In case you’ve missed the news, I am happy to report that Israel has recently joined the exclusive ranks of nations that are able to meet their own energy needs. While this would be a most welcome development for any country, it is an especially and immeasurably great blessing for the State of Israel. Since energy costs touch every aspect of our daily lives, either directly or indirectly, much less expensive fuel should translate into much more affordable living, with particularly large savings in what we pay for cooling, heating, lighting, transportation, cooking and yes, even water.
You may be wondering: “Just how is the cost of these basic necessities related to the availability of natural gas?” The short answer is that natural gas is the most fungible conventional energy source there is, which basically means it can do just about anything that crude oil, coal or even nuclear based energy can. And the kicker is that it does it more efficiently and with much less harm to the environment. It’s no wonder then that the world is rapidly transitioning toward natural gas in every major sector of energy demand.
Let’s start with electricity. For several decades now, most of the new power plants coming online in the industrialized world have been fueled by natural gas. We were a bit late to the show, but new natural gas plants have met all of the rapid growth in Israel’s power consumption since 2006. On top of that, these much cleaner, natural gas-fueled plants have replaced about twenty percent of coal-fired generation, improving our air, soil and water in the bargain. Since fuel represents the lion’s share of the cost of producing a kilowatt-hour (Kwh) of electricity, it is the key determinant of how much Israel Electric Corp (IEC) is allowed to charge for each Kwh it sells us. This means that much cheaper natural gas should translate into much cheaper electricity for heating, cooling, lighting and all our other household power needs.
And then there’s water. By the end of next year, eighty-five percent of all our household water needs will be met through seawater desalination. Four plants are up and running, and a fifth one in Ashdod is scheduled for completion by next year. Seawater desalination is an extremely energy intensive process, and each of these plants requires the equivalent of a moderate-sized power plant to meet its electricity needs. And since the state-owned water company’s rates reflect its costs, the affordability of water in Israel is directly linked to the cost and availability of fuel to run the country’s desalination plants. In other words, cheap natural gas should reduce our water bills.
Finally, there’s the matter of getting people and goods around Israel. For the first time since modern Israel’s founding, it is very likely that Israel will soon free itself from dependency on crude oil products to fuel the nearly two and a half million vehicles on our roads. This will most likely occur in one of two ways. The first is electric-powered vehicles (EVs). Better Place has deployed the infrastructure needed to support a mass transition to electric cars, making Israel the most advanced country in the world and a model for others in this domain. But another possible path away from oil is natural gas vehicles (NGVs). This technology is even more mature than electric cars, and attempts at mass adoption have been incredibly successful. One such example is Pakistan, which may not be a role model in many things, but has managed to transition itself almost entirely to NGVs. Kits to convert gasoline or diesel cars into NGVs are available for most vehicle makes and models, and can be bought and installed for well under $1,000. Or drivers can just choose from a broad selection of comparably priced factory-ready NGVs .
Since the cost of driving a mile on natural gas is much lower than with gasoline or diesel, the many millions of drivers around the world who have made the switch to NGVs have realized tremendous savings. It would not be surprising if Israelis join this accelerating trend. But whether it’s EVs, NGVs or some combination of the two that succeed here, it is a very safe assumption that the raw fuel required will be natural gas. NGVs use compressed natural gas (CNG). Existing gas stations can add CNG filling capability with minimal investment. And EV’s will require more electricity production, for which natural gas will be the fuel of choice, as we have seen.
But having our own energy resources means a whole lot more to us than just cheaper living. As is the case for most other things, Israel is in a very unique situation when it comes to energy. Our neighbors have the biggest energy reserves in the world, but the only country in the world they won’t sell to is us. Egypt was the exception for a while, but it effectively joined the boycott earlier this year when it cut off all natural gas exports to us, without warning, or any regard for the long-term contract they had signed with us. So much for pieces of paper.
And so we are forced to look much farther afield, to places like South Africa and the Caspian Sea, for the coal and crude oil we need to fuel our daily needs. But even these expensive imported supplies are at risk of being cut off, should any more of our key suppliers decide that selling to us just isn’t geopolitically expedient. And what would we do then?
