The Leviathan is a massive natural gas field off of Israel’s coast in the Mediterranean Sea.
It was discovered in 2010 and is estimated to have about 19 trillion cubic feet of natural gas reserves. These can be harvested by drilling over 5,000 feet below the sea and into the bed where Noble Energy (NYSE: NBL) struck a high pressure zone back in 2012.
The Leviathan find added to Israel’s modest reserves, and makes it a larger player in a region known for its oil more so than its gas…
According to the EIA, the Leviathan could see commercialized production begin in 2016.
But as you know, the Middle East is a chaotic place rife with deeply engendered religious conflict. Although much of the talk as of late has been about Iraq and ISIS, the newest conflict involves Israel and the Palestinian Sunni organization Hamas.
Once again the two sides are trading blows, with Israel looking like the better equipped aggressor.
According to various news outlets more than 100 Palestinians have been killed. Of those 21 were children. While Israel has seen only minor injuries and no deaths, the government has called up 33,000 reserve soldiers in response to the continued air strikes from the militarized side of Hamas, based in the Gaza Strip.
It may seem callous to call your attention to natural gas production when rocket fire is killing people, but if Israel calls up more reserve troops and moves in on the ground, development of the Leviathan field could stall.
As the government pulls itself into a violent conflict, the first since an eight day war in November 2012, it seems they could end up shooting themselves in the foot.
You see if Israel sends ground troops, progress at the Leviathan field could be blunted, pushing back the start date even further. Once again Israel is focused on another religious conflict instead of improving their economy.
If Israel really wanted to exert power and influence over Gaza they would use their energy resources strategically instead of simply engaging in missile fire.
As of right now though it looks like the two foes are at an impasse with leaders on both sides claiming that they would act to end violence, but with no actual stop to the strikes.
Hopefully they can resolve their differences in a short time as with their most recent conflict. If not there could be reverberations all over the middle east that could send energy prices even higher.
Until next time,