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Some Applications of Non Equilibrium Thermodynamics Thinking to Current Geopolitical Issues

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In recent decades, there has been a development of several related concepts, some under the category of thermodynamics, which may be applied, to some degree, to the current geopolitical scene.

One is the perception of organization in this universe as ordered energy flows. This perspective can be characterized as ‘‘non equilibrium thermodynamics”. Probably the foremost and broadest scale explicant of this way of looking at the universe is cosmologist Eric Chaisson, now at Harvard. One of his signature books is ‘Cosmic Evolution’ .

Chaisson quantifies energy flows, and relates them to structures, at stellar, galactic, planetary, and even life levels. He relates complexity, at each of these levels, to ‘energy rate densities’. Somewhat surprisingly, he points out that energy rate densities in life forms exceeds those of cosmic structures such as suns. He also identifies energy rate densities of different types of life organization, such as plants and animals, and even the structure of industrial human activities, such as cities, airplanes, etc.

On separate but related themes, explorations of concepts such as ‘hierarchy theory’ and ‘emergence’ have shown that all structures at the scale humans perceive are in a sense hierarchic. Simple atoms make up complex, heavy atoms, atoms make up complex elements often described as molecules and chemical species, molecular structures make up, or are involved in, life structures, single cells make up multicellular organisms, both single cells, at their level, and multicellular organisations make up what we tend to call social systems, and so forth. (e.g. in currently visible human terms, cities are clumped in States, or provinces, states in an United States, ‘nation states’ around the world in the United Nations; or at lower levels franchisees under franchisors, etc,) In this framework, each level of aggregation is seen as a system of relationships, and a differentiated unit at that level joins with other elements, or systems, in a set of stabilized relationships to form the next level of hierarchy.

All these ordered systems involve — or more accurately consist of — stabilized energy flows, or, equivalently, stable systems of relationships, in energy flows. A condensed public summary of this perspective, with citations, is available.

Insights which arise in this perspective include that all organization is combinatorial — combinations of elements. Relatedly, ‘emergent’ effects of any combination of elements upon other combinations which it encounters are the effects of the organization as a whole as distinguished from the effects of its components might have were they not bound in their particular organization. That is, all organized systems are identified and in effect measured, or given meaning, by other systems in terms of the relationships system-to-system, so to speak.

This is an highly condensed overview, but one can get further, and somewhat complementary, clues concerning the stream of thought by looking at some of the work involved in the International Big History Association, including some of its leading members such as Fred Spier and David Christian. This Association traces cosmic evolution from its origins through human historical processes, in a variety of ways and from a variety of perspectives. The Association is recently formed, and its work is evolving in form and content.

Another architectural insight has been offered by Mark Buchanan, in his book ‘Ubiquity’ , to the effect that, as far as he could identify, all phenomena seemed to fall on ‘power law’, or log normal, statistical distributions — wars, city sizes, wealth distributions, earthquakes, etc.   This author has suggested that this is because all ordered phenomena consist of, or arise from, correlational processes, and such correlational processes produce this sort of statistical distribution.

Lastly, for initial introduction, a set of theories, or concepts, called ‘maximum entropy production’ (MEP) suggests, in general layman’s conceptualization, that given a differential (e.g. heat, or temperature, differential), it will be dissipated by all available means, and at situation-quantifiable rates, with common statistical signatures.  

Now to human societies, and the relationships between them. Each society is a group, and a group of groups. For each of these groups to have sustained coherence, its constituents must have stable inter-se relationships, or systems of relationships. But for any given group or set of groups to coexist with others, rather than devouring or being devoured by others, they must work out modi vivendi, so to speak. They must somehow establish complementarities, or symbiotic relationships, or at least non-lethal sets of relationships. Each and all must have an energy basis — a flow of energy into and through the stable system of relationships.

In large scale agricultural society examples, all ‘empires’ are hierarchic, in the sense of being made up by a coordinating mechanism which maintains relationships between component elements.

In analysing any given society, or set of them, we have to follow the energy flows. Karl Marx’s thesis that societies are structured by their means of production translates into the view that any given society, or set of them, will have institutions (regular patterns of activity embodying energy flows) which feed off of, embody and maintain the energetics of the system.

