Pipeline failure for Tamar gas field to cause hiccup in electricity rates

Critics of Israel's natural gas system have contended that the current reliance on one source is a national security risk.

Israel's natural gas (photo credit: MINISTRY OF NATIONAL INFRASTRUCTURES)
Israel's natural gas
Electricity customers will see a temporary increase in their bills after a cracked rig in Israel’s main offshore gas field crippled the supply of natural gas, forcing the country’s power plants to rely on more expensive fuels.
“Due to a malfunction discovered during pre-planned maintenance work in the Tamar gas field, the supply of natural gas from the site has completely ceased,” the Energy Ministry said in a statement on Friday, adding that the gas pipeline would be repaired within a week.
No polluted gas leaked into the sea because of the pipeline crack, an Energy Ministry spokeswoman told The Jerusalem Post.
While the energy field is inoperable, Israeli power plants will be forced to run on diesel, coal and fuel-oil, which are more expensive and more polluting.
Those supplies are kept in an emergency reserve.
The Tamar field supplies around 65% of Israel’s energy needs, according to energy consultant Amit Mor, who said the days-long shutdown presents a number of national security and environmental challenges, along with a likely hit to the local economy.
“Of course, electricity prices will need to increase in order to pay for the additional cost of the alternative fuels,” said Mor, adding that bills likely wouldn’t be more than 5% higher because the cut-off likely will last a few days at most.
If the natural gas supply were shut off for an entire year, electric bills could skyrocket and nearly double. Such a scenario is unlikely, but possible if a terrorist organization like Hezbollah manages to strike and cripple the offshore rig and pipeline long term.
The gas processing rig is located some 24 kilometers off the coast of Ashkelon, and the fault was found during scheduled maintenance held over Rosh Hashana, planned for then due to a decrease in energy demand. The Israel Electric Corporation had prepared for a 50% decrease in natural gas supplies, not a total cut-off.
“Once they began this maintenance, they discovered that they had to pump out all the gas in the pipeline. But then they discovered a leak in the pipeline… so they had to shut all of the flow of gas to the market in order to repair the leak.
Because they do not have the [repair] equipment in Israel, they had to bring it in from Houston over the weekend,” said Mor.
Technicians from Noble Energy, the US company that runs the Tamar field, had to be flown in from the States to make the repairs.
Tamar, which began operations in 2013, is the only natural gas supply for Israel, so far producing some 1 trillion cubic feet. The current pipeline failure is the site’s first major technical fault.
Israel had planned on connecting the Leviathan gas field by 2016, but the project was delayed due to antitrust and monopoly concerns. Leviathan now is expected to be connected by 2019 and an additional gas field, Karish, should be up by 2021. Until then, Tamar is the only supply for the Israeli market.
“This technical fault just demonstrates the vulnerability of the Israeli energy market to one gas supply source, the Tamar field, and the full dependence on one pipeline,” Mor said, calling it “a national security danger.”
A prolonged shutdown could affect wide sectors of the Israeli economy as an increase in energy prices would hit consumers in their pocketbook.
“If in the future and until alternative sources of gas like Leviathan are connected to the grid, such cut-offs for long durations are going to have an economic impact in the form of increased electricity prices,” said Mor.
Opposition politicians blamed Prime Minister Benjamin Netanyahu’s contractual negotiations over the natural gas reserves for the lack of multiple energy supplies.
“When it comes to natural gas, it is impossible to rely on the government or on the credibility of its reports about the problem,” said Labor Party head Avi Gabbay.
“Redundancy is important… there should be another pipe from the reservoir,” he said.