So says the headline in the Globe and Mail.

See:

http://www.theglobeandmail.com/report-on-business/with-its-oil-treasure-israel-gets-a-shield-from-tyranny/article2078985/

>>The London-based World Energy Council says Israel’s Shfela Basin, a half-hour drive south of Jerusalem, holds 250 billion barrels of recoverable shale oil, possibly making the energy-vulnerable country (as expressed by The Wall Street Journal) “the world’s newest energy giant.” With reserves of 260 billion barrels, Saudi Arabia would remain the world’s No. 1 oil country – though not, perhaps, for long. Howard Jonas, CEO of U.S.-based IDT Corp., the company that owns the Shfela Basin concession, says there is much more oil under Israel than under Saudi Arabia: Perhaps, he says, twice as much.>>

Oil and gas from shale has been a dream for over 50 years. Shale gas is already a reality and has altered the dynamics of the global energy market.

Maybe a combination of higher crude prices and advances in technology is about to turn the shale oil dream into reality as well.

Or is it a shale oil nightmare?

Either way we could be in seeing the beginning of a new energy world order.

A few additional points

--Both the US and China have vast shale oil deposits. Even if only for strategic reasons both are likely to exploit at least some of this potential. They see their long oil supply lines as a strategic vulnerability.

--While I do not see shale oil supplanting conventional crude the extra supply will most likely serve to rein in prices and reduce OPEC’s political and economic clout.

--For some countries – notably Iran, Nigeria, Venezuela and Russia – lower prices could have severe economic consequences. Even Saudi Arabia may be forced to scale back its ambitious development goals.

The process used is not “fracking”. This is unlikely to work in extracting shale oil. Instead a more environmentally friendlier process proposed by Shell’s former chief scientist, Harold Vinegar, is the most likely candidate.

>>They [the investors] have enlisted Harold Vinegar, former chief scientist at Shell Oil, with 240 patents to his name over his 32 years at Shell. Vinegar has come out of retirement to assist IDT in developing an extraction process. Vinegar claims the oil Israel will produce will be light crude suitable for refining into jet fuel, diesel and naphtha.

Vinegar has suggested inserting heated rods into the ground by drilling and those rods will in theory cook the rock into releasing the oil and natural gas so it will flow freely to the surface. The oil will be refined and the gas used to feed the heating process and keep the project running. All in costs are expected to be $35-$40 per barrel.>>

http://www.oilslick.com/Commentary/?id=2907&type=1

A decade ago few would have predicted that shale gas would revolutionise the global market in natural gas. Yet here we are.

Technology does have a way of confounding our predictions.

Personally I would like top see us Move away from fossil fuels. But if we are going to rely on oil I would prefer it come from sources other than OPEC.

there will be no change in the world 'order'...lol

i note one yanki oil company holds the rights
so the best they could get is royalties

http://www.google.com/search?hl=en&q=who+owns+Shfela+Basin%2C&btnG=Search&oq=who+owns+Shfela+Basin%2C&aq=f&aqi=&aql=&gs_sm=s&gs_upl=7787l18071l0l10l10l0l0l0l0l0l0ll0

[that still wont come anywhere near
what usa has given them..[over 1 trillion]

thing is shale oil/processing..COSTS HEAPS
is a most energy expensive process

[and we KNOW whats happening to the price of energy]..lol

more important
is who own it

[or rather
why reveal the info now*]

does this releaase of info..[at this time]

have anything to do with
""*the gaza floatilla*""

or israeli mossad
entering friendly harbours
to sabotage the gaza boats...drive mechanism's?

two ships 'screws'
have been sabotaged so far

or maybe its a destraction...from
greece refusing to let them set sail?

[because they dread being held to account
for the next mossad assasination cam-pain..upon a harmelss flotilla?

simply trying to bring aid
and comfort to the semites
not born jew?

unluckey enough
to be born [heirs]..in gods land's
if anyone..the shale belongs to them
[native to the land]..

royalties should go to them
not the oppressors..[natzies]..
turning gods holy lands into prison camp's

colonial loot and plunder
101*

Dear Steven,

Wow! Where do I buy shares?

But a couple of questions first.

