dutch Shell plc. Dr. Vinegar, who I was fortunate enough to have dinner with while at the conference, has a grand vision of using an in-situ heating method he has devised to extract oil shale contained within Senonian Bituminous source rock that is prevalent throughout a large part of Israel. Indeed, Dr. Vinegar conservatively estimates that the country could hold as much as 250 billion barrels of such oil shale onshore.
However, UOG 2014 also raised important questions about whether Israel has the right regulatory set-up in place to properly exploit its newfound oil and gas wealth. Not only did speakers – such as Dr. Ruth Dagan, who heads law firm Herzog Fox & Neeman’s environment and climate change practice – complain of “erratic and unclear” oil and gas regulations, but chats with delegates revealed to me a strong sense that the Israeli government needs to sort out the rules under which oil and gas firms will operate.
And then there are the inevitable political questions regarding Israel and its relations with the Palestinians and other countries in the Middle East. To say that relations between Israel and the Palestinian National Authority haven’t been good recently would likely qualify for the understatement of the year.
However, Israel’s emerging oil and gas industry – as well as the existence of some one trillion cubic feet of gas in Palestinian waters offshore Gaza – offers some hope for a more peaceful coexistence. One session at the conference showed how private businesses could cooperate to exploit gas resources and improve energy infrastructure in the Palestinian territories, where demand for electricity far outstrips supply. Meanwhile, Israeli companies now have gas export deals in place with companies operating in Jordan and Egypt.
The UOG conference was reasonably well attended given that it represented a first foray by the organizers into Israel, with some 160-plus people from Israel and abroad making their way to the Dead Sea for the event. There is a second UOG conference scheduled for next year, when – hopefully – progress will have been made not only with Israel’s oil and gas regulations but also with helping the Palestinians to provide for their energy needs.