The Age of Magic Money
Can Endless Spending Prevent Economic Calamity?
In October 2014, Israel struck a $15 billion gas deal with Jordan—it would export 1.6 trillion cubic feet of gas for the next 15 years, starting in 2017, from one of its two newly discovered oil fields in the Mediterranean. This deal was the latest in a string of negotiations that Israel has made in the region. The previous one, in January 2013, was signed with a Palestinian company—a $1.2 billion contract for 168 billion cubic feet of gas over 20 years. Both of these agreements, shepherded by the U.S. State Department, will ostensibly renew economic, and potentially political, cooperation between Israel and Arab states—Egypt has also expressed interest in tapping the mammoth reserves. As a result, Israel’s gas is being called a “lifeline for peace” in the Middle East. But the energy negotiations, conducted behind closed doors and with little public support, may do little to bring actual peace.
Israel’s new gas fields—