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BUSINESS

An Alternative to Oil
Israel is tapping oil shale
reserves as a potential
source of alternative
energy – at what cost to
the environment?

Ziv Hellman

I
T IS EARLY EVENING, AND
Joshua Fox, back home from his job as
a project leader at IBM, is spending
time with his children in front of his
house in Aderet, a rural community in
the Elah Valley bordering the lush Adullam
National Park, which in recent years has
become home to dozens of English-speaking
professionals drawn by its quiet, relaxed qual-
ity of life.
Or rather, as Fox notes, it used to be quiet.
“Can you hear that?” he asks, referring to the
constant rat-ta-tat emanating from a 15-meter-
high drill operating near the perimeter of
Aderet, biting into the ground in search of oil
shale samples. “Can you smell the fumes?”
The residents of Aderet say they awoke one
day in late December to discover that they
were living next to what may potentially be a
major oil extraction site, in the heart of the
country, some 25 kilometers (15 miles) south-
west of Jerusalem. At a time of increasing
global awareness that traditional oil reserves
will not be around forever, and an intense
search for alternative energy sources, it turns something like that do, ask local residents, to many statutory bodies as we can to the poten-
out that Israel is one of a relatively small num- our environment? tial damage this can cause, and may challenge
ber of countries with significant reserves of oil the law under which the drilling license was

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shale – a potential source of liquid fuel. “This HE RESIDENTS OF ADERET issued.”
has major significance,” says Dr Yuval Bartov, have banded together in an attempt to But the overall mood of the Save Adullam
CEO of Israel Energy Initiatives (IEI), which prevent the oil shale extraction from group, as of now, is palpable concern that they
is conducting exploratory drilling near Aderet. proceeding in and around Adullam park, pool- are up against much larger forces than they can
“Israel could attain energy independence, with ing together skills and expertise they have as muster. They have read up on the effects of
all that implies. This is not speculation – the middle-class professionals. Demonstrations extracting oil from shale on the environment in
reserves exist.” have been held. Fox has created a “Save other places around the world, such as
But while there is no controversy over the Adullam” website. Lawyers are preparing Colorado and Scandinavia – and that has only
existence of oil shale reserves, the methods legal challenges. Ecologists, biologists and intensified their concerns.
used to extract oil from oil shale – using other experts in the sciences have pitched in. At the same time, although their website
immense heating devices to raise the tempera- “We are looking into all the legal aspects depicts them as David up against Goliath, they
ture of the oil shale, hundreds of meters involved,” says Naftali Smulowitz, a Toronto- are also at times frustrated that they cannot
(yards) underground, to as high as 650°F for born lawyer who has lived in Aderet for the present a clear, Hollywood-style narrative of
years – can be a cause of concern. What will past 12 years. “We are now trying to alert as citizen-activists fighting a big, bad company,

30 THE JERUSALEM REPORT MARCH 1, 2010


COURTESY JOSHUA FOX
immense amounts of water and tremendous year, of sufficient quantity to prompt the Israel
heat essentially to ‘fry’ the oil out. That can Electric Corporation to consider converting its
cause gases to drip into the surrounding soil power-generating stations from running on
and aquifer. We are told that whatever damage imported coal to locally produced natural gas.
may be caused will be cleaned up. But who While explorations continue for more natur-
can really give us a guarantee of that?” al gas fields, and the hope of an Israeli compa-
ny striking oil never fails to intrigue investors

A
N INTENSIVE SEARCH FOR OIL in the Tel Aviv Stock Exchange, it has become
shale, and for new methods of extract- increasingly clear in recent years that Israel is
ing oil from it, is being conducted on a one of the relatively few countries in the world
global scale nowadays. The background to it is – there are estimated to be about 30 such – sit-
a growing sense that the era of easy, “cheap” oil ting on significant reserves of oil shale.
– meaning oil that can be easily pumped out of Oil shale is sedimentary rock that contains
near-surface, high-pressured oil wells – may be kerogen, a compound that can be processed to
drawing to a close. Known, large near-surface yield hydrocarbon in liquid form, which can
fields have been pumped regularly for decades, then be used similarly to petroleum oil. The
and are aging. Drawing oil from depleting potential for extracting useful oil from oil shale
wells requires advanced methods that are typi- has been known for a long time, and there are
cally expensive to implement. Most new oil estimates that the total amount of oil shale
discoveries in recent years have been in hard to resources in the world may exceed proven
get places, often miles under water, or deep in crude oil reserves. The problem is that the cost
the arctic regions, again implying large extrac- of extracting oil from oil shale is sufficiently
tion costs. high to have made it uneconomical compared
At the Davos World Economic Summit in to pumping oil wells. With the costs of con-
late January, Thierry Desmarest, chairman of ventional oil extraction expected to rise, how-
French oil giant Total, predicted that it would ever, efforts to find economical methods of
be very difficult to raise crude oil production using oil shale have intensified.
worldwide above 95 million barrels a day, Virtually every process for converting kero-
which is 10 percent more than today’s level. gen into oil involves heating oil shale to very
Desmarest told AFP that the problem is not one high temperatures, in order to decompose it
of insufficient reserves, but that “a lot of it is chemically, in a method called retorting. This is
difficult to produce,” and foresaw a possible accomplished either by shipping shale to pro-
world oil production peak in about 10 years. cessing sites, after conducting full-scale min-
These sorts of predictions, coupled with the ing, or by on-site processing, involving heating
extreme volatility in oil prices over the past the oil shale while it is still underground to
ENVIRONMENTAL ACTIVIST:
couple of years, have spurred many to seek yield a vapor, which can potentially access
Joshua Fox and his children with, in
the background, the 15-meter-high
alternatives to the crude petroleum that has material at greater depths than standard mining.
shale drill near their home in Aderet powered industrial civilization for more than a

