Keeping the Flame Alive

This Hanukkah, Israel doesn't have to worry about running out of oil.

Recent developments have ruined one of Golda Meir's favorite jokes. The former Israeli prime minister was known to quip: "Know why Jews don't like Moses? For 40 years he leads them through the desert, and then he brings them to the only place in the Middle East without oil!"

It took a bit longer than 40 years, but it turns out Moses wasn't so meshugge after all: Israel now boasts Saudi-sized reserves of oil and gas less than 100 miles off its coast. Only a few days ago, Woodside Petroleum, Australia's largest oil and gas company, announced an investment of $1.3 billion in Israel's largest offshore gas field -- appropriately named Leviathan.

And the biblical references don't stop there. The news of what may well become Israel's largest single foreign investment ever came just in time for Hanukkah, the Jewish holiday that this year runs from Dec. 8 to 16 and which celebrates the miraculous longevity of a single vessel of sacred oil for the golden menorah that stood in Jerusalem's Holy Temple.

If successful, Woodside's exploitation of Leviathan has the potential to transform Israel from an energy dwarf into a hydrocarbon giant, and maybe even a major exporter. Will Israel's energy bonanza turn out to be a latter-day Hanukkah -- "dedication" or "blessing" -- for the beleaguered Jewish state, or will Palestine and Lebanon, which both have overlapping claims, only bring more conflict to a region in which everything from water to air is contested.

But for Israelis -- even the secular sort -- divine providence seems a plausible explanation for this amazing luck. Only a few years ago, Israel had to rely on Mari B, a single well in the Yam Tethys field near the city of Ashkelon, to cover 70 percent its natural gas needs. That source was projected to dry up, well, just about now.

Egypt provided the difference in the country's natural gas requirements, under a Hosni Mubarak-era deal that the current government in Cairo, dominated by the Muslim Brotherhood, seems less inclined to continue. Since the start of the Egyptian revolution, militants in the Sinai Peninsula have blown up the pipeline carrying Egyptian gas into Israel (and Jordan) just over 15 times. But Israel's dependency on outside hydrocarbons might soon be over, thanks to an amazing string of discoveries in its exclusive economic zone (EEZ), which stretches for 200 miles off its shores. In January 2009, an Israeli-American consortium made the world's largest natural gas discovery for that year in the Tamar field, 50 miles west of the city of Haifa: a total extractible reserve of 8 trillion to 9 trillion cubic feet, roughly equivalent to two years' worth of the total U.S. residential demand for natural gas. A few months later, Dalit field, off the coast of Hadera, halfway between Haifa and Tel Aviv, was found to contain another 500 billion cubic feet of natural gas.

But Israel really struck it rich in October 2010, when that same consortium discovered more than 16 trillion cubic feet of natural gas in Leviathan: the world's biggest natural gas find in a decade. By itself, Leviathan could provide Israel with all the natural gas it would need for the next 100 years.

On top of all that, shale oil reserves under Israel itself could total 250 billion barrels, according to a 2011 report from the London-based World Energy Council, ranking it third in the world behind China and the United States. Combined, Israel's oil and gas reserves would be about equal to Saudi Arabia's total energy reserves. Although the first drop of these presumed shale oil reserves has yet to be extracted, Canadian and Russian oil companies are falling over each other to offer their help in doing so.

As reversals of fortune go, this is miraculous enough to rival the original Hanukkah story.

That miracle occurred after the revolt of the Jewish rebel army the Maccabees in the second century BCE. An assertion of orthodox Judaism against the Hellenizing influence of the region's Greek-Macedonian overlords, the revolt culminated in the liberation of Jerusalem. The Maccabees proceeded to cleanse the Temple of pagan desecrations, but found only one jug of holy oil still sealed, and thus uncorrupted, to light the Temple's golden menorah. The oil was only supposed to last for one day. But miraculously, the lights shined for eight days -- just enough time to procure a new supply of properly consecrated holy oil.

Hanukkah, therefore, is about more than miracle oil, and the bigger story of resistance and liberation still resonates with today's Jews -- albeit at different frequencies. As it gets only a brief mention in the Talmud, Hanukkah would have been a minor holiday on the Jewish calendar had it not been promoted by Jewish activists in 19th-century America, eager to instill a sense of pride and unity in the haggard and heterogeneous masses of Jews then migrating from Europe to the United States. For them, Hanukkah could be read as a stance against assimilation into the Hellenism of the day. For today's ultra-Orthodox, it might be a reminder of the overarching primacy of religion. To those given to a more secular take on sacred history, it's a warning that freedom isn't free.

As Israel tries to fit the likely consequences of its newfound supply of miracle oil into the national psyche, it had better consider that there are other parables besides the biblical similes. Here's another one: the Eastern Mediterranean as the new Persian Gulf -- highly flammable, in more than one sense.

