Netanyahu recommends keeping 60% of natural gas

Yacimovich slams 'robbery' of resource that belongs to public; vows to take issue to High court of Justice.

By SHARON UDASIN
Netanyahu flanked by Fischer, Shalom and Lapid 370 (photo credit: Amos Ben-Gershom/GPO)
Netanyahu flanked by Fischer, Shalom and Lapid 370
(photo credit: Amos Ben-Gershom/GPO)
Prime Minister Binyamin Netanyahu will propose to the cabinet on Sunday that Israel reserve 540 billion cubic meters of natural gas for domestic use – a 20-percent jump from previous government recommendations.
Netanyahu presented the proposed export policy – a contentious subject since the discovery of Israel’s copious gas supplies – at a press conference in his Jerusalem office on Wednesday afternoon, alongside Energy and Water Minister Silvan Shalom, Finance Minister Yair Lapid and outgoing Bank of Israel Governor Stanley Fisher.
Eastern Mediterranean natural gas developers have been urging the government to move forward with an export policy in order to provide certainty in the region and encourage future exploration.
Environmentalists, on the other hand, have been advocating for as much of the resource as possible to remain at home to power electricity plants, transportation and industry.
Following a year of discussions and consultations, the Zemach Committee – an interministerial committee led by Energy and Water Ministry director-general Shaul Zemach – recommended in August 2012 that the country maintain 450 b.cu.m. of gas at home and cap exports at 500 b.cu.m.
If Netanyahu’s proposal receives approval in the cabinet on Sunday, the country will be paving the way for exporting approximately 40% of its currently discovered gas, rather than the 53% figure suggested by the Zemach committee.
“The State of Israel received a gift from nature in large quantities of natural gas,” Netanyahu said. “After a series of long meetings, we have jointly decided to significantly increase the amount of gas for Israel’s use. This will supply our needs for 25 years. This is a balance between the need to ensure energy sources for Israel’s citizens and the need to export gas, which will generate revenue for use by Israel’s citizens.”
While gas from the 282 b.cu.m. Tamar reservoir is already flowing into Israel, development partners have yet to begin drilling in the neighboring 535 b.cu.m. Leviathan field, since the simultaneous domestic-export plan for the reservoir necessitates that an export policy first be in place.
The State of Israel will receive 60% of the profit revenue from the exports, which will likely amount to $60 billion in 20 years, the prime minister explained.
It is critical that the proposal receive swift approval, as countries that have delayed their decision-making too long have ended up without their gas, Netanyahu said. By starting to produce and export gas as soon as possible, the country will be able to ease the financial burden of its citizens and take care of national needs, he added.
“The gas is nothing less than a miracle that happened to Israel,” Lapid added. He noted, however, that “this does not mean that we can cease to be innovative and creative.”
He said that “the decision to export gas is good for the Israeli economy and will generate $60b. that will be invested in education, health, welfare and lowering the cost of living for the citizens of the State of Israel.”
From the environmental camp, attitudes toward the proposal were much less enthusiastic.
While Environmental Protection Minister Amir Peretz acknowledged that the recommendations constituted “the beginning of a trend of change,” he argued that the quantities allocated for home use were still insufficient.
Ministry calculations have forecasted that Israel will need to reserve at least 600 b.cu.m. of gas at home in order to supply the growing needs of the energy, industry and transportation industry, he said.
“Transportation is not getting the amount that it requires, even though it is the heaviest polluter,” Peretz said.
“We insist that the amount of natural gas for Israel be no less than 600 b.cu.m.”
Representatives from Adam Teva V’Din – Israel Union for Environmental Defense referred to the government officials as “weak” and slammed their proposal as a “capitulation to the gas companies.”
“Any decision that is based on the conclusions of the Zemach Committee is wrong, because it relied on virtual gas reserves,” said Amit Bracha, the organization’s executive director, referring to the fact that the figures for Leviathan are still technically estimates.
“Instead of acting as is required from an environmental, legal and moral perspective and moving the decision to a transparent discussion in the Knesset, Netanyahu chose to play a lottery with export numbers, to choose a number by fate and bet on the future of our children.”
The reaction of opposition leader MK Shelly Yacimovich (Labor) was even more harsh, as she called the proposal “a disgraceful capitulation to pressure from tycoons and a fatal blow to the economy, society and security.
“The decision to export gas is robbery of the Israeli public,” she said.
Yacimovich accused the prime minister and his team of employing “sneaky methods” and stressed that the gas resources “belong to all citizens.”
Unwilling to let the proposal pass without a fight, Yacimovich said she intends to thwart it in any way possible, and will take the matter – along with MK Reuven Rivlin (Likud-Beytenu), MK Moshe Gafni (United Torah Judaism) and Economic Affairs Committee chairman MK Avishay Braverman (Labor) – to the High Court of Justice.
“The decision on gas exports must come for a public, transparent discussion in the Israeli Knesset,” Braverman added. “The government is going to make one of the most important economic decisions in years without granting it public legitimacy. I call upon the attorney-general to require the ministers at the cabinet meeting on Sunday to bring the decision on gas exports to the Knesset.”
The companies that are exploring and developing Israel’s eastern Mediterranean natural gas did not provide individual responses to the export allocation proposal.
The Israel Union for Oil and Gas Companies praised the proposal and the work of the Zemach Committee as “professional,” formulated by an inter-ministerial, independent team that “balanced the needs of the local market with the tremendous potential of exporting the gas for every citizen of the country.
“We believe that the government should adopt the recommendations verbatim, so that it will be possible to benefit optimally and maximally from the gas discoveries and from the great advantages hidden within them,” the statement said.
Meanwhile, Miki Korner, founder and CEO of the M. Korner oil and energy consultancy group, stressed that while he feels that Israel needs only 30% of its gas in its domestic reserves, he was at least pleased to see that a decision has likely been made.
“At least they decided something,” said Korner, who was formerly chief economist and engineer at Israel’s Natural Gas Authority and participated as an adviser during the drafting of the Zemach Committee report.
“Let’s start with something.At last there is a decision,” Korner said. “I can’t understand why they couldn’t decide this two or three years ago.”