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century. Some of the efforts are focused on ARTOV KEEPS A HANDFUL OF
renewable “green” alternatives, such as wind oil shale samples in his Jerusalem
and solar energy. But those technologies are office to show visitors what they look
eager to rip out the trees and tear up the earth. still years away from being ready to scale to like. “Here, smell this,” he says encouragingly,
Energy companies have long learnt to adopt meet global needs. That has meant that other as the unmistakeable whiff of oil rises from a
and even embrace the mottoes of environmen- hydrocarbon-based alternatives to petroleum, sample in a jar. “The presence of fuel is not as
tal protection, and IEI is no exception. such as natural gas and oil shale, have caught evident in every sample, but the extraction
“Environmental responsibility is one of the the attention of energy industry leaders. If and potential is there.”
founding principles of our company,” says when a shift away from petroleum occurs, the Resembling a professorial Bill Gates,
Bartov. “We have a commitment to minimal implications, in economic and geo-political Bartov gives more of an impression of an
disturbance of the environment when conduct- terms, will be profound, and along the way earnest and concerned scientist than a high-
ing our work, and to restoring the sites to the there will be fortunes to be won or lost. powered chief executive. He earned his doc-
exact condition they were in before we started, These developments are being monitored in torate in geology in Israel, and then moved to
when we are done. We understand this is a Israel, which has for decades disappointed Colorado, where he worked in shale oil extrac-
small country. If what we do is not sustainable those who hoped there may be petroleum oil tion, and joined the faculty of the Colorado
environmentally, it will not be sustainable at fields in the Holy Land, to counterbalance the School of Mining as a professor. He returned
all.” immense oil wealth amassed by Arab coun- to Israel when he was recruited to head IEI,
“We know they are not evil people,” says tries. No major oil has yet been struck in Israel, given his extensive experience in Colorado.
Fox, referring to IEI. “They are doing their but large natural gas reserves were discovered IEI is a subsidiary of IDT Corporation, a
jobs. But extracting oil from shale involves 80 kms (50 miles) off the coast of Haifa last multinational holding company specializing in

THE JERUSALEM REPORT MARCH 1, 2010 31


BUSINESS

the telecommunications and energy industries. gen,” he notes. “That’s impressive.” my work there,” says Bartov, in defense of the
It has long had a presence in Israel as a company’s decision. “In Colorado, the aquifer

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telecommunications company, but in the last OSHUA FOX, WHOSE CHILDHOOD flows through the same layer as the oil shale,
couple of years decided to expand its energy was divided between Jerusalem and while in Israel, it flows far below. That means
arm in the country in order to explore shale oil Madison, Wisconsin, holds a PhD from that the water is completely separate from the
possibilities. Its overall energy company is Harvard University in Semitic Philology, oil shale. There is no need for a freeze wall
called Genie, comprised of IDT Energy, which he studied before switching to software here. The water authorities here are actually
American Shale Oil, and IEI. IDT Energy engineering as a career. He moved to Aderet very cautious, and we are fully cooperating
reported $227.7 million in revenues during the with his wife Louise, originally from with them to ensure that no water could possi-
first three quarters of 2009. American Shale Sunderland, U.K., over 12 years ago. The cou- bly be contaminated by our work. In Colorado,
Oil is a joint venture with Total, whose main ple sought a quiet place outside the city in for every barrel of oil extracted, three barrels of
aim is researching and developing on-site which to raise a family, and their timing was water are needed. That is not the case in Israel
extraction technologies. Genie owns approxi- just right: Aderet, which had for many years – our water needs will cost about 500 shekels a
mately 89 percent of IEI. One of the more been a struggling agricultural community, month, about the water usage of one or two
prominent private investors in IEI is Harold obtained rezoning rights to construct residential large households.”
Vinegar, formerly a senior scientist at oil giant housing, intended to attract young urban pro-

