Due to the US’s wealth of experience in harnessing energy from the hydrocarbons
found within its borders, Israel should be making use of its partner’s knowledge
while creating policies for its own emerging natural gas sector, the US Chamber
of Commerce has recommended.
“The energy dynamic that has shaped the
Middle East region and the world for decades now opens opportunities for Israel
to be more prosperous and secure than at any point since her founding,” US
Chamber of Commerce Executive Vice President and head of International Affairs
Myron Brilliant wrote in a letter to Prime Minister Binymain Netanyahu on
Brilliant sent the letter to Netanyahu along with a detailed,
12-page memo as to how the two countries can advance their cooperation in energy
exploration and production, a move that can be a “catalyst” for elevating
overall commercial bonds.
While “unprecedented US-Israel commercial
cooperation” has already taken root in the hydrocarbons sector, to maintain that
level of collaboration, Israel must establish stable, supportive and transparent
policies and regulations for handling its gas, the Chamber of Commerce official
“The United States and Israel enjoy a special relationship –
one grounded in widely shared values and strategic interests – and Israel’s
nascent hydrocarbon sector offers an exciting new vista for deepening this
relationship, given the United States’ deep experience in the sector,” Brilliant
Only two weeks ago, Canadian Natural Resources Minister Joe Oliver
visited Israel with similar sentiments for furthering Canada and Israel’s
cooperation on the same subject.
Oliver made a call for project proposals
under a $5 million Canada-Israel Energy Science and Technology Fund that he and
then-energy and water minister Uzi Landau established in October.
the US has recently benefited from significantly increased natural gas
discoveries, the country is able to offer Israel guidance on developing its own
policies going forward.
The benefits of the sector can be maximized when
the government monitors rather than dictates market forces, and excessive
regulation can threaten the economic, security and environmental goals of the
government, the Chamber of Commerce memo warned.
safeguards that are rooted in science will ensure proper protection of the
resources, the memo said.
Also critical to developing the sector is an
export policy grounded in certainty, according to the Chamber of Commerce. An
unstable export program “can paralyze energy sector activity,” and sufficient
policy clarity for the future is vital for producers to make informed investment
and production decisions, the memo said.
Because energy trade is very
expensive and requires long contracts, predictability must be assured, and the
economic benefits that Israel can reap from allowing exports would be
Developing an export policy has been particularly
controversial in Israel over the past year. The offshore Tamar reservoir that is
already flowing into Israel contains 250 billion cubic meters of gas for
domestic purposes, and its neighboring, more than double-sized Leviathan is
expected to be allocated partially for export and partially for home
While the Zemach Committee – headed by Energy and Water Ministry
director-general Shaul Zemach – recommended a maximum of 500 billion cubic
meters be permitted for export, environmentalists have slammed this figure as
“The Tzemach Committee’s recommendations would provide an
excellent foundation and, if adopted, incentivize greater participation by
international oil and natural gas companies in the Israeli market,” the Chamber
of Commerce memo said.
The competition developed from adopting such
policies would allow for maximization of offshore reserves while providing for
domestic demands and generating vital revenue from export, the memo
In addition to providing certainty in its export market, Israel
also must ensure that there is redundancy in transmitting the gas to the
country’s pipelines – as currently only one reception facility exists for Tamar,
the Chamber of Commerce noted. Despite the fact that environmentalists and
residents have argued against a northern reception facility in their backyards,
the government must assure the private suppliers that there will be additional
entry points, the memo explained.
As Israel goes forward with its
hydrocarbon future, the country also must revamp its archaic Petroleum Law of
1952, which does not meet the needs of modern production, the Chamber of
The government can remedy this situation by passing a
single reform package with comprehensive legislation that will allow for modern
regulatory framework and provide stability to the natural gas
Critical to that regulatory framework will be a streamlined
environment that does not force investors and stakeholders to contend with so
many different regulatory bodies, the memo said.
Because the US boasts a
wealth of experience in exploring and extracting hydrocarbons, there are
specific examples of ways America and Israel can cooperate on the latter’s
energy development going forward, according to the Chamber of Commerce. For
instance, the two could work on protecting energy infrastructure from physical
and cyber attacks by directing existing homeland security cooperation efforts
between the two countries into the energy sector, the memo said. Meanwhile, the
US can help Israel formalize its maritime borders against challenges from
Lebanon, in order to forestall disputes that could hinder gas production, the
Another worthwhile idea could be for a US non-government
organization such as the American Petroleum Institute to open up an Israel
office, to help the country develop its industry standards, the Chamber of
Commerce said. Continued bilateral conferences and joint educational programs
between the two nations would also be beneficial, as well as expanded
cooperative research and development funds, the memo explained.
creating a favorable business environment, Israel can attract the world’s
leading companies and thereby pave the way for continued progress in executing
responsible and growing hydrocarbon development,” the Chamber of Commerce
In his own letter, Brilliant informed the prime minister that he
would be visiting Israel on May 19 and 20 to discuss these issues in further
detail, and he invited Netanyahu to conduct a meeting with him.
security is a strategic priority for both of our countries – and one that
promises to expand our strategic choices in a challenging world,” Brilliant
wrote. “The Chamber looks forward to expanding our partnership with Israel in
this sector, with this memo, and the broader commitment it signifies.”
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