All that mineral wealth prompted the U.S. Geological Survey to take a closer look, for the first time ever, at the oil and gas reserves hidden beneath the Eastern Mediterranean, in an area that includes not just Israel's EEZ, but also those of Egypt, Lebanon, Syria, Turkey, Cyprus, and Greece. The staggering conclusion: In a region previously considered devoid of exploitable energy resources, the total estimate equals a staggering 345 trillion cubic feet of gas and 3.4 billion barrels of oil. (That's enough oil to last Israel, at 2011 consumption levels, 35 years. Or roughly 1,597 Hanukkahs.) But as the region's hydrocarbon wealth has become apparent, Israel and its neighbor, Lebanon, have begun sparring over the maritime border between them, with billions of dollars of resource wealth at stake. Israel is not a signatory to the 1982 U.N. Convention on the Law of the Sea, which provides an international framework for the demarcation of economic exclusion zones, opening up its interpretation of its EEZ to disputes. It doesn't help that Lebanon and Israel, which would need to agree on the line, are still technically at war with each other. In 2010 and 2011, respectively, Lebanon and Israel deposed their rival claims with the United Nations. Complicating matters further are additional claims by the militant group Hezbollah, which says the entire Tamar gas field is in Lebanese waters.

Another element of tension comes from the southern edge of Israel's EEZ. The Gaza Strip's 25 miles of Mediterranean coast -- which potentially contains enough gas reserves to satisfy Palestinian demand for 15 years at current consumption levels -- might become Hamas's newest front in its war with Israel. Will coming years see dinghies piloted by suicide bombers slip out of Gaza at night, aiming for Israel's forest of oil and gas rigs? Will the Third Intifada be fought on water?

Israel's precarious geopolitical situation is on the minds of all hydrocarbon companies coming to do business in the Levantine basin. But in a world that has run out of easy reserves, the prospect of terrorist attacks is just one more expensive risk to consider.

Perhaps there is a way of reducing that risk -- and generate a rising tide that lifts all boats, so to speak. Palestine discovered its offshore reserves over a decade ago, but they remain undeveloped as one of the many economy-stunting effects of the Israeli-Palestinian conflict. Would it not be a great investment in the security of their other rigs if Woodside (or whoever will eventually drill the Israeli gas bonanza) invested in Palestinian oil and gas exploitation too?

Joint Israeli-Palestinian hydrocarbon extraction -- now that would be a miracle even bigger than Hanukkah itself.


National Security

Intel Inside

Has the IAEA's information become politicized?

The headline of an alarming report published by the Associated Press two weeks ago said that an Iranian document with some nuclear weapon yield calculations written on it "suggests that Iran is working on a bomb." That, however, was not why the document was significant: there's already plenty of evidence supporting the allegation that Iran has done nuclear weapons-related work since the late 1980s. Some of it suggests this work has continued until recently. The piece of paper aired by the AP will not and cannot provide additional support for that claim because we don't know enough about it.

The true significance of this document is that it landed in our e-mailboxes in the midst of renewed internal debate about how the International Atomic Energy Agency (IAEA) should determine whether member states are in compliance with their nonproliferation obligations. Beginning two decades ago, the IAEA started relying less on information it gathers during its own field inspections alone and more on information that others provide, most of which is open-source, but some of which is not. This third-party data has become central to the IAEA's work, and it is about to become even more so. The leak of the graph to the AP underscores that if this data isn't rigorously vetted and handled carefully, the IAEA's technical and political credibility will be seriously compromised.    

The IAEA's increased reliance on third-party information is one very important consequence of a slow-motion revolution that has been underway at the Vienna agency since the end of the 1991 Persian Gulf War. Following the revelation that Iraq had hidden from IAEA inspectors a massive nuclear weapons program -- and as the IAEA learned that other countries (Egypt, North and South Korea, Iran, and Syria) had concealed some of their nuclear work -- the agency has become increasingly focused on finding clandestine activities, and less on doing routine inspections of activities that states have already declared.

But data-processing scientists and engineers aren't by nature good communicators. Especially during the last decade of this sea change in the IAEA's thinking, many member states were out of the loop. As its technical experts tinkered with the architecture of the safeguards system, the IAEA minted a succession of new labels meant to capture the essence of what it was trying to accomplish. The IAEA coined the term "information-driven safeguards" to emphasize that it would in the future be using lots of data sources to search for clues that countries might be doing things they weren't reporting. Thereafter came another moniker -- "integrated safeguards" -- to neatly circumscribe the IAEA's plan to increase effectiveness while reducing the routine workload where appropriate. During the last decade, two more labels -- the "State-Level Concept" and the "State-Level Approach" (only cognoscenti understood the difference) -- were used to describe how the IAEA plans to tailor safeguards to the peculiarities of each country.

Especially because the IAEA informed members that under State-Level safeguards each country would be subject to a unique but also non-negotiable regimen, it was only a matter of time before at least a few countries asked the IAEA to explain how all these developments fit together to make one comprehensive verification system.

That time is now. In September, member states collectively asked Director General Yukiya Amano to explain them to the IAEA's Board of Governors, the agency's most important policymaking organ, sometime in 2013. In the background looms Iran, the most high-profile case where the IAEA is using lots of third-party information to develop a complete picture of a country's nuclear program.

There is "basic support" for changes the IAEA wants to make in the safeguards system, Amano told the Council on Foreign Relations on December 6. But member states -- endowed with sovereign rights expressed in their safeguards agreements -- are questioning "how far we should go" in extending the scope of State-Level safeguards, he said.