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Shell. fessionals, on formerly agricultural land. The OX ALSO NOTES THAT NO ONE
IEI was issued a license by the Fox family happily traded their cramped knows what the great heat of on-site
Infrastructure Ministry in July 2008, under the Jerusalem apartment for a house in the extraction will do to what is under-
1952 Petroleum Law, granting it the right to country. ground, which in this case includes archaeo-
search for oil shale reservoirs within an area They now find the prospect of oil extraction logical artifacts that have never been dug up –
comprising 238 square kilometres (some being conducted near their home disturbing, to this area was at the heart of Judea in the
59,000 acres). “That is a large area,” says say the least, and are also perturbed that no Hasmonean, Roman and Byzantine periods.
Bartov, “but it is an exploration licence alone attempt was made to explain to or involve the Adullam is mentioned several times in the
– all it means is that if we have a successful residents in what so clearly affects their quality Bible, most prominently as the location of the
pilot locating a promising reservoir, we will of life. “A month prior to the appearance of the Cave of Adullam, where David, having been
then receive a commercial licence to work on drill, we saw a wheat field paved over for what expelled from the court of King Saul, found
about a square kilometre only, at that site.” looked like a parking area,” says Fox. “But no refuge and gathered “everyone that was in dis-
IEI’s current activities are limited to one explained why.” tress, and every one that was in debt, and every
removing samples from underground, which “The local council obviously knew, because one that was discontented.” The Elah Valley is
are collected for laboratory analysis. It can it had signed agreements with IEI,” adds where David fought Goliath.
operate only two sampling sites at a time, for Smulowitz, “but they did not tell us.” In reply, Bartov points out that IEI’s on-site
stretches of about two to three months; the cur- On the Save Adullam website, Fox has writ- process will take place 300 meters below
rently active sites are in Beit Guvrin, and the ten that “the extraction technique will involve ground – which means that it won’t be felt
Adullam site that has sparked the Aderet giant on-site production facilities heating a above ground, or near the surface.
protests. Bartov asserts that every site will be thousand-foot-thick section of underground “Archaeological artifacts are not located
reclaimed and restored to what it looked like shale to 650°F. Heating elements will snake below 10 to 20 meters underground,” he says.
before work started there. “You won’t even underground to bake the ground for four years. “We will be heating the earth 300 meters
know we had a site there,” he says. This is a Hundreds of wells will be needed to channel below. It would take a million years for the heat
requirement of the Infrastructure Ministry – if the oil leaking through the shale into the pro- down there to affect anything close to the sur-
we do not do it, our licence will be revoked.” duction facility. The extraction will consume face, including archaeological objects. They
The multi-year plan formulated by IEI calls huge amounts of scarce water. This will cause will be perfectly safe. In fact, consider the
for six exploratory drillings to be conducted in destruction of the landscape, the antiquities, the freeze walls used in Colorado. They are locat-
2010. A commercial pilot that may produce wildlife, the air and the groundwater.” ed very close to where the main heating is tak-
500 barrels of oil is scheduled for 2011 and Anxiety about possible water contamina- ing place – which shows you how insulated the
2012. If all goes well, the company will ramp tion is prominent in the concerns raised by heat is when on-site extraction is
up to production levels between 2012 and Aderet residents. This was heightened by implemented.”
2015, extracting up to 2,000 barrels a day, with reports they read about major efforts undertak- Adullam Park is nowadays a magnet for
full-scale production beginning in 2015. The en in Colorado to avoid water contamination tourists, both local and foreign, who flock to
only extraction procedure the company will during on-site shale oil extraction, which one of the main large, green, open areas left in
use is on site, using thermal conduction, since included creating an underground barrier called central Israel for hiking, cycling and wildlife
its license does not permit mining activities. a “freeze wall” around the perimeter of the spotting, and it is likely that extensive oil
Bartov clearly believes in the potential extraction zone, using refrigerated fluid to pre- extraction may severely curtail these activities.
of the on-site heating method, evincing a vent groundwater from mixing with the extrac- “A scenic park near the middle of a crowded
geologist’s excitement when speaking tion zone. IEI, however, has no plans to imple- country is an insane place to dig for oil,” con-
about the way in which heat brings about ment a similar technology. tinues Fox, writing on the Save Adullam site.
the “maturation” of kerogen. “It yields jet “The geology in Israel is very different from “The American parent corporation is testing
fuel, naphtha, diesel, natural gas and hydro- that in Colorado, with which I am familiar from this as-yet-untried extraction technique on ‘for-

