Jun 30, 2022
JERUSALEM WEATHER
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A brief history

One of Israel’s major concessions when it signed the Camp David peace agreement with Egypt was giving up the Alma oil field in the Sinai Peninsula. Discovered and developed by Israel, the field seemed to be Israel’s only hope of becoming energy-independent.

Rather than becoming independent, Israel depended on other countries like Egypt, Russia, and Azerbaijan for oil.

Since then, Israel was known as one of the only countries in the Middle East with no natural resources. But that all changed in 2009 when a large natural gas reserve of 311 billion cubic meters (BCM) was discovered off the coast of Israel.

The current status

Today, Israel’s gas reserves are so rich that they can supply not only Israel, but Europe as well. And that’s precisely what happened on Wednesday when Israel, and the European Union signed a natural gas agreement. The agreement was forged in Cairo as Egypt as the gas will flow via Egypt’s pipelines. Signing this trilateral agreement is Europe’s solution for replacing the Russian gas imports it has relied on for decades.

Western Europe is trying to distance itself from Russia including economic boycotts. This phenomenon provided Israel with a rare opportunity to provide natural gas once provided by the Kremlin.

Ursula von der Leyen, president of the European Commission said in a joint press conference with Israeli Prime Minister Naftali Bennett in Jerusalem on Tuesday: “With the beginning of this war and the attempt of Russia to blackmail us through energy, by deliberately cutting off the energy supplies, we decided to cut off and to get rid of the dependency on Russian fossil fuels, and to move away from Russia and diversify to trustworthy suppliers,” adding that “It is an outstanding step bringing our energy cooperation to the next level.”

“This is a tremendous moment in which little Israel becomes a significant player,” Israeli Energy Minister Karin Elharrar said Wednesday in a statement.

Biblical significance

In the book of Deuteronomy, God uses a type of ‘carrot and stick’ approach to persuade the Jewish people to observe his laws in the land of Israel. One of the curses that God threatens them with if they don’t observe his commandments is that they will be in debt to other nations:

The stranger in your midst shall rise above you higher and higher, while you sink lower and lower. he shall be your creditor, but you shall not be his; he shall be the head and you the tail. (Deuteronomy 28:43-44)

That may have been a prophesy fulfilled when Israel was an energy dependent nation.

But an in an earlier chapter in Deuteronomy, God promises that if the Nation of Israel is loyal to his commandments, they will become a type of provider for other nations:

For Hashem your God will bless you as He has promised you: you will extend loans to many nations, but require none yourself; you will dominate many nations, but they will not dominate you. ( Deuteronomy 15:6)

It is mentioned again later on in Deuteronomy as well:

Hashem will open for you His bounteous store, the heavens, to provide rain for your land in season and to bless all your undertakings. You will be creditor to many nations, but debtor to none. (Deuteronomy 28:12)

And this blessing is mentioned several passages earlier in the same chapter as a promise of what will happen if the Jewish people do indeed observe God’s laws in the land of Israel: But Israel going from energy dependent to not just energy independent, but energy supplier could be precisely the blessing referred to in that passage.

In 2020, Israel365 News reported that Israel issued a $5 billion bond offering. Amazingly, this bond offering was oversubscribed by a factor of 5 times that, meaning that Israel could have borrowed $25 billion. The interest rate that Israel got was also very competitive. Lower credited countries typically have to pay higher interest, and Israel is considered to have a high credit rating, so the interest was lower Even with Israel’s increased international debt obligations as a result of this bond offering, from the late 1990s until today, Israel has become a net CREDITOR to the international community.