If Egypt were to decide to cut off the supply of natural gas to Israel in the
near future, the country would be adequately prepared to survive on its own
energy resources – although not necessarily without reverting to an increase in
fossil fuel consumption, according to regional experts.
In 2010, 36
percent of Israel’s power generation supply was fueled by natural gas, 62% by
coal, 2% by oil and only 0.1% by renewables, said Dr. Amit Mor, CEO and energy
specialist at the Eco Energy consulting firm. Of the 5.1 billion cubic meters of
natural gas, approximately two-fifths came from the Egyptian East Mediterranean
Gas (EMG) pipeline, with the rest coming from Israel’s own depleting Mari-B
field, off the coast of Ashkelon.
Mor estimates that by the end of the
decade, Israel’s total annual demand for natural gas will reach 10 billion cubic
“The shift from coal and oil to natural gas by the Israel
Electric Corporation is the fastest in the world – from zero in 2004 to 36%
today,” Mor said.“According to our forecast at Eco Energy, we are going to be at
around 70% natural gas in power generation by 2020, nine years from now, which
is no time. This is the fastest shift or transit to natural gas.”
with this shift comes a perpetual need to increase the supply, a process that
would likely be disrupted if Egypt shuts the pipeline to Israel, as it could
take time for the Tamar field off the coast of Haifa to come online after the
depletion of the Mari-B field, Mor and other experts said.
Egyptian] gas is cut off tomorrow, you’re talking about a year and threequarters
supply [left in Mari-B],” said Dr.
David Wurmser, founder of the Delphi
Global Analysis Group and a consultant to Israel’s offshore drilling teams, as
well as a former senior adviser on the Middle East to then-US vice president
“The timeline gets very narrow if the gas is cut off
There are differing estimates as to when the Tamar field will be
ready for use, ranging from the middle of 2012 to the beginning of 2013,
according to Prof. Brenda Shaffer, an expert on energy policy and management at
the University of Haifa, who added that “probably no one really knows exactly.”
If Tamar is online by the early end of that range, the country might avoid a
potential lapse, she said.
“Tamar was discovered in January 2009, and we
wasted a lot of time because Israel is focused on the prices and the taxes – no
one has really pushed fast enough to get Tamar developed,” Shaffer continued.
“Now things seem full steam ahead, but we did lose a lot of time.”
alone holds enough gas to supply the country for at least 10 to 12 years –
depending on the rate at which it is consumed, which is likely to increase. With
the eventual addition of the neighboring Leviathan gas field, Israel could have
up to 30 to 50 years’ worth, according to Shaffer.
“The problem is the
short-term,” she said.
But even if Egypt turns off the natural gas supply
and there is a gap between Mari-B’s closing and Tamar’s opening, Israel will by
no means experience a blackout – it may just have to increase consumption of
less desirable energy sources.
“If there is a disruption we have other
means to produce power,” Shaffer said. “No one noticed power disruptions in the
last month and a half. I think that’s an amazing feat of the IEC.... They have
the backup system.”
That backup system uses mostly coal and
“If Egypt stops the flow, Israel can survive nicely without Egyptian
gas in the short-term until Tamar will come on board,” Mor agreed. “Although
much more costly and more polluting, the power stations can run on diesel oil
and heavy fuel oil.”
These sources, plus coal, were key during the March
weekend when the Mari-B field shut down due to a malfunction, overlapping with
the five-week stretch in which the Egyptian pipeline was inoperative following a
terrorist attack, according to Shaffer.
“All those things kicked in with
no electricity disruption,” she said. “The problem is that it’s more expensive
and produces pollution.”
One solution to a supply gap aside from
reverting to fossil fuels would be to quickly develop the country’s small
natural gas fields – such as Noa, in Israeli territory near Mari-B, or Gaza
Marine, which would need to be done in conjunction with the Palestinians, as
“pollution knows no borders,” Shaffer said. The government would need to “move
fairly aggressively” to develop Noa, according to Wurmser, who doesn’t see such
a move as likely.
Another option would be importing liquefied natural gas
(LNG) from a Norwegian or American company, all three experts
“It’s very expensive and has only been tried in a couple
places in the world, but it would give an option of using natural gas and keep
Israel from being vulnerable to Egypt,” Shaffer said.
Mor estimated that
it would take less than two years to install a floating regasification and
storage unit, which would be anchored offshore and connected to the grid via a
pipeline. This semi-permanent unit, whose gas supply would be replenished
constantly by tankers, would require about $200 million to construct, but would
be “another means to increase Israel’s energy security,” even when Tamar is up
and running, Mor said.
A system like Tamar, which will be 90 kilometers
offshore from Haifa with a 150-kilometer pipeline to Mari-B, would not be
invulnerable to mechanical faults or security threats, both Mor and Wurmser
agreed, and an LNG addition would therefore provide a clean “insurance policy,”
according to Mor.
The experts disagreed, however, over whether Egypt was
likely to actually turn off the nozzle.
“I personally think that the
Egyptians have all high motivation to continue to supply the gas for
geopolitical, technical and commercial reasons,” Mor said. “If they stop
supplying gas to Israel they will give up an income of about $1 billion a year,
which is significant to Egypt.”
In comparison, he cited the Suez Canal as
bringing in $2-3 billion annually.
“Having said that, the political risk
continues to prevail and has even increased following the revolution,” Mor
Wurmser sees the situation with Egypt as decisively
“As far as the potential for the Egyptian cutoff goes, I would not
look at current statements from the government as definitive. I would look at
current trends – and that is that the gas supply is in danger,” he said.“I think
the Israeli government needs to think broadly about how to develop the entire
basin, not just field by field.”
Yet if Egypt continues to supply Israel,
the experts are hardly unanimous about whether Jerusalem should continue to
purchase gas from Cairo once Tamar is fully functioning.
absolutely no sense that Israel would continue importing natural gas from
Egypt,” Shaffer said. “It doesn’t make sense in terms of economics or supply
security. In the big picture, with Leviathan and Tamar, Israel can supply itself
with natural gas for 30-50 years.”
Mor, on the other hand, views
Leviathan as a potential source for export to the Far East, while he sees the
Egyptian gas supply as “very important to Israel” due to domestic
“It will enable competition in the market between the Egyptian
supply and Tamar,” he said.“If Egypt halts the flow of gas, it will increase the
monopolistic power of Tamar as a major supplier, thus [contributing to the rise]
of the gas price in Israel, which means a faster increase in the price of
electricity, since gas is a major source of electricity. For economic reasons,
it is important for Israel to have diverse sources of supply.”
now, as we stand on the brink of an uncertain future regarding Egyptian gas, the
experts say that if the supply is cut off, Israel would emerge not entirely
unscathed, but also not in dire straits.
“If, let’s say, tomorrow
Egyptian gas stopped flowing, it wouldn’t be nice, but Israel’s electricity
production would not be affected significantly – just the consumers would pay
more for electricity,” Mor said.
“The last crisis
showed that the electric system was set up in a proper way, that we can weather
these problems – it seems like a high priority to the Ministry of
Infrastructures,” she said.“I’m glad to see that the government recognizes the
important benefits of natural gas consumption and doesn’t look for the quick fix
of oil and coal.”