Tooling up to cope and to flourish

National Infrastructure, Energy and Water Minister Yuval Steinitz maps out economic and security opportunities and challenges.

Yuval Steinitz (photo credit: MARC ISRAEL SELLEM/THE JERUSALEM POST)
Yuval Steinitz
Just as a natural gas sector frozen by 10 months of bureaucratic battles and political disagreements began to thaw, The Jerusalem Post sat down with National Infrastructure, Energy and Water Minister Yuval Steinitz to discuss the country’s energy outlook as well as its security challenges. As the country continues to face terror threats internally and hostilities in the greater Middle Eastern neighborhood, the minister stressed the importance of overcoming internal political squabbles in favor of productive collaboration.
When the former antitrust commissioner announced his intention last December to consider whether natural gas companies Noble Energy and the Delek Group constituted a restrictive arrangement, government officials launched months of negotiations that ultimately resulted in a compromise outline for the sector. Making its way through a series of in-house political battles, that framework has undergone several iterations.
What were some of the greatest challenges encountered while putting together a natural gas framework?
It was not easy, after years of unnecessary delays, to [reach] a uniform government approach. Obviously, this was the most difficult task – not to agree with private sector companies, but to agree with all the government departments and regulators. We had to put all of them at one table, and it took a full month until we could hammer out a unified government policy.
Then it was easier to come to terms with Delek and Noble.
How have the delays in the large Leviathan gas reservoir’s development impacted Israel’s economy internally?
It’s very difficult to quantify, but if you take into account the overall revenues, in today’s prices, in the next few decades, Leviathan and [smaller reservoirs] Karish and Tanin are supposed to be worth about NIS 300-350 billion. With every year of delay, we lose approximately NIS 2b., and this does not include other losses, like lack of energy security.
In any case, we know that the Israeli economy – this is no secret – has been slowing down in the last year or year-and-a-half. The most effective countermeasure, the most effective and immediate growth engine, is the gas framework. Once this is finally in place, once this is activated, we expect NIS 80b. or more of direct investments in the Israeli economy in the coming four years.
How can Israel continue to attract international companies to explore here in the shadow of all the recent delays that have occurred?
One of the benefits of the outline is that the government has achieved – has committed to for at least 10 years – a stability clause that will reassure gas and oil companies, energy companies from around the world, that we have stabilized the system and that we are not going to change it anew every week.
How have the delays in Leviathan’s development impacted potential export deals? Are you still confident that the letters of intent signed with Jordan and Egypt will advance, particularly following the discovery of the large Zohr field off the coast of Egypt?
If you want to justify the very big investments in Leviathan, in Karish and Tanin, you have to export.
I think that the discovery of Zohr does not really change the outlook now because Egypt is already consuming around 55 annually, and according to the Egyptian projections, they are going to need almost 100 b.
cu.m. five years from now. Zohr cannot supply even 20% of this amount.
So they will need to import gas – unless we wait and wait until additional discoveries occur that will satisfy the Egyptian market.
What are some of the best long-term export options in your opinion?
It depends also on how much gas we are going to discover. I have two important missions – one is to bring about the development of Leviathan and Karish and Tanin – the already- existing gas fields. The [second] is to attract other global gas companies besides Noble Energy to come here not only to develop Karish and Tanin, but also, not less importantly, to continue to explore our economic waters with the hope of discovering additional gas fields.
Which export route might be optimal?
We are considering everything.
Egypt is still an enormous market – their needs are immense. Turkey also presents some future potential. Turkey itself is very big, and their economy is growing. Both through Egyptian LNG facilities and through Turkish gas pipes, there is also the possibility of exporting to Europe.
If we find enough additional gas fields in the Mediterranean in Israel or in Cyprus or in Egypt, if this is really significant, it might justify even a direct pipeline going through Cyprus to Greece and to Europe. This depends on the amount of gas. It’s an expensive project, but if you discover another four or five Leviathans or Zohrs in the eastern Mediterranean basin, then it might be justified.
