Israel’s Gas Pains

Last week a new liquefied natural gas buoy opened off the coast of Israel. It is being touted by the Israeli government as a energy lifeline until the Tamar oil field is functioning this April, after Egypt cancelled its trade agreement to supply natural gas last year.  The $134 million dollars spent by the government (and ultimately Israeli taxpayers) building the buoy is expensive, and ultimately makes the typically less expensive natural gas just as costly as the diesel fuel currently being burned in its stead. Although a financial draw, this was money wasted that could have ultimately lead to more reliable and less expensive sources of renewable energy for the country.

Israel’s continued reliance on fossil fuels is a national security liability that also puts an undue economic hardship on its people. Israel’s search for countries to buy petrol fuel from ends up being much more than a simple trade agreement, and costing the country more than it thinks in the long run. For a country that has show it’s capacity for developing and implementing revolutionary technology, there is no reason why we should still be relying on hostile nations for power, or finite sources of energy.

Strategic Partnerships

A recently inked agreement to import oil from the newly created South Sudan has deeper strategic implications. Israel was one of the first countries to recognize South Sudan when it announced itself as an independent country in July of 2011, and quickly began developing diplomatic ties. But, Israel’s friendship with South Sudan is more than that of another small country, emerging from impossible odds to exist. The fact is, its northern neighbor Sudan harbors a very real security threat to Israel.

Israel has bombed weapons being produced and trafficked from Sudan. Not out of any altruistic desire to keep illegal arms off the streets, but because they were headed for Hamas in Gaza. Sudan was the home base of Osama Bin Laden until 1996, and its government’s support of Hamas necessitates Israel keep an eye on its actions

Geopolitically, Israel’s investment in new infrastructure to circumvent Sudan and bring oil to the Indian ocean gives them a legitimate reason for being in the area. However, with the pipeline’s expected price tag of $2 billion dollars, it’s hard to see how it is economically worthwhile.

Currently Israel imports most of it’s oil from Azerbaijan. What, on the surface, seems like a simple trade relationship between two nations, was revealed last year to actually have deeper implications. Both countries share a common interest in keeping Iran from developing a nuclear bomb, which motivated the Azerbaijani government to discuss potentially allowing Israeli planes to launch an attack Iranian nuclear facilities from Azerbaijani soil. But having a common enemy today doesn’t ensure they will be your ally tomorrow.

Dependence on Neighboring Countries

As we saw with Egypt, governments and alliances can change very quickly.

In 2005, after many years of negotiations, Israel signed a deal with Egypt to import natural gas, supplying Israel with 40% of the gas used by the country. After Hosni Mubarak ouster, the pipeline was bombed 14 times, until Egypt finally announced it was terminating the contract. They claimed that Israel was exploiting them, paying far below market share for the gas it was importing. While it could be that the new military government was simply looking for an excuse to end the agreement signed under Mubarak, as a former shopper of Costco, I thought the whole idea of buying in bulk was to get a discounted rate. Israeli citizens were also left to suffer higher electricity costs, since the country had to start using more expensive diesel fuel every time the natural gas flow stopped.

If a country who after 30 years of peace was so quick to end such an otherwise valuable trade agreement, which brought in hundreds of millions of dollars in revenue, Israel must recognize that any trade agreement it has, whether to import energy or other resources, could be likewise cancelled.

The Case for Renewable Energy

Unlike people, renewable energy is reliable. Tel Aviv alone has an average of 318 sunny days per year. Unless the clouds are suddenly overthrown and replaced over by a new regime that threatens to block out the sun, solar power is a reliable source of energy worth investing in. The the cost of production of photovoltaic cells has decreased dramatically over the past 30 years. There is no need to worry about ‘peak solar‘, with the energy harder to extract once we reach a tipping point.

Israel also has the ability to get more out of the resources it already has- with over 200,000 wind turbines already connected to its grid, an Israeli company Leviathan Energy has devised a way to get up to 40% more energy production from each turbine. There are also Better Place battery changing stations all over the country, so you can still road trip throughout Israel without supporting hostile nations. Because, let’s face it, even if Israel is buying oil from countries who aren’t actively trying to destroy the ‘Zionist Cancer’, the oil market is international, and as long as Israel is buying from someone, it effectively puts money in everyone’s pocket by increasing the demand.

Of course, Israel should continue to develop the Tamar and Leviathan deposits – but they should be for export. Use part of the revenue to invest in increasing the installed PV and wind power capacity, or anything else as long as it doesn’t have to buy it from another country. The more Israel invests in its own capacity, the better technology they’ll be able to generate and export. Israel should do the world a favor by being an energy exporter they can rely on, without having to rely on common enemies.