Israel depends almost totally on imported fuel for its energy requirements; domestic production of crude petroleum and natural gas is negligible. After the June 1967 War, Israel acquired a large portion of its oil supply from captured Egyptian fields in the Sinai Peninsula. In 1979 these fields were returned to Egypt. Exploration within Israel was continuing in the mid-1980s, with interest centered on the Dead Sea and northern Negev areas, as well as in the Helez region along the coastal plain near Ashqelon. Despite having spent about US$250 million between 1975 and 1985 searching for oil, Israel remained almost devoid of domestic energy sources. By 1986 domestic and foreign oil exploration in Israel ground to a near halt, although Occidental Petroleum (headed by Armand Hammer) continued its seismic studies in preparation for future drilling.
Because of the failure to find economically worthwhile deposits of fossil fuels, Israel has devoted large sums to developing other energy sources, particularly solar energy. In fact, Israel has long been an acknowledged leader in this field. Overall, the structure of Israel's energy economy has changed considerably since 1973. Between 1982 and 1984, about 50 percent of Israel's electricity came from coal. By 1985 oil-to-coal conversion programs made coal the source of 17 percent of Israel's primary energy. It appeared unlikely in 1988 that a major improvement in Israel's energy balance would occur.
The Arab oil embargo and the Iranian Islamic Revolution have forced Israel to diversify both its coal and oil imports. In 1986 Israel's major sources of coal were Australia, South Africa, and Britain. The bulk of Israel's oil came from Mexico and Egypt.
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