The prospect of an energy independent Israel, thanks to newly-discovered offshore gas fields , has forced Russia to scrap plans to extend a new gas pipeline that would include Israel. Russian Prime Minister Vladimir Putin said the “Blue Steam II most likely will not be extended to Israel for purely financial reasons” and that Israel is unlikely to need this [Russian] gas.” He rejected the suggestion that Russia was imposing sanctions against Israel. Turkish Prime Minister Recep Tayyip Erdogan claimed that the extension to Israel was cancelled as part of a general boycott of the Jewish State since the flotilla clash on May 31, when nine Turkish terror activists were killed after assaulting Israeli Navy commandos, who stopped the ship from continuing on its route to Hamas-controlled Gaza. Russia and Turkey agreed in March to build the second section of the pipeline, linking the two countries via the Black Sea and extending it to Syria, Lebanon and Israel. Analysts for Israel’s Clal finance investment house stated this week that Israelis have not yet internalized the significance of the discoveries, the latest being the Leviathan field off the northern Mediterranean coast and which include as yet undetermined oil reserves. Almost every previous estimate of the size of the gas fields has proven to be understated, and analysts’ latest reports indicate there is enough gas reserve to supply Israel’s needs for more than 20 years. The fields may hold twice as much natural gas as in Britain. “This has the potential to turn Israel into a key regional gas player, competing with the likes of Egypt,” Guil Bashan, an analyst at IBI in Tel Aviv told Bloomberg Business News . “This is also a major plus for the economy and for the partners operating the licenses, which can increase value by becoming major exporters.” Gas and oil investor Yitzhak Tshuva recently declared, “We have turned Israel into a great energy power. Today is a holiday for every citizen of Israel. It's a day of joy.” He also recited the Shehecheyanu blessing for new and happy tidings. The offshore projects also will inject billions of dollars in construction of the infrastructure to bring gas online and will add thousands of jobs, including those for engineers. Another beneficiary will be the environment as electric generating stations switch from coal to gas. The Finance Ministry has not lost sight of the significance of the gas discoveries. Bloomberg quoted Minister Yuval Steinitz as saying that the gas fields “only strengthen the need to establish a committee which will examine the royalties and taxing system which will ultimately make their way into the government’s coffers.”
