New York Times:

For decades, Israelis have taken perverse pride in what they lacked — oil and gas deposits. Few countries had looked so hard with so little result. Obliged to live off their wits, Israelis turned their country into a high-tech haven.
But enormous deposits of natural gas have been detected off the country’s northern coast. Last year, the United States Geological Survey estimated that more than 120 trillion cubic feet of recoverable gas reserves lie beneath the waters of the Eastern Mediterranean, most of it within Israeli territory. Several months after the report, another field of 8.7 trillion cubic feet was found off Israel and a second, twice that size, was detected and is thought to have a 50 percent chance of proving out.
Christopher Schenk, a geologist who led the Geological Survey’s study, said in a telephone interview that there was little doubt of the area’s enormous gas potential. Israel’s energy needs will easily be filled for the next generation by the gas, and the country could well become an energy exporter. Energy companies have been helping drive the Tel Aviv Stock Exchange into a swirl of anticipation, and the talk has grown heady.
“This is a huge deal that could change the geo-strategy of the region and Israel’s resources for years to come,” commented Einat Wilf, a member of Parliament who serves on the foreign affairs and defense committee.
The gas fields went undeveloped all this time in part because the big Western oil companies did not want to offend the major Arab producers by working with Israel. And their size is still modest in comparison to, say, those in Iran, with more than a quadrillion cubic feet of proven reserves, and even those in the United States, with nearly 250 trillion cubic feet of proven reserves.
But they are bringing with them a series of keen challenges, including heightened tensions with Lebanon over the boundaries of the gas fields, fears of rocket attacks, a citizens’ revolt over the location of processing plants, an ugly battle over government royalties, and concerns that Israel could blow its windfall and turn into a nation of single-resource slackers.
“Everyone is dreaming about a golden calf,” lamented Brenda Shaffer, an energy policy specialist who teaches political science at the University of Haifa. “We should be thinking about reducing pollution, establishing energy security and reordering our priorities. Our coalition system leads to a very politicized allocation of money. Unfortunately, more money won’t mean it will be spent differently.”
The costs and potential profits of the gas discoveries are a matter of speculation. The new fields are in theory worth tens of billions of dollars. But Israel uses more coal than gas for its electricity now, and shifting the balance toward gas will involve tough political fights with industry lobbies and trade unions.
The tensions with Lebanon — Israel’s neighbor to the north with which it remains technically at war — stem from Lebanon’s hope that some of the gas falls in its waters as well the patina of mistrust that hovers over the relationship.

The rest here.