Turning to the renewable energy sector, the Israeli government recently approved a new target to increase such sources to 17% of the country’s electricity mix by 2030, as opposed to only 2% today. In addition, the targets call for an overall reduction of electricity consumption by 17%. What specific steps are being taken to achieve these goals?
We want to see more solar energy, and we want to see more energy efficiency.
We will need a real effort in order to achieve all of this. I just concluded in a meeting with US Secretary of Energy Dr. [Ernest] Moniz that we will also significantly increase and promote R&D on energy efficiency, on renewable energies, on cyber security for power stations and other energy facilities.
Switching gears entirely and looking at the terror activity that Israelis face at home, last term you spoke extensively about Palestinian incitement. Do you feel that such incitement has contributed to the current flare-up?
It’s all about incitement this time. This is very clear. Take a 13-year-old boy, or even a 15-year-old, who raises a knife and decides to kill a Jewish boy of almost the same age. He’s doing it only because he was indoctrinated and incited from a young age, not because he considers the overall political situation. From childhood, that’s what he heard – that Jews should be killed, exterminated, that Jews are horrible creatures, that they should get rid of the Jews. Unfortunately, those are the basic messages propagated in the Palestinian education system and in the Palestinian government- controlled media.
Most of the attacks are spontaneous, most are carried out by individuals – young individuals – and not meticulously prepared by some terrorist organization.
This only underscores the level of hateful incitement. Also, maybe, some inspiration from ISIS – the idea of using knives to cut the heads and the throats of the enemies of Islam, the enemies of al-Aksa Mosque.
So what can be done?
There is no complete solution. We have been struggling against terrorism for almost 100 years now. This kind of terrorism, even knife terrorism, started 90 years ago, when the grand mufti of Jerusalem – now the worldwide famous grand mufti – told Muslims that the Jews planned to destroy al-Aksa Mosque, and that they had to defend the mosque.
So this is not new, this kind of incitement and hatred. But what is so sad and disappointing is that Abu Mazen [Mahmoud Abbas] and the Palestinian Authority are repeating those same false messages almost 100 years later, and people are responding emotionally to them as if they learn nothing from history.
As far as Israel’s internal politics are concerned, do you think opposition leader Isaac Herzog (Labor) might still end up joining the coalition?
I hope so; I think that this is necessary, is very important. I think that it’s not good for Israel to have such a narrow government or such a narrow coalition. I think we have to stand together and fight together on several fronts – one is security of course.
Also important is the economic front.
The economy is slowing down, and we have to stand together and strengthen it. I always favor a national unity government, especially in the current situation.
To tell you what the chances of a unity government are, I don’t know. It’s politics. And sometimes instead of doing the right thing, we are pushed or restricted by the more extremist forces in our parties, or the public.
I hope personally that Herzog will be courageous and will do the right thing, even if he has to struggle with some members within his own party.
In the aftermath of the Iran deal, what are some of your thoughts going forward?
The Iran deal is over. Our main mission now is not to continue to criticize it, but to make sure that what was achieved – and we are very unsatisfied with the agreement – will be strictly fulfilled by the Iranians.
Therefore, we have to increase our intelligence cooperation with our partners, especially with the US. Of course we are concerned with the outcome.
Since the agreement was achieved, we see greater Iranian involvement in Syria, and an Iranian attempt to create another terror front vis-à-vis Israel in the Golan Heights. This might be one of the results of the agreement, that the Iranians feel that they have more freedom to maneuver and also more resources to support themselves and their allies.
The other very negative element is the Imad missile test. Iranian missiles have already had the range to strike Israel for 10 years now, maybe more. But the Imad missile has special characteristics that make it clear that this missile is designed also for nuclear weapons, especially its warhead maneuvering capacity. This no doubt increases the immediate security onus on Israel.
We will have to prepare ourselves to cope with all of these developments.
The Jerusalem Post Diplomatic Conference, a prestigious forum where some 400 ambassadors, ambassadorial spokespeople and military attachés from around the world will convene, takes place at the Waldorf, Astoria Hotel in Jerusalem on Wednesday, November 18. The conference, featuring an array of speeches from Israeli newsmakers, including Prime Minister Benjamin Netanyahu, will be broadcast live on