State of Israel

Ministry of Energy and Infrastructure

February 1995

SUMMARY OF THE ENERGY SESSION AT THE JERUSALEM BUSINESS CONFERENCE

COOPERATION IN THE MEDITERRANEAN AND THE MIDDLE EAST
THE CIRCLE OF OPPORTUNITY

INTRODUCTION

A VISION OF THE ENERGY FUTURE

MOSHE SHAHAL, FORMER MINISTER OF ENERGY AND INFRASTRUCTURE

I am indeed grateful to all for arranging this opportunity and decision makers, from many countries around the Mediterranean Basin, the Middle East and further afield. Before reverting to the realities of today, I must mention that it is of great interest to me as well as of great excitement to be able to present this feature to you. I also wish to point out that the Middle East and North Africa and its vast expanses always served as a safekeeping ground as well as a passageway for many cultures. It was during the time following Alexander the Great that Alexandria became a major city in which science, culture and commerce developed and blossomed. It was also following the collapse of the Roman Empire that science and knowledge found refuge in the Arab world in the present day regions of Syria and Iraq. From these locations it reached into the far corners of the Khalifat, spreading through North Africa to the south European regions of the Iberian Peninsula.

All during that period, and mainly due to the interaction with Arab poets and poetry, the Jewish-Hebrew culture flourished within the Muslim Societies, while nourishing each other to such an extent that many of the Jewish poets in Iberia expressed themselves in both languages. The Hebrew poetry reached then a climax, called until now the "golden era", never to be surpassed again.

The sciences, alchemy, and mainly astronomy and its derivate, nagivation, flourished also at that time, together with great philosophers and doctors to mention only a few; such as the doctor and philosopher Itzhak ben Shlomo Israeli who was born in Egypt and died in Tunisia in 930 AD, Abraham ibn Meir ibn Ezra born in Toledo in 1092 and travelled through North Africa and many of the Mediterranean countries, and of course Ben Maimon – Maimonides – who was born in Cordoba and lived in Morocco and in Egypt. Maimonides wrote his philosophic "Guide for the Perplexed" in Arabic.

It was at that time, that the Jewish people served as messengers of culture, translating voluminous scriptures from the Arabic into Latin and other languages and vice versa.

At present, we are facing a new era in which even stronger cultural synergetics may again take place. New circles must be defined and new avenues through which our societies can exchange and pr mote ideas, must be designed.

The first circle, in which we can all agree to participate, is the Mediterranean basin circle and Middle East. In this circle, we all share a common heritage of similar cultures, we all share the same sea-shores, the same sun, the unevenly distributed energy resources, and we all share the best of all: many very talented people. In the energy field we have to turn the last previously mentioned advantages into reality. The Middle East and the North African countries, together with the sub-Saharan regions bordering the North African regions, have one of the highest population growth rates in the world. The supply of those regions with the necessary goods, commodities and services in order to increase the standard of living of the individuals ought to be the main task of the governments of those countries, namely us. This can be made possible if we harness the three factors that will enhance development, namely, energy, capital and technology. With respect to the energy field we may not be complacent with the present situation. Some changes must be achieved on the technical front if we are really interested in complying with the dictates of the care for the environment and provide a health and sustainable energy economy. We as citizens of this unique area must therefore concentrate future efforts on a few topics such as:
* improving the operational efficiency of existing energy facilities and thus reducing emissions
* improving efficiency in use of transportation means
* adoption and development of new technologies that offer the prospect of higher productions efficiencies and better environmental performances
* development of renewable sources of energy and reduction of the capital costs of renewable sources of energy.

I have no doubt that within the new atmosphere that has been created, where all sides show understanding and good will and where it is clear to all sides that the Mediterranean Basin and the. Middle East contain great economic potential to accelerate the growth of all the markets in the region and in Europe, it is possible to harmonies without difficulties the energy policies of all Mediterranean and Middle Eastern nations, towards a new era of cooperation.

In this aspect, namely the development of cooperative projects, I will briefly recount some projects which are worth consideration from the techno-economical aspect, including those relating to energy infrastructures.

