Joseph Dana writes: During President Barack Obama’s final hour in Israel on March 22, he was able to broker an unlikely apology from Israeli Prime Minister Benjamin Netanyahu to his counterpart in Turkey, Recep Tayyip Erdogan.
Over the past several years, diplomatic relations soured between the two traditional allies over Israel’s stubborn refusal to apologise for the deaths of eight Turkish activists and one Turkish-American aboard an aid convoy en route to the Gaza strip in 2010.
Analysts quickly pegged the apology to instability in Syria and even the Iranian nuclear crisis. But there is another possibility that could be fuelling this rapprochement: a potential stake in the lucrative export of Israeli natural gas.
After years of fruitless exploration in the eastern Mediterranean, in 2009 Israel discovered some of the largest offshore reserves of natural gas in the last decade. The exact size of the gasfields are unknown but they are rumoured to contain upwards of 150 years’ worth of production.
According to Eytan Sheshinski, an economist at the Hebrew University and the head of an Israeli parliamentary fact-finding commission on the gas, Israel will have a sovereign wealth fund worth roughly $80 billion (Dh293.6 billion) by the year 2030. That amount corresponds only to the revenue from a super-profits tax levied on the sought-after resource.
Israel’s Central Bank forecasts the natural gas will account for nearly a third of Israel’s economic growth this year. That could soften the impact of Israel’s growing international isolation.
Natural gas from one deepwater field started flowing on Saturday for internal consumption, prompting Israeli Energy Minister Sivan Shalom to declare Israel’s economic independence for the first time in history.
Which begs the question: with Israel’s growing sovereign wealth fund, how will the Israel lobby in Washington have the gall to keep on insisting that U.S. taxpayers have an obligation to pay for 20% of Israel’s defense budget?