Is the resource there in abundance and is it of good quality?
With such deep drilling - what is the risk to aquifers?
What are the economic risks? Will the price of oil continue rising?
Finally will the project be capable of overcoming criticism from
environmental lobbies and win popular (and financial) support?
Will the costs involved be worth the risks?

Lexi

Don’t rush to buy shares. This is still a high risk venture. I wouldn’t expect to see any returns for at least a decade.

That being said experience indicates that when the price is right the technology to develop the resource arrives. With oil hovering close to $100 / barrel and demand SOARING the price is definitely right.

In 1950 who thought we could drill into the seabed to recover oil? In 1995 who thought shale gas would change the world’s natural gas market? The Athabasca oil sands lay unexploited for over a century. Now production is close to 2 million barrels / day. In fact Athabasca is producing almost as much oil as Iran. It is a very environmentally unfriendly method of extracting oil.

Technology always seems to win in the end

The method of extraction that is proposed for shale oil, hot rods, is much less environmentally damaging than fracking or tar sand extraction. There should be little risk to aquifers.

My guess is:

--The technology will be developed

--The technology will be used

--It will alter the balance of power vis a vis oil producers and consumers

Don’t ask me for a time frame but I’d say less than two decades before large scale production starts.

Incidentally Israel is already set to become a natural gas exporter and the Jordanians have expressed an interest in buying Israeli natural gas.

See: http://www.english.globalarabnetwork.com/2011070611108/Energy/planning-for-the-future-jordan-setting-up-nuclear-energy-programme.html

Best though would be to develop alternative technologies to the point where we no longer needed shale oil.

Dear Steven,

Thanks for responding so quickly to my questions and what you've stated makes a lot of sense. I will be looking at these developments
with interest. A future investment may be the way to go.

Lexi

Investing in shale oil is placing a bet on the future price of oil. If demand for oil continues to rise and prices remain at their current level or go higher then shale oil technology investments will pay off handsomely. Fortunes will be made.

If not 100% of the investment will be forfeit.

So this is not exactly the week’s safety bet. Here are just SOME of the scenarios that could derail the whole project.

(1) An Israeli electric car initiative called “a better place”.

See: http://www.betterplace.com.au/

I’d far rather see this one succeed than shale oil

(2) Artificial chloroplasts (photolysis)

Chloroplasts are those marvellous nanomachines in plants that use sunlight to split water into hydrogen and oxygen. The hydrogen is incorporated into sugars which, directly or indirectly, powers all life on Earth. In that respect we already are on the hydrogen economy.

As we learn more about chloroplasts the idea grows of building artificial nanomachines to split water into hydrogen and oxygen. The process is known as photolysis.

I have no doubt we’ll crack it eventually but it could take a decade or three. Still, who knows?

(3) Genetically engineered bacteria

Plants are not the only organisms to do photosynthesis. Cyanobacteria got there first. As our genetic engineering skills grow we may be able to engineer bacteria to produce hydrocarbon fuels. In effect, no artificial chloroplasts, just artificial bacteria.

Again I am certain we’ll get there but it may take a decade or three.

(4) Better batteries and capacitors to store electricity.

This too could make electric cars a real possibility.

If all this sounds like sci-fi so did faster than sound aircraft and radar and mobile phones once upon a time.

I’d bet on at least one of these 4 to get there eventually; but shale oil extraction may get there first.

How long before Hamas/Fatah decide that they own it? Jordan must be kicking itself

Custard,

Jordan too has significant shale deposits. They would benefit enormously from any such development.

And, no, I don't think they'll be keen to share any windfall with Hamas.

The West Bank doesn't seem to have much in the way of shale deposits and Gaza none. Most of Israel's shale deposits are within the 1967 boundaries.

Yet within the area claimed by Hamas? I'd expect Fatah to get in on that act too, not to mention the UN.

I suspect that the current situation, with the ability of Iran to close the Persian Gulf at will, that the development would proceed rather more rapidly. The border with Jordan and Eilat would presumably be one route for export, especially as Jordan would benefit from sharing the facilities, securing pipelines.

Developing the industry is going to take some work, but if Israel and Jordan worked on it presumably the Gulf of Aqaba (http://en.wikipedia.org/wiki/Gulf_of_Aqaba) will also need to be developed, the reefs and marine environment in the Red Sea would presumably be fairly significant hurdles.