‘Agricultural’ societies can be seen as group-organized means of harvesting the photosynthetic capture of energy by plants, plus the energy of other-animal harvesters of the plants (‘livestock’). ‘Industrial’ societies maintain the plant and animal harvesting base, but have taken flight, so to speak, by capturing stored and concentrated energy of the residues of past eons of plant life on earth.

Since this cache of stored plant energy is finite and its boundaries are visible, it increasingly appears that if the multibillion human complex thus created is to be maintained in some form, over decades and centuries, humans will have to move to reliance on artifactual photosynthesis (AKA ’solar energy’), supplemented by wind energy, tapping the energy of breakdowns of heavy, complex atoms (nuclear energy), and perhaps some trace additions of current and earth-stored biological photosynthesis. Perhaps the best references for the data and analysis underlying this perspective are an international review of renewable energy sources,   and a conceptually elegant report by Sandia Laboratory personnel.  

We currently tend to call this a ‘renewable’ energy society. But it can be seen as a larger scale, current technological, or artifactual, or human-mediated, direct harvesting of sunlight, bypassing the biological processes of other organisms, past and present. In addition there seems a likelihood of harvesting of the differentials created by differentials in sunlight on the Earth’s surface (wind energy), with limited additional sourcing.

We tend to think of this all as a human created and engineered mastering of energy flows. But let us try to look at it from the Universe’s point of view, were the Universe to bother itself, apart from creating ourselves, to have one. From a thermodynamics perspective, from Chaisson on down, one can consider that life itself was created as a means of channelling energy flows to reducing differentials caused by universal ordering, as proposed by Santa Fe Institute researchers.   Derivatively, all our institutions, being driven by energy differentials and flows, and ourselves, can be seen as expressions of thermodynamic forces. We are, from such a point of view, but the enablers of Chaisson’s energy density rate functions.  

Lest this expression be interpreted as a whimsy to attract attention, I will use it to make suggestions about how current and future societies may tend to work out.

Let us consider the turbulent Middle East. Also we can consider the Soviet Union, and nearby Euro-asian areas.

Assuming no system-wide catastrophic breakdown, the stored plant energy potentials of these areas have been and will continue to be tapped. Pipelines will be built. Streams of oil tankers will continue.

This does not mean that there will not be intrastate and interstate maneuvering about where, when, and at what rate. Water flows downhill. But humans make dams, channels, irrigation projects, etc. And we humans do a lot of squabbling about how to create and divide up participation in reservoirs and flow systems over and outside political boundaries. Elinor Ostrom was given a Nobel prize for her careful and extensive work on how such situations, particularly those involving economic ‘commons’, have been successfully managed. Her prescriptions are worth careful attention.

The fractured and fractious political organizations of the Persian Gulf area have been, to some extent, and are likely gradually to be shaped to allow these energy concentrations to be distributed, or, to use MEP logic, dissipated. If democracies cannot reliably be constructed, autocracies and dynasties will have to conform themselves to these requirements. If they cannot do so, then possibly ‘trusteeships’ might be constructed by the world’s hydrocarbon thirsty and consuming polities. The political entities in the area will be monitored for efficiency and stability. This may lead to assistance, if possible; reshaping if necessary: both from outside their boundaries, and, possibly to a lesser degree, from within.  

Though thinly populated in many of its parts, Russia will, from its vast and central position on the Eurasian land mass, continue to feed gas into the highly organized energy transformation and use systems of Europe, and perhaps also China. It will also continue to be a source of other resources. (There may be some question whether the Easternmost portion of Russia remains European oriented, or becomes Sinified to such an extent as to lead to rearrangement of the State identification and administration.)

Around the globe the hydrocarbon potentials available from fracturing rocks will also continue to be developed, geographically unevenly but widely, on and adjacent to several continents. The phasing will be partially gated over time by relative efficiencies as between the hydrocarbon pools of the Middle East, Venezuela, and Canada, and ‘shale’ systems elsewhere. And the extent and rate of rock mining for hydrocarbons may be affected by the efficiencies of emerging photovoltaics based energy systems. But the techniques and tools are in hand, so to speak, in use, and expansible at current and sufficiently rewarded EROEI (energy return on energy investment) ratios.

