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October 20, 2014 / 26 Tishri, 5775
At a Glance

Posts Tagged ‘gas’

How Israel Should Use Its New Found Energy Wealth

Sunday, February 3rd, 2013

On the one hand, Israel is on the verge of a positive development whose importance is hard to underplay. As Caroline Glick described it,

This weekend Israel reportedly conducted its first successful test pumping of natural gas from the offshore Leviathan natural gas field. In the next four years, Israel will become a major natural gas exporter and will make great strides in developing its recently discovered shale oil deposits. Israel’s emergence as an energy exporter will have a transformational impact on Israel’s economic independence and long-term viability. [my emphasis]

But on the other hand, the security challenges Israel faces today from Iran, Hizballah, Egypt, Hamas, etc. have never been greater. The international delegitimization campaign against it, led by the U.N. and financed to a great extent by the European Union continues to gather steam. Jew-hatred and anti-Zionism have merged, with the former gaining cover from the latter, creating the least favorable social climate for the Jewish people since WWII. Academia is almost universally hostile, and Israel (and Jewish students) are attacked more viciously on college campuses than ever.

So how can Israel’s new energy resources be given a “transformational impact” on these problems? Here are a few ideas:

First, Israel should make mutually beneficial agreements with the major transnational energy companies. It should be made clear that these deals are contingent on their support for Israel’s political goals. It certainly worked for the Arabs — I remember Exxon Corporation publicly calling for a more “even-handed” approach to the Middle East immediately after the war in 1973. I have often speculated that the influence of these companies has been responsible for the irrational but unswerving U.S. policy to try to reverse the outcome of the 1967 war.

Second, Israel should give generous gifts of its soon-to-be-available gas and oil dollars to major universities in Europe and the U.S., to establish departments of Jewish and Israel studies. These departments should be staffed by academics who do not hate Israel and the Jewish people (I’m sure they can be found, especially when there are endowed chairs for them to sit in).

Third, Israel should build a massive satellite TV/radio/Internet channel, broadcasting in multiple languages to all parts of the world. This channel should present entertainment, news and cultural programming attractive to as wide a range of viewers/listeners as possible. Again, media people who who have positive attitudes will appear when the opportunities for employment do.

Fourth, Israel should create independent think-tanks and scientific institutes in major democratic countries which will produce papers and articles — academic and popular — on important topics. Some proportion of the jobs in these institutes should be reserved for retired politicians.

Fifth, Israel should award international prizes for achievement in scientific and cultural fields.

Sixth, Israel should establish an institute for technical training where promising students from developing nations can come and study at no cost.

And seventh, despite all this, Israel must maintain and improve its military capabilities to deter aggression and terrorism.

Visit Fresno Zionism.

‘Quick Peace’ Losing Ground as US Gas and Oil Surpass Arab Production

Sunday, February 3rd, 2013

Geologists have discovered a layer of shale saturated with natural gas and oil deep beneath the city of Williston, North Dakota, and the Bakken formation, spanning thousands of square kilometers, has become synonymous with an American economic miracle the country hasn’t experienced since the oil rush of 100 years ago, Spiegel reported Friday.

North Dakota now enjoys full employment, and the state budget shows an estimated surplus of $1.6 billion in 2012. Local truck drivers, for example, are earning $100,000 a year. President Obama has called the discovery of Bakken and other shale gas formations in Texas, Colorado, Pennsylvania, Louisiana and Utah a “stroke of luck,” saying: “We have a hundred years’ worth of energy right beneath our feet.”

According to Fortune magazine, low natural gas prices – natural gas in the United States now costs a quarter of what it did in 2008 – could fuel a comeback of American industry. “Low-cost natural gas is the elixir, the sweetness, the juice, the Viagra,” an American industry representative told Fortune.. “What it’s doing is changing the U.S. back into the industrial power of the day.”

According to Germany’s foreign intelligence agency (BND) study, the political threat potential of oil producers like Iran will decline. In about 15 years, optimists predict, the U.S. will no longer have to send its aircraft carriers to the Persian Gulf to guarantee that oil tankers can pass safely through the Strait of Hormuz.

No one knows what would happen with the Russians, since President Putin’s power is founded on oil and gas revenues. If energy prices decline and Russian revenues go down as a result, Putin could be expected to revert to old Soviet methods of maintaining power, both at home and abroad.

The Arab regimes in the Middle East would have to either use their enormous cash reserves to invest in new products and services (see Qatar’s and Bahrain’s efforts to develop a thriving tourism industry), or slip gently into their former role in world politics, amid the sands of Arabia.

According to Spiegel, German chemical giant BASF has already invested a lot of money in the United States in the last two years. In Louisiana, it has built new plants for the production of methyl amines and formic acid. “The local natural gas price is a criterion that affects the question of where we invest in new production facilities,” says BASF Executive Board member Harald Schwager. At the moment, the United States has a clear advantage over Europe in this regard.”

