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Water In Israel: Quenching Our Thirst For Peace and Providing Lessons for Texas

Israel Public Diplomacy Forum visits Texas leaders to discuss shared water concerns

AUSTIN, TEXAS, UNITED STATES, September 15, 2016 / -- The Old Testament is chock-full of references to water and its life and death impact on the economy and inhabitants of the land of Israel/Canaan. Abraham sojourns from Israel to Egypt during a time of famine (due to lack of rain). Isaac is reported to have dug many wells to survive here; and the Jewish people’s ultimate enslavement to Pharaoh in Egypt begins with Jacob bringing his extended family south, to Egypt during a 7-year period of famine (again, due to a lack of rain) in Israel. The most basic economic reward and punishment recorded in the Bible relates to having the rains fall in their time. In fact, peace in Israel is specifically described as a time when the land can be productive due to an abundance of water. (See Leviticus 26:3-4)

In short, with respect to Israel: When there is water, there is peace and when there is no water, there is economic turmoil and upheaval.

Guess what? Thanks to a combination of economic foresight, technology and steady rate of infrastructure investments, there is water in Israel and lots of it. What’s more, soon some of the investments made by Israel will be replicated in Jordan and Egypt and there are even water projects planned to be jointly executed between Jordan and Israel. Yes, you read that right, JOINTLY EXECUTED…Perhaps peace is coming; and the actors will not be the politicians, but rather, a bunch of nerdy engineers and investment bankers. Let me explain.

In 1948, at the time of the founding of the State of Israel, there were approximately 1 million people living here. Today, including the West Bank and Gaza, the number is approximately 10 million. Statistically, rain has been falling at a relatively constant rate. Thus, with a population that has grown by 10 times, and consumption patterns such that we are using more water than ever, how can a land that depends on rain for water survive, let alone thrive?

The answer is desalination, and lots of it. Since 2005, Israel has successfully built 5 separate desalination plants spending a total of $1.2 billion. Now, instead of relying on the rain, the Sea of Galilee (where Jesus is said to have walked on water) and an extremely efficient water company Mekorot, approximately 50% of Israel’s water supply comes from these five plants. (Parenthetically, Mekorot is by far the world’s most efficient producer of recycled water, able to reuse 86% of treated waste water, with the next closest country being Spain at 19%.)

But Israel hasn’t just perfected the technology of taking sea water and making it drinking water for its own use. IDE, an Israeli based desalination company, which has built three of the plants referenced above, has, over the course of the last 10 years, become one of the world’s leaders in desalination technologies, having completed dozens projects across the globe. Last week, China’s CCCC – China’s largest infrastructure engineering and construction company– tabled a $650 million bid to take full ownership of IDE. Apparently, Israel’s water accomplishments are not a secret in the world of business.

But there’s more. Israel has learned some pretty sophisticated finance lessons from its desalination experience. Further, Israel has begun to apply these lessons to other ambitious water projects. By providing a long term (25-30 year) government guaranteed contract to take the “fruits” of what amounts to a water production factory, Israel has discovered that it can work with the private sector (locally and internationally) to bring the projects to life quickly and efficiently. Using these methods, Israel is now running 3, yes, 3 projects to pump water up a mountain at night when energy is cheap, and run the water downhill during the day to create hydroelectricity. In all, these projects will cost $1.4 billion and will be capable of delivering over 800 megawatts per year, more than is required to power the entire city of Houston and Austin.

Finally, Israel is now embarking on its most ambitious and creative water projects yet; refilling the Dead Sea. The Dead Sea is well known as a one of the world’s true natural wonders. With a salinity rate of over 33%, the Dead Sea is 10 times saltier than the ocean. Physically, it is fed by the Jordan River from the north, and forms part of the borders of Israel, Jordan, and a future Palestinian state. It is also the lowest place on earth at 1,400 feet below sea level. (For reference, New Orleans, which is infamously below sea level is 7 feet below sea level.) Importantly, since 1960 due to increased withdrawals upstream from the Jordan River, the Sea of Galilee and their tributaries, the Dead Sea has shrunk by approximately 40%. In a sense, the Dead Sea itself, is dying.

What if we could pump water DOWNHILL to the Dead Sea and generate hydroelectric power along the way? What if we could actually desalinate sea water being used in such project and use the brine (i.e., the waste product of desalination) to provide appropriately salty water to the Dead Sea? If all of this were possible we could (i) create much needed drinking and irrigation water to Jordan and southern Israel, (ii) save the Dead Sea and (iii) actually generate electricity and profits along the way. Enter the Red-Dead Project.

Following years of planning and feasibility studies conducted in cooperation with the World Bank and Israel, Jordan has recently announced that 17 international bids have been received to build a system, as described above. Israel is itself studying a similar additional project to bring water from the Mediterranean Sea to the Dead Sea (the Med-Dead Project).

By working in cooperation both across governments and with the private sector, politics and profits can combine to become a powerful engine of change in the Middle East, and water can be the fuel that powers this engine. In the end, an abundance of water here can realize its biblical potential to bring peace and prosperity to a region literally thirsting for it.

The State of Texas—one of Israel’s closest friends—is too experiencing explosive growth and demands upon its own limited water resources. That is why the Israel Public Diplomacy Forum is visiting the Lone Star State. We are meeting with Texas leaders at the both the state and community levels to listen, learn, and encourage increased cooperation between Texas and Israel on providing long-term solutions to our shared water needs.

Hillel Schuster is a Partner, and Head of Corporate Finance and Management Consulting in KPMG, Israel. He is a Graduate of Cornell Law School, Cornell’s Johnson School of Business and holds an L.L.M. in Taxation from New York University. He is a frequent lecturer on macro-economic topics relating to Israel and the Middle East. He is participating in the Israel Public Diplomacy delegation’s visit to Texas in September.

Avi White
First Source Interactive
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