After years of searching, Israel four years ago made the largest gas field discovery of the decade — 80 miles off its coastline, deep in the Mediterranean Sea.
For a small country that had been wholly dependent on energy imports since its creation, often forced to rely on hostile neighbors for its supply, the Leviathan discovery instantly changed the country’s energy landscape and allowed Israel to begin exporting natural gas for the first time in its history. But there’s a hitch. While Israel has a solid reputation pioneering new complex technologies including cyber security and desalination, it has no experience pumping gas from the ground.
In late October, Amit Lang, the director general of the Israeli Ministry of Economy, spent two days in Houston meeting oil and gas executives at four large companies in an ongoing effort to lure exploration and production firms to develop two offshore plays — the Leviathan and Tamar — where vast supplies of natural gas wait to be unlocked.
Charged with helping promote Israel’s international trade policies, Lang stopped in Houston as part of his broader U.S. campaign to forge strategic alliances between Israeli and U.S. companies.
Lang spoke with the Houston Chronicle about Israel’s efforts to attract more investment into its energy sector and the potential Israeli companies have in helping solve some problems plaguing the U.S. oil and gas industry. Excerpts, condensed and edited for clarity:
Q: Give me the elevator pitch you gave the Houston executives you met. Why should U.S. companies be interested in Israel?
A: Israel is considered to be one of the most innovative countries in the world, maybe second only to Silicon Valley. 6.3 percent of the world’s venture capital is invested in Israel. And that’s a lot because Israel is very small. It’s only 7 million people but we have 24,000 startups. We are No. 1 in the world for startups and capital.
Q: What benefit does that provide specifically for oil and gas companies?
A: Put aside for a minute the fact that Israel discovered the biggest natural gas discovery in the last decade. Because Israel is such a small country in such a harsh area, and for 65 years the country hasn’t had any natural resources, she had to invent herself from scratch every time. Take for example the water issue. Israel is cursed when it comes to water, especially in the last two decades. No rain, no natural water resources. Israel decided to invest in water technologies. The country came up with some of the biggest breakthroughs. Israeli technology can provide desalination at the lowest price today in the world — 50 cents for a cubic meter (35 cubic feet). It’s close to the marginal cost of delivering normal water. Moreover, Israel is reclaiming 80 percent of water for agriculture. The country is the first in the world to do that. This is the way Israel works. The country always comes up with the technology and solutions for the problems, starting with its own problems but in many cases, Israel’s problems are world problems. A lot of companies developing technologies for the needs of oil and gas companies – water, information technology and cyber security, for example – can find solutions in Israel.
Q: Let’s talk more about Israel’s water developments. Water conservation has become a big deal for the oil and gas industry as hydraulic fracturing has taken off in the United States. The well completion technique pumps lots of water underground, which is sparking some concern, particularly in drought-stricken shale plays.
A: These companies are concerned. I can tell you that from our conversations.
Q: So what solutions do Israeli companies have to offer?
A: We have companies doing desalination, reuse, filtering and identifying contamination in the water at a very low-cost and with very high-performance. We have all kinds of physical and technological solutions for saving water, starting with the hardware itself like smart meters, and ending in IT solutions. Some of the technologies at first were developed to deal with plain water. Now they have to be upgraded to adjust to the needs of the oil and gas industry. Because of the oil and gas discoveries in Israel, more than 100 companies were founded to try to find solutions for oil and gas.
Q: Israel, since its creation, has always been an energy importer and now the country is in the position where it has more than enough gas, enough to export. Given that Israel has no experience in drilling and extracting gas, what sort of support does Israel need from U.S. companies that have this expertise?
A: Currently, there’s only one U.S. company in Israel — Noble Energy — and we have a very good dialogue. They are very open to cooperating with the Israeli industry in order to teach them and help them adjust to their needs. We’re also talking with Noble about training and recruiting the Israeli workforce. That would be better for Noble because it wouldn’t have to import workers from far away. We also think Noble can teach us things we need to know about this industry. We very much hope that other companies based in Houston, the big oil and gas companies, will also go into Israel and get a license for exploration so we have more competition. It’s not good to be in one company’s hands. All the predictions say that our gas discoveries are not done. We probably have more gas around the Leviathan. And we need more companies to come get licenses for exploration. In my meetings here, I’m telling the companies, “Come and get a license. You might find gold.”