Oil-short Israel trying to reduce its dependence on imported fuels

In northern Israel, just outside the border town of Metulla, an Israeli gasoline station pumps petrol for pro-Israeli Lebanese villagers. "The only place in the Middle East where Israelis sell oil to Arabs," chuckles an Israeli Army officer stationed along the border.

The gas station is all the greater an anomoly given Israel's traditional anxiety about its energy supply.

Nonetheless, Israel's energy supply situation today is regarded as good -- even though it certainly is not sufficient to allow it to duplicate its Lebanese gasoline outlet elsewhere. And this is despite the loss of Iranian oil after the downfall of the Shah and the return of Sinai oil wells to Egypt as part of the Camp David agreement.

Israel is a nation dependent on imported oil for 99 percent of its energy needs. It is extremely vulnerable. Yet Israel has been able to obtain long-term oil contracts with Egypt and Mexico for half of its 8 -million-to-per-year needs. The rest comes from the spot market -- which at present is swimming in a surplus of oil.

Still, the country is paying as dearly as any other for its energy. Spot market prices are subject to great fluctuation, and the Mexican and Egyptian contracts were signed at late-1970s prices. Given political pressure from the Arab world, it is unlikely Israel will have alternate source countries to choose among in the future.

Recent reports from Britain, in fact, hinted that Israel might not be allowed to buy British North Sea oil, though coal would be available. Israeli Energy Ministry spokesman Itzhak Shomron, however, contends that oil deals between Israel and Britain are on a company-to-company basis and therefore not subject to British politics.

"If the oil is being sold for export I'm sure we will be allowed to bid for it," Mr. Shomron says.

Like most other countries, in the long run, Israel will have to reduce its dependence on imported oil. Coal and solar energy are two ways it is planning to do this.

Unlike oil, coal comes from basically pro-Israel nations such as the United States, Australia, Canada, South Africa, and Britain. The nation's first coal-fired power station, located at Hadera on the coast between Tel Aviv and Haifa, will come on line this year. This plus other new coal power plants should produce 40 percent of the nation's electricity by 1985, Shomron says.

Since two-thirds of the nation's energy is consumed by industry, Israel also is working toward large-scale conversion of factories to coal.

By 1990, Shomron says, 70 percent of the country's electricity will be from coal; this will be 30 to 40 percent of the total energy produced in Israel. But projected consumption shows that the same amount of crude oil will have to be imported in 1990 as today.

An intensive search is under way to see whether Israel sits atop any of the Middle East's legendary oil pools, but so far no significant reservoir has been found.

Israel is counting on its just-inaugurated Mediterranean-Dead Sea canal hydroelectric project to make up for 3.5 percent of its imported oil. The canal will cost an estimated $680 million, $120 million less than the Hadera coal plant.But Jordan opposed the project, believing that it threatens its phosphate operations on the east bank of the Dead Sea.

Once built, Shomron says, it would draw on inexhaustable seawater to generate power. The canal also would be coupled with electricity-generating solar ponds and could provide inland cooling for a nuclear power station.

Oil shale, geothermal wells, agricultural waste conversion, and various forms of solar technology also are being pursued. But any sources other than oil, gas , or coal will take a great deal of developmental attention before proving themselves.

Nuclear power, for example, is virtually ruled out because of Israel's refusal to sign the Nuclear Nonproliferation Treaty due to its nuclear weapons program. This has barred it from acquiring the technology needed to build atomic power plants.

According to Shomron, Israel may be able to develop the technology on its own , but he indicates environmental objections and the huge capital costs involved may deter nuclear power.

Shomron, however, expresses "a note of guarded optimism" about Israel's energy situation and even holds out the hope for "a solution to all our future problems by means of the discovery of petroleum beneath the soil of the state of Israel."

If that occurs, one of the great ironies in international politics will be the fact that the nation that is at the center of the political reasons for a world energy crunch (which began during the 1973 Arab-Israeli war) has worked itse lf out of energy dependence.