Two factors seem likely to limit, or boundary, these extractions from the energy concentrations of life’s past, other than exhaustion. One is the possibility that the atmospheric temperature effects of the gaseous emissions from freeing up all these hydrocarbons — particularly carbon dioxide — will so disrupt the organic processes of current life as to arrest the whole process. The other is, as noted, the apparent potential of tapping the vastly larger solar energy flux of Earth to entrain larger energy flows with lesser disruption of current life patterns.

The first potential limitation has engendered much attention, but limited current effect, other than to lead to some effort to manage replacement of hydrocarbon mining by tapping the global solar energy flux — ‘renewable energy’ technologies, including the ancillary and necessary technologies to make solar energy universal, convenient, and supportive of at least the current level of human activity.

Efforts to coordinate limitations on ‘greenhouse gas’ emissions may slow the rate of increase, but seem far short of capping or reducing such emissions in immediately upcoming decades.

The salient geopolitical consequences of this projected transition to artifactual solar energy are interesting in a number of respects, prominently two.

First, artifactual solar energy capture, like biological, is inherently geographically extensive. The capture systems may be on the whole more southerly (take note, Northern Europe), and less co-located with water (but still dependent on some water to keep the needed biological support mechanisms in place). Whether this leads to massive territory wars like those of the agricultural era remains to be seen. We had best hope not, and strive to avoid them, for urgent reason.

The scope, efficiency and sustainability of this artifactual photosynthetic system seems likely to depend upon a complex web of interconnected resource, processing, and exchange systems implemented by humans, as distinguished from self sustaining (if we do not too much interfere) plants, ocean oxygen emitters, and generally the vast web of biological processes which we call Nature. The combinatorics of this system, globally employed, will be complex, subtle and demanding — of us.

In other words, whatever the array of geographically defined governance systems, if the systems for replacement of ‘fossil’ energy support for humans are to be realized, humans are going to have to construct and durably maintain large, and probably at best global, cooperation systems.

We may characterize these systems in economic, social, institutional, and other terms. But if we are going to get, for example, silicon, lithium, iron, copper, aluminum, etc. from where they are first found, and do all the intricate dances of transporting them, cunningly shaping them into microscopically toleranced formats, in large volume and at large scale, covering them with sand made into glass (or not), and have them harvest energy for decades, we have to have sophisticated coordinating mechanisms (including markets, and thus also including financial markets). And if humans seek a sustainable future of abundance of the sort many humans now enjoy, we can’t be blundering about periodically, or widely, destroying parts of such interconnected systems at will or impulse (read, if you wish, ISIL).

Lastly, for the moment, the imperative for hierarchical construction suggests that central coordinating functions, like those now embodied by the United Nations, will continue to evolve.

I have suggested that the above general directions, or tendencies, emerge from a consideration of order building, non equilibrium thermodynamic forces. However, I cannot assure my fellow humans that life on Earth, and our human part of it, must necessarily realize all the potentials one can envisage. Life, and order building in it, works in probabilistic increments. Over several billions of years, Earthlife has advanced as a whole in mass and complexity, it now appears, but also suffered some catastrophic setbacks in the process.

Whether our species of language and tool wielding ape will be able to achieve and maintain — over centuries — global integration at high levels of energy-fed activity, with current or better levels of individual welfare, is thus very much an open question. We have no good reason to think that an Abrahamic God, or other general Universal Governor, has decreed success for our hopeful projections of organizational potentials of human life on this Earth at this time. We are on our own, in an evolutionary adventure. In Star Wars terms, the force(s) may be with us, but guarantees are not on order.      

This leads to questions about what those concerned with ‘diplomacy’, or forms of facilitating international concert, may need to focus on in order to foster the needed, but far from guaranteed, international coherence. Modern Diplomacy, as a publication, is oriented to this topic.