Luckily, as we have already pointed out, and whether you believe in divine providence or not, an answer has been provided. Tamar, located roughly 80 kilometers off the coast of Haifa, was the largest conventional natural gas discovery in the world in 2009, containing over 9 trillion cubic feet of natural gas. Just one year later, and 40 kilometers further offshore, the Leviathan field was discovered. About twice the size of Tamar, Leviathan is the largest offshore natural gas discovery in the world in over a decade.
After the geologists confirmed the Leviathan field’s massive energy deposits, Yitzhak Tshuva proclaimed: “… a day of celebration for all of us. The state of Israel is an energy independent country.” As the owner of Delek Group, which is developing these projects with its American partner Noble Energy, Tshuva had an extra reason to celebrate, or billions of extra reasons, to be more precise.
Unfortunately, though, Tshuva neglected to mention that our energy independence has an expiration date. And regrettably, he also failed to point out that his company’s plans would bring that date significantly forward. This is because Delek and its partners wasted no time in shopping Israeli natural gas around the world, in search of the highest bidder. And just before the start of Passover, in a fairly quiet, largely unnoticed announcement, it was revealed that the first successful customer was Russia’s state-controlled natural gas monopoly, Gazprom. It had signed a letter of intent to purchase what amounts, by my estimates, to half of Tamar’s expected production, all but ensuring that it will be completely depleted within just a few decades.
Now I must admit that it is painfully difficult for me to even try and understand how Israel can allow Russia to gain control over one of our most important strategic assets. We’re talking about Russia, the country that our worst enemies — Iran, Syria, Hamas, Hezbollah and others — can consistently rely upon for unwavering political cover, nuclear technology, advanced weapons systems and any other support it can muster on behalf of the anti-Zionist cause. This is the same country that is intent upon achieving global dominance in the natural gas sector, and has demonstrated in the past its willingness to mercilessly use this power as a weapon against those who defy its will.
I realize that our leadership may view this sale as an opportunity to improve relations with Russia, President Putin’s recent visit to Israel is not just a coincidence. But it is our leadership that should realize that there is nothing that Russia or any other country can or will offer us that is as important to Israel’s future well-being as secure and affordable energy.
The bigger question is whether Israel should allow significant exports of our natural gas to begin with, no matter who the customer. Our government seems to be nearing a decision on this matter. Not only has it refrained from any public objections against the impending sale to Russia, but it is in the process of instituting guidelines that would allow half of all the natural gas discovered thus far to be exported abroad. These are the preliminary recommendations of the Tzemach Committee, which was appointed by Prime Minister Netanyahu to help determine how much of Israel’s natural gas those extracting it should be allowed to export. The initial report recommended that Israel retain only about 400 billion cubic meters (Bcm) of natural gas. This will be enough, by the committee’s estimates, to meet domestic needs through 2040.
The report does not indicate where Israel is supposed to get its energy after our current natural gas reserves are used up in twenty-odd years — half by us for our domestic needs and the other half shipped abroad. This is in spite of the report’s assumption that our economy will be much more heavily dependent on natural gas by that date. Instead of promoting energy independence, this approach would ensure that our supplies would run out much faster, as our dependence grows much greater.
Now I understand that the Tzemach Committee must be under considerable pressure from Delek Group and its partners, who have a financial interest in exporting as much gas as possible, as quickly as possible. After all, I do not believe that the volumes sold to Russia happen to coincide precisely with the maximum recommended level just by mere coincidence. And I also understand that Yuval Steinitz and his Finance Ministry have been pushing to increase exports even beyond the initially recommended limits, as his primary concern when it comes to Israel’s natural gas is how to accelerate the receipt of tax revenues from its sale.
But while the rapid extraction and monetization of Israel’s natural gas resources may be in the interests of Delek Group, Russia, and the Finance Ministry, I do not believe it is what’s best for the people of Israel. With natural gas, we have a chance for a future in which our daily needs can be met more affordably, without the ever looming risk of shortages and boycotts, while protecting our precious environment. Without our natural gas, neither we nor our children will ever know true energy security, independence, or prosperity.
We must therefore preserve Israel’s natural gas for Israel’s use only. The policies our government puts in place now regarding export limits will determine which of these futures will come to pass. Let’s make sure they choose the right path. Please visit, ‘Like’ and share our new Facebook page, The Power of Israel, and sign and share the petition you will find there.