We plan connection of the Israeli electricity grid with the electricity grids of the States of Jordan and Egypt and in time with the rest of the Middle Eastern countries, including Syria and Lebanon. This connection of electricity grids will be a link in the great Mediterranean electricity ring, combining the South European countries. Turkey, the Mashreq and the Maghreb countries. The first link of this connection was already decided upon between Israel and Jordan in the Peace Treaty between the countries.

Connecting the grids will permit a dependable supply level, thus laying an infrastructure for the electricity market and increasing the competition in providing electricity. In this connection, I would like to point out that at present Israel supplies all the electricity to the Palestinian Autonomy. We offered and still are offering cooperation in this field to the Palestinian Electricity Authority.

The creation of a Mediterranean and Middle East electricity grid will benefit a population of some 300 million people who live in the Middle East and on the shores of the Mediterranean. Building such a bridge will necessitate a strong commitment and a willing spirit of cooperation between all the nations in the Middle East. A beginning was made to achieve this end. At present an agreement has been signed between Turkey, Egypt, Jordan and here again, the first steps have been taken to establish the physical connections.

In the macro view of the future, the tripartite connection between Egypt, Jordan and Israel and the possibility of future connections to Syria and Turkey will be a strong fulcrum on the eastern coast of the Mediterranean and will enable both reliability and viability for this grid. We hope that this project will materialise in its full extent and I pledge full Israeli support and cooperation towards this end.

A survey which was conducted by the Hammer Institute found that there are five pipelines for the conveyance of oil or gas which have potential economic advantages. Pipelines can be laid from Kuwait, the Persian Gulf and Saudi Arabia to the northern point of Eilat/Aqaba and from there to Ashkelon, connecting to pipelines to the Mediterranean ports. One export port recommended in the Mediterranean is a new port to be built in Gaza, either as a fuel port or in conjunction with a deep water port to be built there. I will present a brief outline of the findings of the researchers. There is economic feasibility in exporting Gulf oil to the Mediterranean ports through the Negev and Gaza or Ashkelon. The renovation of the Tapline and flow of the oil through Haifa are also feasible.

Development of an oil port on the shores of the Mediterranean (separately or together with a deep-water port) will enable export of 100 million tons per year of oil from the Gulf region to Europe. The investment required to undertake the construction of the projects related to exports of 100 million tons of oil range from 1.6 to 1.8 billion dollars saving around 250 million dollars a year. In addition to the survey’s recommendations as mentioned above, I suggest examining the possibility of building an additional refinery in the East Mediterranean region whose production will be marketed in the region or will be slated for export. In this connection, I must point out that setting up a refinery in Gaza and the possibilities of importing crude oil to the refineries in Haifa and Ashdod through oil pipelines, will allow the establishment of a corrective environment in the, refinery segment in the Middle East and the Mediterranean Basin with some of the production trademark, in the, region and the balance being exported.

In addition to the pipelines from the Persian Gulf and Saudi Arabia to Mediterranean shores, recommended in the study, Israel is considering laying gas pipelines from Egypt and/or the Gulf States. There have already been positive contacts and discussions concerning this possibility. If the plans are implemented and the c.i.f. costs of imported gas will be, attractive this can bring about a revolution in the supply of electricity in our part of the Middle East (namely Israel, the Palestinian Autonomy and Jordan).

It will be possible to convert present electricity power production systems, based on coal and fuel to gas. which will improve the environment, save emission, land, completion time and control devices and reinforce the use of ignore efficient units such as combined coal plants. This development will encourage the formation of an efficient and competitive structure, in electricity supply markets for the benefit of the neighboring countries in the Middle East and around the Mediterranean Basiri. Through the interconnected grid the electricity could be exported to Europe. As you know, Israel has accumulated extensive experience and know how in the solar energy field and even though fossil fuel prices have gone done in recent years, there is still an economic advantage in using solar energy, considering the tangible cost to the environment of using conventional fuels.