Take Russia, for instance. When one year ago Amano suggested that Iran had been doing nuclear weapons work -- a suggestion based in part on intelligence provided by member states -- Moscow cried foul. Over the last several years, Russian diplomats have used the phrase "intelligence-driven" instead of "information-driven" to describe -- and criticize -- the IAEA's new safeguards approach. How can Moscow be sure that the IAEA, on the basis of bad information, won't provide cover for interference by the United States and its allies in places where Russia has its own allies and interests? Russia was not pleased with the handling of information obtained by the IAEA which showed that a former scientist in the Soviet nuclear weapons complex had worked in Iran, and it was taken by surprise when U.S. intelligence revealed in 2009 that Iran had secretly built a uranium-enrichment plant at Fordo. This year, Moscow challenged the IAEA's plans to move forward with its safeguards program and argued that it should be formally approved by member states.

Then there's Iran. On self-proclaimed behalf of over a hundred non-aligned countries, Iran has selectively embraced Russia's rhetoric. A few days after the AP broke its story on the nuclear weapons document, Iran's ambassador to the IAEA, Ali Asghar Soltanieh, spelled out in the IAEA boardroom what in Iran's view the revelation was all about: "Some Western countries, specifically the U.S., under the pretext of Iran's nuclear issue [and] allegations of possible military dimensions [to Iran's nuclear program] want to change the IAEA's mandate to intelligence-driven safeguards in order to be able to enter the national security domain of member states, mainly developing countries, without any restrictions." In other words, the IAEA's intended modifications of its safeguards system are actually all about Western countries spying on weaker states.

The leak of the document to AP in fact transpired in the way that critics of "intelligence-driven safeguards" fear. According to AP, the document was "leaked by officials from a country critical of Iran's atomic program to bolster their arguments that Iran's nuclear program must be halted before it produces a weapon."  In Vienna last week, speculation was rife that the document was leaked by disgruntled Israeli or Western officials to prevent the United States and other countries on the U.N. Security Council from trying to negotiate a solution to the crisis with Iran.

Amano rightly refused to confirm or deny whether the IAEA was familiar with the leaked document. But the episode underscores the need for the IAEA to carefully manage information from third parties, especially information that makes sensitive allegations on the basis of the intelligence findings of member states.

The IAEA is moving forward with State-Level safeguards for sound reasons, having learned that states are willing to risk that violations of their IAEA safeguards agreements would not be detected, and also that states are unwilling to provide the IAEA bigger budgets to keep track of increasing nuclear activity worldwide. But if in the future the IAEA is going to use more types of information to judge states' compliance with their safeguards, governments will cooperate only if they have confidence that the information will be appropriately handled.

Increasingly over the last two decades, the IAEA has gained experience in handling third-party data, and it has put in place a management system to process, evaluate, and protect its information. The less sensitive data is, the easier it is to manage. If the IAEA has questions about the credibility of open-source data, it can directly communicate with the managers of open-source databases. Far, far pricklier is sensitive and classified information from a member state that alleges that another country is engaged in clandestine activities. A country might give the IAEA photos pointing to undisclosed activities somewhere else, but beforehand the evidence will be degraded, making it more difficult to authenticate.

Debate in the media over the meaning of the leaked Iran document probably resembled internal discussion of how to interpret some documentary evidence obtained by the IAEA. Conversations with enough people who might know have persuaded me that the IAEA had likely seen and evaluated the document before it was leaked to the press, and that there was an internal discussion at the IAEA about whether the document was genuine and what it implied.

Amano said last week he is willing to respond to member states' questions concerning the future of the IAEA's safeguards system. Before that happens, the IAEA and P-5 states should try to address and resolve the apparently weighty reservations that Russia has voiced this year. We don't know exactly what the details are. Russia may have specific technical issues with the evolution of IAEA safeguards, but its interventions during closed IAEA meetings suggest it has more principled, lingering concerns about how safeguards judgments will be made in the future.

Ultimately, however, the IAEA's credibility in judging third-party information in critical situations rests upon the shoulders of its director general. In 2003, Amano's predecessor, Mohamed El Baradei, concluded that intelligence asserting that Iraq had restarted clandestine nuclear work was not genuine. In part for that, he and the agency were awarded the Nobel Peace Prize in 2005. Six years later, Amano judged intelligence on Iran to be authentic, and he took a calculated risk in making his findings public. For over a year, these weighty allegations have not been admitted by Iran. How Amano handles them now may be critical to whether the P-5+1 can strike a deal with Iran in the months ahead.

Safeguards is where the rubber hits the road in the fight against nuclear proliferation. Keeping them effective involves unspectacular detail work carried out by technical experts. Over the last decade, specialists have been quietly changing the architecture of the safeguards system, but they haven't explained things to the outside world -- including the IAEA's member states. Some countries now have concerns. Careful management of third-party information is essential for the IAEA's credibility. If the IAEA doesn't carefully and sufficiently address these matters, a coalition of unwilling member states could set back further evolution of safeguards to snuff out future clandestine activities.