In a prior post in another publication, I attempted an outline of some major themes, or focal points. In very brief summary, I suggested that we be aware of the central importance of energy flows and hierarchical ordering tendencies, mentioned here, that participants will be required to focus on arrangements which yield sustained mutual benefit to the participating parties (in current parlance, ‘win-win’ solutions), that there need to be monitoring of and controls on parasitism of the coordinated system by the coordinators, or ‘elites’ in the systems, that sound, objective knowledge systems of the sort developed in the sciences, and published through ‘free speech’ and ‘free presses’, be maintained, and that there is a need for continuity in systems (as massive breakdowns in an highly industrialized world may be very difficult, if not impossible, fully to repair).

Some of these suggestions relate to a need to prevent ossified, myopic national and international structures evolving, milked unproductively by national and international elites, stifling the growth potentials of the global human (and life) community.

I also pointed out that however much we wish completely to equalize welfare results for all participants globally, the prevalence of ‘power laws’ in the Universe counsels that we will never be able to do so. The operational possibility to be sought is that the various elements of the system be better off than if there were no system. (The philosopher John Rawls addressed this criterion in a way when he suggested that one approve or disapprove of a given system as if one did not know where one would fit in it.) A refinement of this concept is that an optimal system is one in which no one can be made more well off without making someone else less well off. But this logic does not, strictly, imply that in all circumstances complete equality applies as to all system participants.

On the global scene, both State and non-state actors seek to encourage successful and sustainable global integration. Some current organizations target selected international objectives from time to time, such as, but not limited to, Citizens for Global Solutions, and other organizations seek to create a global ‘parliament’ to parallel and inform the United Nations, promote a global ‘rule of law’ at the UN level and non governmental organization level, promote economic freedom, protect human rights, as by indexing State performance in human rights protection, and inhibit corruption in various polities by indexing State success in doing so. This is only a very limited sketch of such organizations. Please feel free to point up others in any comments on this essay.

The concepts I suggest here provide some support for the specifics of such efforts. Given my background as an attorney, I suggest that the ‘rule of law’ can be justified as an universal requirement by appeal to the basic nature of ordered processes — that is, that there be regularity and thus predictability in component processes — and the requirement that participating elements, such as ‘elites’, do not advantage themselves at the expense of the regularity and efficiency of the whole (the generic word for this is ‘corruption’). This basis goes deeper than others conventionally offered.  

I would also note that ‘human rights’ activities can be justified, perhaps somewhat undramatically and colorlessly, by the requirement that participating human elements in social groups, such as States, be accorded those nutrients and potentials for action which allow them to function with some equilibrium and effect.  

How well are such efforts succeeding? In the IA Forum piece, this author, perhaps parochially, attempted to rate the performance of his own native country, the United States, in meeting these criteria,, or requirements. Readers of this article are invited to correct this rating, and self-evaluate the conformance of their own polities by these criteria, if so inclined.

The effort reflected in this paper to to re-conceptualize some of traditional ‘statecraft’ has resulted in a limited and general set of suggested approaches. Broader efforts can be undertaken. Having had some connection with the US State Department and its education program for its foreign service officers, this author has proposed that such institutions might consider fostering research organizations (in a loose parallel to the US Defense Department’s DARPA) to probe analytically the theoretical and practical underpinnings of State construction and interaction.

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Energy

Potential of Pakistan’s Power Sector

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A few years ago, several hours of load-shedding in Pakistan was very common, even in Islamabad, the capital of Pakistan was without electricity for 6 hours on daily basis. Thanks to CPEC, thanks to China, who has completed several power projects and the people of Pakistan are relieved a lot. Now there is still load-shedding but only for couple of hours. The country was able to produce 16000 MW of electricity in the 7 decades almost. And most of the mega projects were completed in 1960s or 1970. Last 4 decades the nation was unable to add any significant amount of power into national grid.

China helped Pakistan to over-come its power shortage and just within few years, under CPEC, the country was able to add 11000 MW of power into National Grid. There are several power projects under execution or in the pipe line. It is believed, that next couple of years and we may get rid of load-shedding absolutely. However, it is also expected that due to planned industrialization, the demand may also increase tremendously. We still need to focus on the power generation, transmission and distribution. As the transmission is rather old and line losses are rather high. There is a need to up-grade our transmission system on urgent basis. The major issue is still the distribution, which resulted in theft of electricity. Line losses and theft made electricity rather expensive as it has to be recovered from consumers.

