Peretz vows to bring gas exports to Knesset

Environmental protection minister says decision on nation’s natural gas export must involve a wide range of political voices.

May 30, 2013 01:50
4 minute read.
Protesters in Ramat Gan near Minister Shalom's residence protesting gas exports, May 25, 2013

natural gas protest370. (photo credit: Courtesy, Scoutti, Ori Hait )

The decision on how much of the nation’s natural gas will be allocated for export must be taken within the halls of the Knesset and involve a wide range of political voices, Environmental Protection Minister Amir Peretz said on Wednesday.

“This is a decision that has multi-generational influence, for which a discussion should be as widespread as possible and involve representatives of all Israeli politicians and not only those who are ministers,” Peretz said, at the Environment of Tomorrow conference in Tel Aviv, hosted by TheMarker and the Paris-based Veolia Environnement SA.

Export allowances for Israel’s natural gas have become an ongoing topic of contention among politicians, explorers and environmentalists.

Gas from the 282-billion cubic meter offshore Tamar reservoir is already flowing to Ashdod, and its neighboring 535 Leviathan basin is supposed to come online within a few years.

While the Zemach Committee – headed by Energy and Water Ministry directorgeneral Shaul Zemach – last fall recommended a maximum export allocation of 500, or 53 percent, of the total gas, the government has not approved an export policy. The committee also called to keep at least 450 at home to ensure a 25- to 30-year supply, but has come under criticism from environmentalists who say that much more of the resource is needed domestically.

Last week, Energy and Water Minister Silvan Shalom announced his intention to make public all of the protocols of the Zemach Committee to “increase transparency in public discourse before advancing the committee’s conclusions.”

He said he intended to set the maximum export allocation at 40% rather than the expected 53% figure.

“To protect the needs of the citizens of Israel, we demand that Israeli market will be allotted at least 600 of natural gas,” Peretz said. This would allow the country to significantly expand the scope of natural gas being used in the transportation sector, rather than using more polluting fossil fuels. The 40 the Zemach Committee assigned to the transportation sector is insufficient, Peretz stressed.

“The committee must continue to ensure the profit of Israeli citizens from natural resources, and there is no reason that the State of Israel should apologize for demanding what it deserves,” he said.

While the Environmental Protection Ministry and green groups have been arguing for a more conservative export policy, energy officials and exploration stakeholders contend that strong, stable export standards will only have a positive effect upon Israel – by encouraging more drilling firms to enter the market and find more gas.

Miki Korner, the founder and CEO of the M. Korner oil and energy consultancy group, said that the Zemach Committee started out doing “a good job” but ended up with export allocation figures that were too conservative. Korner, who was formerly chief economist and engineer at Israel’s Natural Gas Authority, participated as an adviser during the drafting of the Zemach Committee report.

“The issue is on the table for at least four years now, since I started dealing with it, and it’s enough time to decide,” he told The Jerusalem Post on Wednesday.

Although he attended and planned to speak at a May 13 Knesset Economic Affairs Committee meeting that discussed the export issue, Korner said he chose not to speak due to what he felt was a virulently one-sided atmosphere in the room. He cited MK Tamar Zandberg (Meretz)’s constant interruptions of several of the people who testified there.

Independent international consultancy firms had recommended to the Zemach Committee an export policy of about 80 to 85% to avoid a gas exploration slump such as those that occurred in countries like Bangladesh, Egypt and Trinidad and Tobago, Korner explained.

An unstable, insufficient export policy “stops the industry,” he said, adding that “once you stop the industry you have no more discoveries.”

If anything, Korner explained, 450

reserve of domestic gas for the next 30 years is way too high, as even conservative projections predicted needs of less than half that.

Since 2004, Israeli energy consumption has gone down 35%, predominantly due to increased regulation and the cost of labor and land, which have driven many industries to outsource in China and India, he said.

Countering environmentalist claims that the petrochemical industry will require large amounts of natural gas, Korner stressed that this industry will never thrive in Israel because it is one that generates a lot of pollution. As for transportation, the need for methanol will be very low – only about 400 per year – as methanol production is not economic, according to Korner. Compressed natural gas (CNG), meanwhile, may become an important tool for public transportation, but it will not be economical for private car use anytime soon, he continued.

“The use of buses and even small amounts of trucks is negligible in the macrosize,” he said. “Natural gas in cheap amounts exists in Holland, Russia and Mexico.

CNG did not catch on because it’s not profitable.”

Accusing politicians of “playing around with numbers” that do not jive with reality, Korner added, “If you play around with the numbers, you get a result that is bad for everybody.”

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