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Boogeymen Trifecta: Murdoch Allies With Oil Company, Cheney

The News Corp. baron and the former veep are forming a conspiracy Voltron with a shale oil exploration company in Israel and Colorado, betting it will do serious business–and even transform Murdoch’s media empire.

Rupert Murdoch is one of the world’s
best known media barons and may or may not be a bud to Steve Jobs. But as hype swelled around his iPad digital project, The Daily, Murdoch was also investing in an
Israeli-American oil shale company with ties to Dick Cheney. Can his
legendary business savvy help out an upstart oil firm?

Oil shale may be the answer to worries about peak oil, but it is highly expensive to extract and has a high ecological cost.

Lord Jacob Rothschild and Murdoch just
purchased a joint 5.5% stake in Genie Oil and Gas Inc.
, a
division of the IDT Corporation. The equity stake purchase by Murdoch
and Rothschild is worth approximately $11 million. Genie is a new
face in the energy market; the company just
launched this summer
.

Murdoch is slated to join Genie’s
advisory board. Other members include:

American Shale Oil is a joint venture
between IDT and French firm Total S.A.

Public statements by both Genie and
their investors have stressed the firm’s American and
Israeli (read: non-Arab, non-Iranian, non-Venezuelan) roots. According to a statement by Murdoch, “I believe
Genie Energy’s technologies and vast shale oil licenses have real
potential to spur a global, geo-political paradigm shift by moving a
major portion of new oil production to America, Israel, and other
western-oriented democracies.” Murdoch also said that “Covering
and distributing news has been my life’s work […] If Genie’s effort
to develop shale oil is successful, as I believe it will be, then the
news we’ll report in the coming decades will reflect a more
prosperous, more democratic, and more secure world.”

Perry was even more explicit, stating
that “Both America and Israel have significant shale oil reserves.
It’s difficult to overstate their potential to improve our
respective economies and national security. […] Genie Energy is
developing the technologies America and Israel want to make rapid
progress toward energy independence, while IDT Energy is poised for
continued growth in the consumer market. I’m very excited to work
with their management team to help meet the energy needs of the U.S.
and Israel for decades to come.”

Genie is currently working on two oil
shale exploration projects in the United States and Israel.

In Colorado, Genie is involved in
American Shale Oil’s extraction testing project in Colorado’s Green
River Formation
. The Green River Formation is the largest oil
shale deposit in the world and is believed to contain anywhere
between 1.2 and 1.8 trillion barrels of oil. Much of the oil is
currently inaccessible; however, even the currently accessible amount of 800 billion barrels in Green River exceeds Saudi
Arabia’s explored oil reserves. American Shale Oil is one of four
companies that was given a tender to develop the Green River
Formation; the firm’s portion of Green River is believed to contain
10 billion barrels of oil.

Meanwhile, Genie is embarking on a
large-scale project that could turn Israel into a major oil producer.
Genie is the 89% owner of Israel
Energy Initiatives
(IEI), which just landed a shale oil
exploration and production license covering 238 square miles in the
Judean Hills. According to Amiram
Barkat
of Israeli business publication Globes,
“The company believes that its shale oil cracking technology can
free the world from dependence on Arab oil and turn Israel into an
energy powerhouse able to produce 300 billion barrels of
non-conventional oil at a cost of up to $40 per barrel.” IEI is
embarking on a pilot project in the Valley of Elah in the Judean
Hills to produce 500 test barrels of oil, despite fierce residential
opposition. Communities around the Valley of Elah have become
well-off bedroom suburbs of Jerusalem and are home to a large
nature reserve
and a thriving wine industry.

Geopolitical
troubles may prove to be a future headache for Genie: The shale oil
formation their Israeli tender gives license is adjacent
to the border
between Israel proper and the West Bank. Areas of
the shale oil formation may spill over into the West Bank; the
separation wall between Israel and the West Bank runs adjacent to the
believed oil-containing lands.

According to Rothschild, “Rupert Murdoch’s extraordinary
achievements speak for themselves and we are very pleased he has
agreed to be our partner. Genie Energy is making good technological
progress to tap the world’s substantial oil shale deposits which
could transform the future prospects of Israel, the Middle East and
our allies around the world.”

[Photo via World
Economic Forum
]

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