Dr. Aaron Lerner of IMRA summed this up:

#1. In a few years the US won’t be as concerned about what the Arab think. #2. In a few years the Chinese won’t consider energy supplies from the Arab world as being of paramount importance for its own continued stable growth. #3. In a few years even France and Germany may become energy sources rather than importers.

Certainly sounds like Israel will be in a considerably more favorable position at that time.

So much for the argument that Israel should rush now and cut a lousy deal
with the Palestinians because “time is not on Israel’s side.”

US: Syrian Chem Weapons ‘Locked and Loaded’ on Rockets

Thursday, December 6th, 2012

According to several American television networks, U.S. officials have revealed that the Syrian military is just waiting for the “go” order from the embattled President Bashar Al-Assad.  When Assad’s order comes, aerial warheads which some say have already been locked and loaded with deadly sarin gas will be dropped on the Syrian opposition from dozens of fighter bombers.

Sarin, a colorless and odorless gas, is one of the most lethal chemical weapons.  It is capable of killing thousands of people across a wide swath of land. The gas paralyzes the central nervous system; victims suffocate because their lungs are paralyzed.  Just one drop of sarin can kill a person within minutes.

Speaking at NATO headquarters in Brussels on Wednesday, December 5, U.S. Secretary of State Hillary Clinton said,”Ultimately, what we should be thinking about is a political transition in Syria and one that should start as soon as possible.”  She added, “we believe their fall is inevitable. It is just a question of how many people have to die before that occurs.”

Nearly 40,000 have died in the civil war in the 18 month-long Syrian civil war, and 400,000 have fled as refugees.

Australian Gas Giant Buys 30% of Israel’s Leviathan

Monday, December 3rd, 2012

The operator of Australia’s Pluto liquefied natural gas project, Woodside Petroleum, will buy a 30 percent share in Israel’s Leviathan natural gas field for $2.5 billion, becoming a strategic partner in the drilling.

Woodside, Australia’s second largest oil and gas producer, will make a first payment of $696 million.

Leviathan is expected to start producing usable gas in 2016.  The value of the field is estimated at $8.3 billion.

Israel Corp, Tamar Oil Partners Sign $4 Billion Gas Contract

Monday, November 26th, 2012

Israel Corp. and the Tamar partners signed a $4 billion contract on Sunday, agreeing that Noble Energy, Delek Group, Isramco and Alon Natural Gas Exploration would provide for Israel Corp’s gas needs.

The deal turned Israel Corp into Israel’s second largest natural gas consumer, after the Israel Electric Company.

Though Israel Corp will be needing $10 billion worth of gas, the deal is for the short term, in anticipation of the entrance of competing gas suppliers, including Leviathan.

The deal will enable Israel Corp subsidiaries Israel Chemicals, Oil Refineries Ltd. And OPC Rotem to buy 16-20 billion cubic meters of gas from the Tamar field.

The deal comes after the collapse of an agreement between Israel Corp and an Egyptian gas provider following the fall of President Hosni Mubarak.

Price Freeze!

Wednesday, November 14th, 2012

Hurricane Sandy had knocked down the power lines to Noach’s house. After three days with no electricity, he heard that a neighbor had a spare generator.

“I’m happy to lend the generator to you, but it has no gas,” said his neighbor. “I have jerry-cans for you to fill; you’ll have to wait in line to buy gas.”

Noach had seen the lines at the gas station. The hurricane had severely disrupted fuel distribution and very few stations were open. The line of cars waiting for gas stretched many blocks. Even the line of people with jerry-cans stretched all the way around the corner.

After Noach waited five hours, it was finally his turn to fill up. He was pleasantly surprised to see that the price of gasoline was the same as before the hurricane, even though this was the only gas station operational for miles around. The government had imposed controls to prevent price gouging, requiring the stations to maintain their former prices.

Later in the week, Noach met Mr. Gassner, who operated the gas station. The storm had been a boom for his business. His team had worked hard, dispensing gas non-stop, 24 hours a day, for three days, until other stations reopened.

“It was considerate of the government to freeze the gasoline prices,” Noach commented.

Mr. Gassner, however, was furious about the price control. “It wasn’t fair that the government required us to keep regular prices,” he complained. “People were crazy to buy even a small amount of gas, and the supply was so limited. By market theory of supply and demand, I could have easily charged three times the price. People would have walked away happy that they got anything!”

Noach was surprised to hear this opposing perspective. “It would be interesting to hear what halacha has to say about this issue,” he said to Mr. Gassner.

“Do you really think halacha has what to say about this?” asked Mr. Gassner.

“I’m sure it has something to say,” said Noach. “Let’s go ask Rabbi Dayan!”

The two went over to Rabbi Dayan. “Is there any source in halacha for government regulation of prices?” Mr. Gassner asked.

