There’s a well-known joke in Israel: Isn’t it ironic that Moses walked through the Middle East for 40 years and found the only land without oil?
Fortunately for the Israelis, that joke has been overtaken by events. Since some of the largest natural gas fields in the world were discovered in the Eastern Mediterranean Basin, Israel has been sitting on a wealth of, well, wealth.
A consortium of U.S. and Israeli companies stand at the forefront of developing this resource, investing billions of dollars to bring the natural gas to market. This is an example of U.S.-Israel private collaboration at its finest, and we are just beginning to enjoy the dividends this partnership is creating.
Indeed, the estimated reserves are enough to supply Israel for the next 100 years, providing a degree of energy security that previous generations of Israeli leadership could only dream of.
But these reserves have tremendous regional implications as well. The companies developing the reserves have agreements to sell gas into the Jordanian and Palestinian markets, helping to link these economies to Israel through the creation of long-term, strategically-vital deals.
The opportunity to further regional economic integration and peaceful ties in a neighborhood that faces any number of challenges is almost too good to be true. U.S.-Israel cooperation on energy has the potential to have a dramatic impact on diplomatic relations in the Middle East for decades to come.
And yet, like all opportunities, commercial and political risks are present. While all companies face market fluctuations, geostrategic uncertainties in the Middle East add a unique twist to these deals. This is where American involvement, in the form of financing from the U.S. Export-Import Bank (Ex-Im), is essential.
Ex-Im fills gaps in trade financing that private banks are unable to meet because of political instability. The Bank’s support gives the private sector — and foreign governments — the confidence that this project has the full faith and backing of the U.S. government. In this case, Ex-Im financing can be the difference between a deal going forward and leaving the gas in the ground.
For the U.S.-Israel relationship, these gas deals represent a once-in-a-generation opportunity. This deal is good for the U.S., good for Israel, and good for her neighbors.
While Congress extended Ex-Im’s mandate through June 2015, we hope the next time Congress votes to re-authorize Ex-Im it is for a significantly longer timeframe. If not, American jobs, American investment, and American interests will all suffer.
And, in this instance, Israelis might unfortunately be forced to start telling that joke about Moses’ navigational shortcomings once again.