Israel Discovers Huge Natural Gas Reserves Off Its Coast

This would be a liberating moment for the Israelis, who have been long dependent on external energy suppliers and whose security has depended on a steady supply of energy imports. An Israeli venture, in conjunction with its US partner, Noble Energy, has found a natural gas deposit that is equal to 1/2 the US total reserve.

On Wednesday, the frenzy got fresh fuel: Noble confirmed its earlier estimates that the field contains 16 trillion cubic feet of gas—making it the world's biggest deepwater gas find in a decade, with enough reserves to supply Israel's gas needs for 100 years.

It's still early days, and getting all that gas out of the seabed may be more difficult than it seems today. But Noble and its partners think the field could hold enough gas to transform Israel, a country precariously dependent on others for energy, into a net-energy exporter.

Such a transformation could potentially alter the geopolitical balance of the Mideast, giving Israel a new economic advantage over its enemies.

Even before Wednesday's announcement confirming the size of Leviathan, the big field was causing a ruckus in Israel and the region.

Leviathan, named after the Biblical sea monster, and two smaller gas fields nearby have kicked up a broad speculative craze.

Excepting the issues with actually exploiting the natural gas find, this raises some new potential avenues for progress on the Israeli-Palestinian conflict and the Arab Israeli conflict at large.

Money has long been a major lubricant in getting peace deals done and some form of joint venture could potentially bring Palestinians significant economic gains and benefits from new industry and economic opportunities. The US kicked in $2 billion a year to Egypt since the Camp David Accords were signed bringing peace between Israel and Egypt. Israel also got access to oil finds in the Sinai, but the new Leviathan find would dwarf all those other Israeli energy sources.

Don't think for a moment that the Palestinians wont try to claim this for themselves either. Expect Hizbullah and Hamas to claim that the Israelis are stealing Palestinians' birthright of natural resources. Indeed, Hizbullah claims that 3/4 of the Leviathan field is Lebanese. With Hizbullah in a commanding position both on the ground and through its Iranian backers, expect more trouble on the horizon.

Lebanon is looking to expand its offshore energy exploration, knowing that other potential finds are possible.

Israel is now contemplating raising energy taxes to exploit the lucrative find, but US companies, including Noble Energy are lobbying against them. Expect to find a negotiated increase that isn't nearly as high as Israel wants, but which would bring in a tremendous new source of revenue for the Israeli government.