“This case is reminiscent of a fascinating halacha,” said Rabbi Dayan, “which emphasizes the need for control of the market on critical items.

“The Gemara [B.B. 90a] states that a person should not earn a profit margin of more than 1/6,” explained Rabbi Dayan. “This means that if the item cost him $100, he should not sell for more than $120, which would provide a profit greater than one-sixth of the sale. This regulation is limited by the Rambam and Shulchan Aruch to items that entail chayei nefesh – staple food items – such as wine, oil, and flour.” (C.M. 231:20; Pischei Choshen, Ona’ah 14:8)

“But what about the store’s overhead and labor costs?” asked Noach. “If a store were to charge only 20 percent above its purchase cost from the supplier, it would never break even, forget about a profit!”

“The overhead is added to the cost, as well as basic consideration for time and labor,” explained Rabbi Dayan. “Thus, if the food itself cost $100, the proportional share of overhead is $20, and basic time and labor amounts to another $5 – the base cost is $125 and the store would be entitled to sell for $150.”

“But if other, non-Jewish, stores do not follow this halacha, it’s unfair to limit the individual’s profit,” argued Mr. Gassner. “They may easily mark-up 70-100 percent.”

“This halacha applies only when a beis din has control over the entire market and can force all the sellers to follow suit,” said Rabbi Dayan. “However, if the other stores sell as they please, an individual store owner is not required to curtail his profit margin.”

“What about other items?” asked Mr. Gassner. “Is there any profit limitation for gasoline?”

“The SM”A [231:36] explains that staple food items have a one-sixth limitation, as mentioned,” said Rabbi Dayan. “For items related to food preparation it is permissible to charge double the cost, and for items unrelated to food the store can charge whatever mark-up it wants.”

“So where does this leave us about the price freeze imposed on the gas?” asked Mr. Gassner. “Would halacha view this a fair regulation?”

Microsoft CEO: Israel Is the High-Tech Country

Tuesday, November 13th, 2012

1. “[Australia’s] $30BN Woodside Petroleum is looking at taking an interest in the giant Leviathan gas field off the coast of Israel…. The Leviathan field, discovered in 2010, has an estimated 17 trillion cubic feet (TCF) of gas, making the biggest deep water gas discovery of the past ten years. 50-75% of the gas is slated for export….  Woodside Petroleum Ltd. bids for 30% of the rights to the Leviathan licenses. It is 50% higher than their market value. Woodside is one of the finalists in the licensees’ choice for a strategic partner.

“Woodside’s bid reflects a value of $7.5 billion, compared with analysts’ estimates of $4.7-5.5 billion for the gas field…. ‘Petroleum Intelligence Weekly’ reported that [Russia’s] GazpromWoodside and apparently South Korea’s Korea Gas Corporation (Kogas), are finalists in the Leviathan process…. [The Houston-based] Noble Energy [which controls 39.66% of Leviathan] prefers a Western partner for Leviathan.

“Woodside would fit the bill for Noble Energy: it is a veteran company with deep water expertise as well as building liquefied natural gas facilities for gas exports from its fields off Australia’s northwest coast. This area is considered the most developed in the world, attracting hundreds of billions of dollars in investment in onshore and floating LNG facilities” (Globes Business Daily, October 22, 2012).

2. Steve Ballmer, Microsoft’s CEO 4th visit to Israel: “I’ve arrived to Israel, the high-tech country…. The integration between Microsoft and Israel is natural, because Israel’s high-tech industries are among the global leaders…. I’m energized and inspired by Israel’s innovative capabilities, which have made Israel an important arena for Microsoft….” (Globes, November 2).

3. Intel Corp. CEO Paul Otellini is in Israel: “We are perhaps the largest private employer in Israel (about 8,000 employees in the company’s development and production centers), and most of those employees have technological know-how. Some of our most sophisticated engineering efforts are carried out in Israel…. We have been in Israel for 40 years and we have done many things. We’re here for the long term and we will decide next year regarding our next factory.”

Otellini visits Israel in order to launch the company’s $5 million investment in Israeli high schools over the next four years, in partnership with the Ministry of Education. The project’s aim is to double the number of high school students completing their science and technology matriculation certificate (Globes, November 2).

4. According to the $56BN Swiss bank, UBS – which is currently expanding its Israel wealth management operations - Israel is among the top five promising economies with the highest growth potential.

5. “The UK law firm Berwin, Leighton Paisner (BLP) LLP, Britain’s fifth largest, with 1,000 attorneys worldwide, is expanding to Israel, opening an office in Tel Aviv as part of the expansion of its international operations. The firm’s customers include 59 companies on the Global Fortune 500 list. Its decision is a vote of confidence in Israeli economic growth…. ‘We’re here because the Israeli business world is heading in directions which we see as markets of the future, like China and the Far East…. BLP sees the steady business growth of Israeli companies’ activity in international markets….(Globes, Oct. 30).’”

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