'Gas exports will create jobs in Israel'

Amid heated debate over exporting Israel’s gas finds, visiting US commerce VP Myron Brilliant encourages a flexible, balanced approach.

By
May 21, 2013 05:36
4 minute read.
Tamar natural gas rig.

Tamar natural gas rig 370. (photo credit: Albatross)

The Israeli government must educate the public as to how a strong natural gas export policy will not only strengthen the country’s economic position globally but also create jobs at home, a United States Chamber of Commerce official told The Jerusalem Post on Monday.

“I think there’s a good debate going on in the government – a healthy debate on how to maximize the gas finds and how to strengthen the domestic economy and have a supply that provides energy security for 30 to 50 years, combined with the reality that there could be an abundance of gas that could be exported,” said US Chamber of Commerce executive vice president and head of International Affairs Myron Brilliant.

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Brilliant was in Israel from Saturday through Monday meeting with various government officials with the aim of fostering further cooperation between the US and Israel on the latter’s emerging hydrocarbon industry.

Just a week-and-a-half ago, Brilliant sent a letter and a detailed 12-page memo to Prime Minister Binyamin Netanyahu as to how the two countries can advance this partnership, which could also serve as a “catalyst” for elevating overall commercial ties.

In order to maintain and strengthen the relationship, however, Israel must establish stable, supportive and transparent policies and regulations for handling its gas both at home and in its export capacity, the Chamber of Commerce official wrote.

Because the US has recently gained a wealth of experience from its own gas finds, Israel should take advantage of the country’s expertise as it develops those policies that will regulate the industry, the memo said. Although warning that excessive regulation can threaten economic and security goals, the memo stressed, the government must push forward scientifically rooted environmental safeguards to protect its resources.

Meanwhile, an export program for gas must be grounded in certainty and clarity, as an unstable program could “paralyze energy sector activity” and discourage future investors, the memo said.

Israel must also be able to guarantee uninterrupted gas flows by accumulating reserves in gas reception terminals so that backups exist in the event that a terminal fail.

Revamping the archaic Petroleum Law of 1952 will also be critical, as will streamlining regulatory framework so that investors and stakeholders do not have to contend with such a plethora of regulatory bodies, the memo argued.

Together, Israel and the US should move forward with work on improving cyber and physical protection mechanisms for energy facilities, and should continue cooperative research and development activities on an academic level, the memo stressed.

Opening a branch of a US non-governmental organization in Israel – such as the American Petroleum Institute – could also be worthwhile for Israel’s regulatory future, the memo noted.

The memo was well received and was widely distributed among different ministers and government officials, Brilliant noted on Monday.

Throughout Israel, environmental organizations have been up in arms over the possibility of the country exporting up to half of its natural gas resources, if recommendations from the Zemach Committee – chaired by Energy and Water Ministry director-general Shaul Zemach – do end up receiving government approval.

While Brilliant said he is fully aware of and understands the concerns, he stressed that “an export policy that gives some regulatory clarity” can only serve to benefit the country.

Only such a policy can bring in new participants to the market, who will potentially be able to increase natural gas explorations and finds, Brilliant explained.

“It’s not just the direct beneficiaries,” he said. “It’s the indirect beneficiaries.”

Increased dialogue between the US and Israeli governments on energy matters may be able to provide constructive support for Israel’s potential aim of exporting some of its finds, he continued. The US, too, has been undergoing a similar debate on hydrocarbon exports, and all the while the Chamber of Commerce has been advocating exporting the resource in a liquefied natural gas (LNG) state, Brilliant explained.

“We believe that we can keep costs low in our economy, secure energy resources but also develop export markets that can create jobs,” he said. “You can secure growth in your domestic market by having a balance.”

Like America, Israel needs to develop a stronger energy policy, with the understanding that energy protocols cannot be separated from economic and security strategies, according to Brilliant. In part, this mission can be accomplished by strengthening “the vibrancy of the economic relationship between Israel and the US in technology fields,” he said.

It is the goal of the Chamber of Commerce to see more US energy firms coming to Israel’s Eastern Mediterranean for natural resource exploration, Brilliant noted.

Although expressing certainty that a decision to export gas would be the correct path forward, exactly how Israel should position itself in the global energy market, Brilliant argued, can be flexible.

One such option, he noted, would be working together with neighboring Cyprus, a nation that also has sizable gas discoveries and plans to construct an LNG export facility.

“There’s no question that in looking at new markets in the region that Israel will have to be creative in finding partners in distributing, and going through Cyprus is just one of perhaps a few options that may be available,” Brilliant said.

“There are only a few options so it makes sense for the Israeli government to consider all options recognizing the logistical challenges.”


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