However, Pakistan possess potential of 65000 MW hydropower generation. Some of the sits are natural dams and suits for electricity production easily. Building big dams or mega dams, require a lot of investment as well as technical expertise too. But, small dams are easily constructed by our private sector. The requirement of investment is within the reach of our private sector and the technology required is also available within the country.

Dams also store water which will be additional value for Pakistan. As Pakistan is a country which faces water related disaster twice a year. During the rainy season, heavy rains causes flood every year and damages our crops, cattle’s, villages and loss of human live. Floods cause spread of seasonal diseases and epidemics also cause a big loss to nation. Just after a few month, Pakistan faces drought season too. During the drought season, water shortage cause big damage to human life and animals’ and husbandry. Crops suffered heavy losses due to shortage of water.

If appropriate dams are built, it may generate power to meet the national requirements as well it stores water during rainy season to avoid floods and utilize water during the drought season. We can overcome some of our serious problems by indigenous technology and domestic resources, without going to International donors.

Usually building big dams requires a long time 10-15 years, but our political system is based on 5 years tenure term. Most of political parties do not initiate any project, which cannot be completed within their tenure and they get benefits of completed projects during the election. As a practice, most of political parties never takes any initiatives, which may goes to credit of next government. But recently, Pakistani voters have become matured and they understands the worth of long term projects and may vote for those who are visionary leaders and sincere with Pakistan, and take long tern initiatives for the best interest of the nation. Our political parties may also up-date their strategies accordingly.

Not only hydropower, even Pakistan is rich with coal. Only Thar coal can meet the nation’s energy requirement for next 500 years. Coal technologies are on its path of rapid development. There exists technologies to convert coal into natural gas, or diesel. Coal can also help the whole downstream hydrocarbon industry too. Clean coal technologies are already applied in the field. Pakistan can be major beneficiary of its coal reserves.

God has blessed Pakistan with unlimited solar energy. There are areas in Pakistan, where the Sun shine duration is above 300 days in a year, and upto 18 hours of Sun shine on daily basis. This unique potential may be exploited for green and clean energy. Wind is also one of our strength.

What do we need? An enabling policy from Government of Pakistan. The policy may be focused to attract local entrepreneurs based on incentives. Sustainable and long term incentives, and protection may be the priority of Government. Our private sector possess the potential of rapid growth. It may include International market too. But the indigenous know-how and domestic investment may be given priority.

If PTI government can deliver something like this, their next elections are guaranteed to win.  As per my perception, Imran Khan, the prime minister of Pakistan has vision, has will and sincere with the nation, based on our understanding, we expect he will take serious notice of things and include power sector in its priority too.

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Energy

Back to the future

Laszlo Varro

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In the classic Back to the Future movies, the future was powered by a decentralized clean-energy system. Houses and flying cars ran on fuel cells fuelled by residential garbage. The technology itself isn’t particularly far-fetched – not the flying car bit, but the process to power a fuel cell from hydrogen produced by methane from garbage is relatively straightforward for today’s biogas plants.

But time travel aside, what the 1980s vision of the future missed are the actual technologies that emerged started to reshape our energy system in the last three decades since the movies came out – namely wind, solar and battery electric cars. While the present of the energy system is strikingly similar to the 1980s with a practically unchanged domination of fossil fuels, the expectations of what will follow shifted. This is a very different future and one that creates a delicate challenge for the electricity sector.

Transport is a huge and growing energy consuming sector. It represents 28% of total final energy consumption, and is responsible for almost 60% of global oil demand. Electricity is used in transport, though today mostly in electric railways compared to which electric cars are still minor.

If garbage, or, in a more scalable fashion, biomass or hydrogen produced from natural gas, were to provide a clean-energy alternative for transport, the transport sector could move away from oil without integrating more deeply into the electricity sector. There would be no need to deploy new infrastructure to support electric car charging, no concerns about charging times and impacts on power flows, it would be business as usual for electricity.