32 THE JERUSALEM REPORT MARCH 1, 2010


eigners’ (that’s us Israelis), allowing it to avoid
the interference of American environmental
regulations while evaluating its economic
effectiveness.”
Concerned Aderet residents raise several
other concerns. They have heard assurances ‘Israel could attain energy
that any damage caused to the park will be
cleaned up, and that the park will be restored to independence, with all
its original condition, but they remain sceptical, that that implies. This is
asking who will stand behind those guarantees
if what is intended as a financial investment not speculation – the
goes sour and there is no money left to pay for
extensive clean-up. reserves exist.’
Who, they ask, will provide compensation
for local bed-and-breakfast inns, and boutique
vineyards, whose businesses may be ruined? – Dr Yuval Bartov
Will the infrastructural changes and new roads
that an oil extraction project will necessitate CEO of Israel Energy Initiatives

SHIMI NACHTAILER
irrevocably change the character of the area?
Will it be inundated with trucks rumbling day
and night? Will the immense electricity
required for the heating elements mean that
large cables will snake through the park?
Bartov has a patient reply to each objection.
IEI is backed, he points out, by IDT, a major the heating elements will emit polluted air.” ters, and the direction of Israel’s energy poli-
international conglomerate, which should easi- One possible avenue being considered for cies.
ly be able to pay cleanup costs, even if IEI itself blocking further shale oil extraction efforts is to “This should not be just a local issue, for
goes out of business. Liquids extracted from challenge the licensing granted to companies those of us living in this valley,” says Rachel
on-site retorting still require some amount of such as IEI under the Petroleum Law, which Jacobson, who moved to Israel from California
refinement, he admits, chiefly for removing was passed in 1952 and amended in 1965. The and now lives in Aderet. “This needs to be
sulphurs in the liquid, but at full-scale produc- law is intended to encourage the exploration debated at the national level. Is this what we
tion the company plans to transport oil to refin- and production of petroleum, with the under- want, for our green areas to be mined? What
ing facilities via underground pipes, not trucks. standing that all petroleum resources belong to about alternative [renewable] sources of
Although electricity from the electricity the state. Any attempt to extract petroleum energy?”
grid may be needed initially for heating – requires state licensing. The licenses cover pre- “Shale oil cannot, of course, be categorized
another option is using down-hole gas heaters liminary investigations, the drilling of test as a renewable energy source,” says Bartov.
– “eventually we will switch to underground wells, and production leases, issued for 30 to “Clearly, it would be better for the world to
fluid heat transport, which will mean that we 50 years, granting leases exclusive rights in a move to renewable energy sources. But the
will be self-sustainable for our energy needs – particular area, and royalties from extracted question is whether that is practical [in the near
using some of the energy we extract in order to petroleum. term]. Oil extracted from shale has 20 percent
extract more energy.” “The law gives companies that have a lower CO2 emissions than crude oil. That
licence, issued by the Infrastructure Ministry, a means that if we move to this source of energy,

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HMUEL BENTOV, A BIOLOGIST wide range of exemptions from regulations,” we will immediately lower our carbon foot-
and resident of Aderet, regards many says Fox. “It essentially gives them rights to print by 20 percent.”
of these answers as unsatisfactory. any land that is not a private plot.” Fox is convinced that the nation’s focus can
“Restoring land back to its original condi- According to Smulowitz, there are grounds and should be turned towards future sources of
tion [after shale extraction] is not simple,” to claim that the Petroleum Law does not apply energy, instead of seeking hydrocarbons under-
he says. “In Sweden, unacceptably high lev- to on-site oil shale extraction, which was not a ground.
els of cadmium were found in the ground 20 technology under consideration over 45 years “I never thought I would be an environ-
years after extraction ended. Restoring nat- ago. “We are looking into this very seriously,” mental activist – but here I am,” he says. “I
ural woodland, after trees have been he says. always thought that the policies advocated by
removed, is impossible; the best they can do many environmentalists would actually do

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is plant new trees. There is also much evi- EYOND THE DETAILS, THE more harm. But we don’t live in a static world.
dence, backed by scientific studies, that debate over the Adullam oil exploration Things are changing. Israel has built itself not
water can penetrate from the oil shale to the raises broader questions, regarding how on natural resources, but on brain power. That
aquifer. Any refinement conducted on site much say the residents of rural settlements is where we should be putting our efforts – in
will involve dangerous chemicals near resi- should have over what happens in the vicinity designing the future of energy, solar and wind
dential areas, and power stations for running of their homes outside the settlement perime- power, not oil.”

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