'Exporting gas would help economy, politics'

To maintain the needs of the Israeli economy, the country will need to export a portion of the natural gas in its Mediterranean Sea reservoirs, Energy and Water Minister Uzi Landau said Monday.

He spoke at a conference called Energy as a Platform for Regional Development, held at Netanya Academic College.

Although the country should make sure to preserve 25 years worth of gas for its own citizens (there are about 40 years worth in the reservoirs thus far in the Tamar and Leviathan basins), several players should ideally join the exploration and production efforts to drill and export the remaining gas to other countries, Landau said.

Financially, natural-gas production in Israel “is going to work” only by exporting some of it, he said, but the export will only occur on a limited scale.

“The State of Israel is not a gas superpower – we are not Qatar,” Landau said. “There is a possibility for export, but we cannot compete with giants in the energy economy.”

Israel is not a gas superpower, and exporting gas would be a bad idea for the country, Chief Scientist Shlomo Wald said Sunday at a conference on energy security held in Sde Boker.

Because Israel only has 1,200 billion cubic meters of gas, it will “never be a player in the global market” and should instead keep the gas for its own needs for the next half century, he said.

Having this gas for Israel would give it the energy independence that it needs for the foreseeable future, Wald said.

Dr. Ephraim Sneh, chairman of Netanya Academic College’s S. Daniel Abraham Center for Strategic Dialogue, agreed with Landau on the need to export gas, saying Israel’s newfound gas reserves gives it the ability to build strategic political partnerships.

“Europe needs gas, and it tries to look for sources that are not Russia, not Iran,” he said, “and perhaps in the future it is going to look for sources that are not necessarily Turkish. Therefore it’s not just a discovery of gas. It can change the regional status of Israel, create new partners and connect us better to the European Union.”

The gas could also have a strategic impact much closer to home, in neighboring Jordan, which could benefit significantly from this source after losing the Egyptian gas supply as an incoming regular source, Sneh said.

Shermine Dajani, CEO of Jordan’s PanMed Energy consultancy firm, said: “With continued interruption 13 times of the Arab gas pipeline, Jordan was forced to use more heavy fuel oil. The cost of ongoing unreliability of Egyptian gas will cost Jordan $2.4 billion by end of 2012.”

Jordan is currently investigating a number of options to solve this problem, including importing LNG (liquefied natural gas) tankers off the coast of Aqaba, perhaps from Qatar, he said.

In addition to potential Jordanian customers, once the Palestinian Authority builds the power plants it intends to construct, the government there could purchase natural gas for their plants from Israel, Sneh said.

Dr. Brenda Shaffer, an expert on energy policy and management in the School of Political Science at the University of Haifa, warned that “with all the political advantages of gas there are also disadvantages.”

Countries producing gas tend to be involved in conflicts, and expertise in gas or oil does not protect a country from aggression, she said.

For example, Shaffer said, Libya was not immune to NATO attacks, and Azerbaijan has not received back its lost territories.

Although gas might be great for the economy and the environment, Israel must remember not to compare itself to a gas production giant like Russia, she said.

Israel must make sure that it maintains an ample supply from its reservoirs for its own security needs, Shaffer said.

“We have to be a little more modest about how much political impact Israeli gas will have,” she said.

Trading natural gas also does not necessarily amount to equal interdependence among countries, Shaffer said, stressing that while Israel had great dependence on Egypt in the gas deal, Egypt had little dependence on Israel as a result.

“I differ with Brenda [Shaffer] only on one thing: that it does not create mutual dependence. I think it does,” said Dr. Nimrod Novik, chairman of the Economic Cooperation Foundation and former vice president of the Merhav Group, which was responsible for establishing the gas pipeline between Egypt and Israel.

“I always believed that the day will come – because neither [Jordan] nor the Palestinians are going anywhere – where we will have cross-border cooperation in a much more substantial way,” he said. “And I even believe that one day we will create in this region that which oil and coal created in Europe. The first seeds of regional cooperation will be in this region – tourism, water and energy.”