Genie Energy refused permission to drill in Israel’s Shfela region

A flag of Israel in the wind
Source: DollarPhotoClub

Genie Energy Ltd. an independent retail energy provider and a developer of unconventional energy projects, announced yesterday that on September 2, 2014, the Jerusalem District Committee for Planning and Building voted to decline to issue Israel Energy Initiatives, Ltd. (“IEI”) a permit to build and operate an oil shale pilot drilling project in Israel’s Shfela region.

The Shfela or, Shfelat Yehuda, “Judean foothills”, is a lowland in south-central Israel stretching over 10–15 km between Mount Hebron and the coastal plain.

IEI, a majority owned subsidiary of Genie Energy, Ltd., holds an exclusive Shale Oil Exploration and Production License awarded in 2008 by the Israeli Ministry of National Infrastructures. In July 2011, IEI received a one-year extension on its three year exclusive license to explore oil shale resources on 238 square kilometres (92 sq mi) in the region.

Oil shale in Israel is a widespread but undeveloped resource, largely because of economic and technological constraints. Israeli oil shales belong to the group of Upper Cretaceous marinites. Although oil-shale deposits may lie under as much as 15% of the country, only a small part of these are mineable.

So far Israel has been importing much of its oil from Russia and ex-Soviet republics, and its gas from Egypt. As of recent, this latter supply has become unreliable due to a string of attacks on gas pipelines running through the Sinai desert.

However, although Israel finds itself in a similar situation to Jordan – also historically dependent on Egyptian gas – it is far less proactive when it comes to exploring its unconventional deposits – as the recent decision illustrates.

Oil-shale development in Israel has caused protests among environmental organisations. Since the announcement in 2011 by IEI to develop shale-oil extraction in Israel, these projects have been opposed by inhabitants of Adullam who formed Citizens’ Committee to Save Adullam, and different environmental organizations and protest groups such as Greenpeace, Israel Union for Environmental Defense, Life and Environment, Society for the Protection of Nature in Israel, and the U.S.-based Green Zionist Alliance. The extent of the environmental protest partly accounts for the negative decision with regard to the Shfela exploration.

Genie Energy said in a statement released yesterday that it is disappointed by the Committee’s decision and is currently evaluating options to determine the best course of action to move forward to exploit the valuable resource covered by IEI’s exploration license.

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