Time to cash out: Israel should fast-track its natural gas sell-off

In the shifting landscape of global energy, Israel faces a pressing question: Should it cash in on its natural gas reserves now, or hold tight in a world that’s sprinting away from fossil fuels?

The latest World Energy Outlook 2024 from the International Energy Agency sheds some light. Solar power is set to quadruple by 2030, becoming the top electricity source by 2033. Clean energy is projected to surge by 44% by 2030, overtaking all other energy sources by the mid-2030s. Renewables are climbing at 2.7 times their current levels, just shy of the ambitious tripling target. Electric vehicles are expected to displace 6 million barrels of oil per day by 2030, up from 4 million last year. Most tellingly, fossil fuels are projected to peak by 2030.

For Israel, perched atop the Leviathan gas field, these trends present both an opportunity and a conundrum. Natural gas has been hailed as a cleaner bridge fuel, but bridges are meant to lead somewhere—not to be lived upon indefinitely. With global demand for fossil fuels nearing its zenith, the window to capitalize on natural gas exports may be narrowing.

Selling off its gas reserves now could maximize revenues before prices potentially plummet in a decarbonizing world. The proceeds could then be invested in scaling up renewable technologies, energy storage, and smart grids. It’s a bit like selling your stake in horse-drawn carriages just before the Model T hits the market.

View of the Israeli Leviathan gas processing rig as seen from Dor Habonim Beach Nature Reserve, on January 1, 2020 (Flash90)

Economically speaking, the timing couldn’t be more critical. Global natural gas prices are currently elevated due to supply constraints and geopolitical tensions, but these conditions won’t last forever. As nations worldwide accelerate their shift to clean energy, the demand—and price—for natural gas are likely to eventually decline. 

By selling its gas reserves now, Israel can capitalize on favorable market conditions. The windfall could be substantial, providing capital to invest in domestic renewable industries. This not only spurs job creation and technological innovation but also positions Israel as a leader in the burgeoning global clean energy market. In essence, it’s leveraging a perishable asset to build a sustainable economic future.

Critics might argue that retaining natural gas for domestic use ensures energy independence. But is clinging to a devaluing asset true independence, or merely anchoring oneself to the past? The sun-drenched Negev, but other areas too, offers an abundant, untapped resource. Solar energy doesn’t just reduce emissions; it enhances energy security by minimizing reliance on imported fuels and volatile markets.

Moreover, investing in renewables aligns with global trends and technological advancements. Electric vehicles are not a fad; they’re displacing millions of barrels of oil daily. Clean energy isn’t just for eco-warriors; it’s becoming the backbone of modern economies. 

The government’s role is pivotal. Policies encouraging rapid export of natural gas, coupled with incentives for renewable investments, could catalyze this transition. Streamlining regulations and supporting innovation in storage and smart grid technologies would further solidify Israel’s energy resilience. Red tape shouldn’t be the knot that strangles progress.

In a world racing toward clean energy, the real risk lies in standing still. It’s time for Israel to decide whether to bank on the fading glow of natural gas or to harness the rising power of the sun. The stakes are high, but so is the potential payoff.