The vast resources of sunlight drove to develop technologies for use in our region. We are interested to continue this development with people around the Middle East and the Mediterranean. We have already discussed this possibility with other,Jordanian neighbors.

The technologies developed by the Weizmann Institute and the Luz and Ormat companies in Israel are oil the verge of commercialization or are completely commercialised. We recognise the importance of the Maghreb countries as a solar energy source for all Europe in the future and would like to participate in this venture as a full partner providing our best technologies to this superb effort.

More specifically we can point to the following solar energy projects:

* Following the success of the Luz designed power plants in the California desert, a power station of 85 megawatts based on Luz-developed technology is planned for installation at the Ein Avrona site north of Eilat. The plant will allow the delivery of clean electricity to areas close to the site (Jordan, Egypt and perhaps Saudi Arabia). The station may serve, among other purposes, for a training center for solar research as well as for solar power station operators.

The estimated cost of the commercial projects is 145 million dollars and the construction time is estimated at two and a half years. Similar units or even much larger ones, could be built in the North African and Middle Eastern countries having very good insolation conditions with the possibility of selling the excess electricity via the interconnected grids to Europe.

* Using to advantage the difference in altitude between the Mediterranean Sea or the Read Sea and the Dead Sea to produce electricity and desalinated water, a canal project is being studied.

In this field, there are several alternatives, distinguished from one another by a number of aspects: route, size of the seawater conveyance and auxiliary utilities. Some of the alternatives have already been studies in the past and some have recently been re-examined. Despite the need to examine anew some of the parameters the recent review points to techno-economic possibilites which in contrast to past studies place stress today on desalination of seawater and this will be the main function of the water conduit.

There can be no better timeframe to restart the activities regarding the proposed water conduit since it has been said that there will be no peace if the water problem is not solved. And so, we now have the chance to set up a joint project which according to estimates may solve the water problem within 20 to 30 years for Jordan, the Palestinians and Israel. Calculations on the capability of the water conduit point to the possibility of desalination up to 800 million cubic meters of water per year while the use today in Israel, Jordan and the Palestinian Authority is around 1.5 billion cubic meters of water per year. This additional water will add 50% to the water sources we have available today. This new source can easily be divided between the nations of the region. We have agreed air ad to conduct a feasibility study for the Red Sea Dead Sea canal, the Med-Dead canal and the, Northern alignment from Haifa to the, Jordan valley.

The scope of the investment in the inter-seas canal considering the dimensions of the projects, the technology necessary for the design of the water conduit and the desalination plants, the efficiency and the cost of financing during construction and land development, may range from 1.5 to 3 billion dollars. The price of the water is assessed to be betweens 50 60 US cents per cubic meter of potable water and much less for agricultural applications.

The lack of potable water in the Middle East and around the Mediterranean Basin is a well established fact. Efforts are to be exerted to provide for additional water resources in this area. This can only be done through the necessary connection between energy and water production. To this end we propose to undertake as a common project:

– A survey to identify locations around the Middle East and Mediterranean Basin suitable for the construction of desalination plants. Rising solar heat sources or other heating means.

– Identify available desalination technologies, solar, stand alone, coupled to an existing power plant or to a newly built one, for the supply of water in needy areas.

– Construct a commercial size solar pond with a low temperature multi effect distillation facility . It is proposed to construct the first one in the Arava valley. This plant will serve as a proof of technology pilot plant and as a good training ground for desalination technicians. The plant will also serve as a water source for Jordan and for Israel.

In addition to the projects in the energy field, a whole array of projects in the earth sciences can he performed ill cooperation. Regional cooperation is essential for the safety and benefit of all nations in the Middle East and around the Mediterranean which has a long history of destruction due to earthquakes. Only a few months ago. an earthquake in Algeria caused mass destruction and it as not so long ago that in Morocco much suffering was caused by an earthquake.

