Israel must retain at least 400 billion cubic meters (bcm) of its offshore
natural gas reserves for domestic use between now and 2017, and producers can
export the surplus, the government-appointed Zemach Committee recommended in its
preliminary report Thursday.
New limits should then be set each year
until 2042, in accordance with the Energy and Water Ministry’s demand forecasts,
the committee said. It estimated that Israel would need between 420- 540bcm of
natural gas until 2040, most of it for electricity production and the remainder
for industry and transportation.
The committee determined that fields
containing more than 200 bcm (7 trillion cubic feet) of natural gas will supply
at least half of their reserves to the domestic market. Fields containing 100-
200bcm will supply at least 40 percent, and fields containing 50-100 bcm will
supply at least 25%. Furthermore, natural gas developers will be required to
safeguard an additional 15% of reserves as protection.
largest offshore fields, Tamar and Leviathan, contain an estimated 250bcm and
450 bcm of natural gas, respectively. It is expected that gas will begin flowing
from Tamar in 2013 and from Leviathan in 2017.
Delek Drilling and Avner
Oil Exploration, which hold a 15.625% each in the Tamar prospect and a 22.67%
share each in the Leviathan prospect, reacted negatively to the
In a joint statement, they stated: “Exportation is a key
condition for the continued development of Israeli energy.
The amount of
gas allocated to exports must be expanded in order to strike the right balance
between Israel’s energy independence and hidden economic and geo-political
benefits of gas exportation.”
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In response to the report, Environmental
Protection Ministry Dir-General Alona Shefer-Karo sent a letter to the committee
members, detailing her ministry’s criticisms of its stipulations.
committee’s evaluation of domestic natural gas demand was too low, and should
have been closer to a figure like 550 bcm, according to Shefer-Karo’s
assessment. In the category of transportation, the committee assumed that in
2040, more than half of Israel’s vehicles will continue to be driven on petrol
and diesel, and only one-third on natural gas – with the remaining being
“Given that vehicles powered with refined petroleum
are the main cause of air pollution in city centers, and in light of government
policies to promote transportation alternatives to oil, the base scenario is far
from reflecting the desired future for Israel’s transportation system,”
In addition to assuming that most private cars and all
public transportation vehicles will be running on natural gas by then, the
committee should also take into account that many household needs might require
natural gas, she added.
With a higher projected demand, the supply
allocations to the local market also must be significantly higher, according to
The ministry also objected to the domestic delivery
obligation amount for large-sized fields, and felt that the numbers should be
more incremental than a simple 50% requirement for fields with 200 bcm, and
With this low requirement, the largest fields, like Leviathan,
would be able to stockpile huge amounts of gas for export, thereby reducing
incentives for exploration and export in smaller fields, Shefer-Karo
Instead, she argued, fields over 400bcm should be required to
preserve 80% of their supplies for local use; those between 300-400 bcm should
preserve 70%; those between 200-300 bcm, 60%; those between 100-200bcm, 50%,
those between 50-100bcm, 40%; and those under 50bcm, 30% for local
As far as exports go, the ministry also disapproved any LNG
facility establishment without a thorough investigation of all environmental
implications – such as those on beaches and landscapes.
although acknowledging that the report prioritized Israeli consumers for natural
gas purposes, the ministry said that the details were “vague and insufficient”
as to exactly how this prioritization would be accomplished.
if the government must require natural gas suppliers to provide the local market
with more than the amount allotted for this sector (during a natural gas
shortage, for example), the suppliers should only receive normal market prices
without additional federal compensation, Shefer-Karo stressed.
Chairman Shaul Zemach and his team will accept public submissions until May 6,
and will submit their final report to the government on June 7.
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