In addition, garbage is easy to store, and fuel cells can regulate their production in a flexible fashion. In technical terms this creates decentralised dispatchable clean-energy production – meaning it can collect power into a central system, much like the current system. Such a technology would enable the continuation of a hundred-year paradigm of regarding electricity demand fluctuations as a given and managing the system from the supply side.

But, this market is tiny. Only a few thousand residential fuel cells are sold in Japan each year, nothing compared to the millions of solar panels sold around the world. To be sure, solar production varies with the weather and it is often not well correlated with demand. A solar rooftop with a battery in the garage seems like a perfect distributed dispatchable solution and generates increasing attention. However, more than 99% of the solar panels are deployed without batteries – their variability is handled at the system level rather than at a project level. In fact the optimal location is of batteries is often not next to the solar panel but in specific network nodes where their operation can relieve bottlenecks.

Solar and its twin brother, wind experienced a radical technological progress, cost declines and are rolled out at an impressive scale. While the energy system will continue to rely on a diversified set of fuels and technologies, the rapid growth of wind and solar will have to play a key role in tacking  disruptive climate change. Nevertheless, both of them generate electricity which accounts for only 20% of energy consumption today.  The full potential of wind and solar will be realised only if a much higher proportion of energy is consumed by electrifying other sectors, including transport. Such electrification not only reduces direct fossil fuel use in vehicles or buildings, but if done smartly it unlocks need new flexibility sources that wind and solar will need for really large-scale growth.

The transport technology that generates the most excitement is electric cars. Although personal cars represent only a minority of the oil use of the transport sector, electric cars capture public imagination in a fashion that is disproportional to their energy footprint. As a result, they tend to dominate discussions on the future of energy even though ships, aircraft or heavy trucks are most likely to continue to use oil for a considerable time. Linking electric cars to wind and solar creates major opportunities but also challenges. Cars and wind and solar production will need to interact through an interconnected system. An EV can’t be self-sufficient when coupled with a residential rooftop solar panel since solar production is low in the winter precisely when the car has a higher electricity need. In temperate climates, nearly all solar households remain connected to the grid with a changed utilisation pattern and wind is evolving towards a quintessential utility scale big business where technological progress makes wind turbines bigger and bigger rather than small and decentralised.

While early adopter electric cars used in suburban commuting can take advantage of the existing network and charge in the garage of the owner for mass adoption and long distance travel a new infrastructure development will be needed. High capacity chargers will require network reinforcements as well as a careful coordination of when the cars charge. Due to the energy density of hydrocarbons, it is not possible to copy the gasoline lifestyle to the electricity age. Plugging in and quickly filling the car at sunset will be part of the problem, responding to changes in wind with smart charging will be part of the solution.

A dominant role of electricity is not a new dream. The 19th-century science fiction novels of Jules Verne are full of electric cars, battery powered submarines and even electric helicopters. This electric future was delayed by the century of oil, but it is now arriving. Its features are becoming increasingly clear: A new electricity network that is more robust and more flexible at the same time. A new market design that is able to orient and optimise millions of producers, consumers and prosumers giving value to time and location. A new transport system where parking vehicles are not idle but act as active system assets.

Because of its security implications and importance to modern society, electricity will remain a heavily regulated industry where government policy plays a crucial role in guiding the transformation. This complex interplay of technology, investment, policy and regulation shaping the growing role of electricity will be depicted in the upcoming World Energy Outlook focus. In special effects, it might not be up to Hollywood’s standards, but it will be as exciting and innovative.

IEA

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Energy

Israel’s Gas Ambitions are Valid but Challenges Remain

Antonia Dimou

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The discovery of Israel’s natural gas resources promise important benefits of energy security and economic gains. Israel is a leading country because preparations to extract gas are already at advanced stages despite that its gas fields’ development has proved to be a lengthy process.