The U.S.G.S has taken a few preliminary steps to organize such cooperation for the Middle East but this must be broadened for all the Mediterranean countries to minimise casualties and damage by ensuring relevant building codes. This could be achieved by a thorough seismic study of the area and the construction of seismic nets. It is iii all our interests to protect our sea as environmentally friendly, considering that it has many applications – fishing. tourism, etc. the Mediterranean is environmentally very sensitive as it has only two outlets – Gibraltar and Suez. To manage, it properly. a thorough study and monitoring of its biological, chemical and physical parameters should be conducted as a regional cooperation project. Some efforts were made by Ciesem. the UN and Poem for the Eastern Mediterranean, but a regional approach will be far more beneficial.

The Mediterranean fish yield is poor and getting worse all the time. The population is growing, fresh water is scarce and food is needed. Israel, internationally recognised for its R&D in the field of mariculture, could contribute to solving this problem. Constructing breeding ponds and cages along the coast with such know-how will be to the benefit of all the peoples of the region. even the problem of pollution caused by such breeding has been solved in the integrated ponds where biological filters clean the water.

The Mediterranean, Arabian Sea, the Gulf and Red Sea coasts are a unique treasure and have many uses. Thus, the optimum planning based on a thorough study of the seas is vital. The interdependence of the coastlines area make such a study more important. This could well be a practical extension of the 1975 Mediterranean Pact which could also influence the seismic concepts.

Fresh water is one of the major problems of the area. Therefore the management of water reservoirs and ground-water resources is crucial. Mutual cross-fertilization of ideas is the best way to ensure proper use.

During the last two decades we gained much experience through the exploitation of the oil shales deposits in Israel. Oil shales is the most abundant fossil energy resource discovered to date in Israel. The estimated reserves are about 12 billion tons of oil shales.

Analysis showed that these oil shales contain about 12-20% of kerogon that can be processed as replacement for crude oil. The PAMA Energy Company. established about 10 years ago dealt with developing exploitation methods to use the oil shale resource in two ways:

1) the direct combustion in oil shale fired power plants;
2) oil extraction through retorting of the shales.

A pilot plant for the production of electricity and steam by direct combustion of oil shales was built b PAMA in the Negev south of the town of Arad. The plant started operation in 1989: it produces 5 megawatts of electricity and 50 tons of steam per hour. Electricity is fed to the grid and steam is utilized by the Rotem Company fertilizer plant located near the power plant.

After a few years of operation and an investment up to now of 50 million dollars at current values, the lessons learned from the operation of this power plant demonstrate that building a large oil shales fired power plant using Israeli low calorific value oil shales, is indeed feasible.

The Israel Electric Corporation (I.E.C.) is now considering building additional oil shales fired power plants, ill modules of 75 megawatts. A total of 1,000 megawatts of oil shales fired power plants is envisaged. Many foreign companies show interest in building these oil shales plants and are willing to build the plants in "build own-operate" mode or in any other mode agreeable to the I.E.C.

We know about the oil shales deposits in Jordan, in Egypt and in Morocco and we are ready to cooperate in the exploitation and uitilisation of those deposits based upon our own experience.

I hope some of the issues I raised for the purpose of reviewing them during discussions will indeed bear fruit in the not too distant future and turn into realistic projects. We in Israel are ready to participate and cooperate with all the countries in the Middle East and the Mediterranean basin without preconditions, for the improvement of the living conditions in our region.

I am certain that most concerned people are convinced that the possibilities for economic development of the Middle East and the Mediterranean Basin and the near-by regions, are almost unlimited. Today, our utilization of this option is minimal. I am sure that the dynamics created by the peace process to which we have committed ourselves, will bring about the

removal of the last obstacles for the development of the region. bringing new winds of trade and cooperation to the whole area.

The inevitable linkage between the Arab and the Jewish societies that proved to be so viable and fruitful in the past can once again open new vistas for future cooperation. Let us all work towards a real renaissance in our unique region for the benefit of our future generations.

All the human and energy resources and the opportunities referred to are simply awaiting the first spark to set them off in the right direction to create a new and peaceful order for our region, which will have a major effect on lightning and stabilizing not only the Mediterranean and Middle East but the whole world.