Fracking fractures old oil dominance

Arthur Herman:

Imagine a future meeting of the Organization of Petroleum Exporting Countries, where the agenda is set not by Iran or Saudi Arabia, but by the United States. Oh, and the meeting takes place in Tel Aviv — because the other big power in OPEC is Israel.

That’s where the world is headed, thanks to the miraculous new technology known as fracking.

Hydraulic fracking uses water, sand and trace chemicals under high pressure to crack open deep deposits of shale oil and natural gas. Here in the United States it’s pushed domestic output of both to the point that, according to the International Energy Agency, we’ll be the world’s largest oil producer by 2020.

But fracking is also about to turn the Middle East upside down: Israel is poised to become the region’s new energy Mecca. Indeed, the Land of David just might be the energy-richest spot on earth.

How rich? By one estimate, Israel’s total oil-shale reserves come to 250 billion barrels. Mind you, Saudi Arabia’s total oil reserves are 260 billion.

A single shale oil field in the Elah Valley near Jerusalem, for example, is estimated to hold some 500 million barrels — enough to satisfy Israel’s energy needs for five years.

Israeli fracking production is still tiny, and costs are still higher than drilling in the Saudis’ Ghawar field or Kuwait. But as fracking technology continues to advance, and Israel opens up both its shale oil reserves and some 16 trillion cubic feet of offshore natural-gas deposits, the Jewish state could soon move far beyond energy independence and become a major oil and gas exporter.

In a world where oil and gas demand is expected to rise 35 percent in the next quarter century, the implications could be staggering.

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Israel may get some support from its neighbors, but it is just as likely to get new attacks by those who want the riches for themselves.  Israel must be ready to defend itself and its new wealth because the religious bigots of Islam are unlikely to become friends.