Delays are attributed to the fact that the fields’ development is capital intensive and entails risks that unsettle investors. A major risk is the lack of energy transportation infrastructure in Israel. Leviathan field partners namely Noble Energy, Avner Oil Exploration, Ratio Oil Exploration and Delek Drilling are likely to develop infrastructure used exclusively by Leviathan, blocking out competitors and endangering prospects for future gas discoveries in Israel. In particular, the likelihood that competitors will have to finance their own transportation infrastructure, raises the costs of developing smaller fields at prohibitive levels. Concurrently, the Israeli Leviathan field’s development, the largest exploration success since December 2010,is capital intensive given that it requires significant investment that will be carried out in two stages: the first stage foresees four development wells with an annual capacity production of 12 billion cubic meters (bcm) of gas, and, the second, four additional wells that would increase production capacity by another 9 bcm.

In regional terms, Israel’s efficiency as a gas exporter is significant. This is evidenced by the signing in early 2018 of two agreements valued $15 billion between Leviathan and Tamar fields’ consortium and Egyptian company Dolphinus Holdings for the provision of 64 bcm of gas over a ten-year period. The agreement are expected to produce three benefits. First, Egypt is a viable export market for Israeli gas and will thus generate interest from foreign energy companies to bid for licenses in future Israeli international auction rounds. Second, the Israeli government would benefit financially from royalties on sales and taxes on profits. Third, Leviathan partners will secure funding for the field’s development.

Reservations however subsist when it comes to the transportation of Israeli gas to Egypt via the existing pipeline infrastructure in Sinai as terrorist attacks on the pipeline could halt exports from Israel as it happened in 2012. The prospect of terrorism raises the cost of the Israeli fields’ development because of the increased risk premium. It is in this spirit that the construction of a subsea gas pipeline that connects Israel to Egypt could present a safer option. In any case, transportation of Israeli gas to Egypt is not only a milestone in regional gas cooperation, but also supports authentic Israel-Egypt normalization.

Israeli government interference in the form of heavy regulation and bureaucracy is a self-inflicted wound that prevents foreign energy companies from participating in bidding processes. Despite the approval of a revised framework for gas regulation by the Israeli government,  the first Israeli bidding process received limited attention taking into account that only a Greek energy company and a consortium of Indian companies participated. Notably, the main outlines of the revised gas regulatory framework included the mandatory sale by Delek Group Ltd, Avner Oil & Gas LP and Delek Drilling LP of all their rights in the Israeli Tanin and Karish fields that are currently owned by Greek Eneregan Oil & Gas Company; and, a stability clause which foresees that the Israeli government guarantees regulatory stability for ten years.

On a parallel level, overlapping maritime claims between Israel and Lebanon over a 854-square kilometer maritime boundary carry the risk of escalation. The January 2018 signing of Lebanon’s first exploration and production agreement (EPA) with a consortium of companies led by French Total as operator, and Italian Eni and Russian Novatek as partners signals competition that could evolve into confrontation over energy resources. Undoubtedly, in the absence of mutual diplomatic recognition between Lebanon and Israel, no trans-boundary natural resource sharing initiative can be taken. The consortium’s announcement that no operation within 25 km of the disputed area will happen leaves room for a third party mediation to minimize the risk of armed conflict and to work on reciprocal acceptance of the 2012 American proposal so that consensual and authorized economic activity becomes feasible. Noteworthy, the 2012 American proposal involved division of the disputed area granting Lebanon a larger share with the aim to serve as basis of bilateral discussions and be deposited with the UN.

To fulfill its energy potential, Israel should speedy proceed with the supply of gas pumped directly from the Leviathan and Tamar fields to LNG plants in Egypt as this will benefit both Egypt’s natural gas industry and development of Israeli fields.  Israel should also invest in security of its energy supply to refute the notion of insecurity that prevents foreign energy companies from investing in the country’s gas fields. Equally important, risks that concern investors like export sustainability should be addressed by guaranteeing a certain amount of financial recovery though the existing compensation mechanism. A transparent and predictable Israeli regulatory environment for foreign investors and access to external sources of project finance and loan guarantees and production commitments in Israel are important for the development of export oriented gas resources.

Unquestionably, decisive steps have to be taken by Israel so that a new horizon is revealed; the horizon of indigenous energy development.

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