Where does Israel stand in the battle for energy?

The business of keeping Europe supplied with non-renewable energy has developed into a series of fierce political struggles.

 A photograph taken with a drone of a solar power tower on a solar farm near Kibbutz Ashalim in the Negev desert on October 23. (photo credit: ILAN ROSENBERG/REUTERS)
A photograph taken with a drone of a solar power tower on a solar farm near Kibbutz Ashalim in the Negev desert on October 23.

“The times they are a-changing” sang Bob Dylan back in 1964. The truth is, they have never stopped. More than half a century later, humanity’s attention has merely shifted from universal love and flower power to how to halt climate change in an earth heading toward its apocalypse. A sustained global effort to cut carbon emissions substantially, and soon, is today’s top priority. Most scientific opinion holds that excessive carbon emissions – so-called greenhouse gases – are the source of changes in the world’s weather patterns affecting the whole globe.

From October 31 until November 12 the UK hosted the 26th UN Climate Change Conference of the Parties (COP26) in Glasgow, Scotland. There was a huge turnout of world leaders, including Israel’s prime minister, Naftali Bennett, and Israel’s delegation was the second largest in size after that of the US.

The COP26 agenda was aimed at accelerating cooperative action towards meeting, and if possible improving on, the targets set in the Paris Agreement of 2015. Their central aim is to stop the global temperature from rising to 2 degrees Celsius above pre-industrial levels, but if possible to limit any increase permanently at 1.5 degrees Celsius. No less than 189 countries have pledged to reduce their carbon emissions in a bid to do so. According to the latest Intergovernmental Panel on Climate Change (IPCC) Report, released in August 2021, the rise so far recorded, at 1.2 degrees Celsius, has been responsible for changes in the Earth’s climate in every region and across the whole climate system.

The 18-year-old Swedish environmental activist Greta Thunberg, known for challenging world leaders to take immediate action for climate change, has no high hopes for COP26.

 Swedish activist Greta Thunberg speaks at Festival Park as the UN Climate Change Conference takes place in Glasgow on November 1. (credit: RUSSELL CHEYNE/REUTERS) Swedish activist Greta Thunberg speaks at Festival Park as the UN Climate Change Conference takes place in Glasgow on November 1. (credit: RUSSELL CHEYNE/REUTERS)

“This COP will not lead to any big changes,” she said recently. “We’re going to have to continue pushing.” In another interview she said: “They’ve now had 30 years of blah, blah, blah and where has that led us? We can still turn this around – it is entirely possible. It will take immediate, drastic annual emission reductions. But not if things go on like today. Our leaders’ intentional lack of action is a betrayal toward all present and future generations.”

Those like Thunberg advocating drastic action before it is too late see the issue as a battle between the continued extraction and use of fossil fuels, which inevitably result in carbon emissions, and the need rapidly to expand the development and use of renewable sources of power – the sun, the wind, the tides.

Israel, along with a fair number of other countries, is in the equivocal position of having a foot in both camps. The fairly recent discovery of vast reserves of liquid natural gas (LNG) in its territorial waters brings Israel into the select company of the world’s major suppliers of fossil fuels. But Israel is also a pioneer in the high-tech development of renewable energy sources such as solar-thermal and mini-hydraulic systems, in addition to the more usual photovoltaic energy – the direct transformation of solar radiation into electricity. There are other renewable energy sources in development, such as biomass and biogas.

The drive towards minimizing carbon emissions is indeed vital. 40 countries, including the US and the UK, have pledged to reduce their carbon emissions to zero by 2050. Bennett pledged that Israel would match them. 

The whole global response to the crisis is regarded by convinced eco-warriors like Thunberg as too little and too late, but politicians in general believe that while working towards their agreed carbon emission reductions, the world has to continue functioning or revert to a pre-industrial dark age. And in this interim period there is no doubt that natural gas, a cleaner form of fossil fuel than oil or coal, will seize a bigger share in the global energy mix.

One battle is between Europe’s main provider, Russia’s Gazprom, and its customers. Russia is seeking to exploit its near-monopoly position by using restricted supplies as a lever to gain approval for its yet-to-be-completed Nord Stream 2 pipeline. Another struggle centers on the pipelines competing to reach European markets from the newer Mediterranean sources of LNG. In this tug-of-war Israel and its partners Greece, Cyprus and Italy, with their ambitious EastMed pipeline project, are in competition with the Turko-Russian pipeline project in southern Europe, TurkStream.

TurkStream is already up and running, while EastMed awaits its final go-ahead from the EU, not expected before 2022. Turkstream has a throughput capacity of 31.5 billion cubic meters (Bcm) per year, and mainly serves the Balkans. When constructed, the EastMed pipeline would carry 20 Bcm of Israeli gas a year, meeting 10% of European demand, with Italy the largest single customer. The EastMed undersea pipeline, running for 1,900 km (1,180 miles) from the Israeli and Cypriot offshore gas fields via Greece to Italy, would replace Nord Stream as the world’s longest.

The Middle East Institute (MEI) recently pointed out that the EastMed project, although financially backed by the EU, has its skeptics who question both the $7 billion price tag (funded by the EUs Connecting Europe Facility), and the logic of a major gas transport project to Europe at a time when decarbonization is the new priority. According to MEI there are other, lower-cost projects under consideration that could be brought forward to promote regional integration such as developing the pipelines that already link key regional markets like Israel to Egypt, or Egypt and Israel to Jordan.

The Trump administration approved of the EastMed project, and Washington has reiterated its support. As a matter of principle, the US deplores Europe’s growing dependence on Russian gas, which currently supplies 40% of the continent’s needs. It has done its best to delay the completion of the Nord Stream 2 pipeline into Germany, and also imposed sanctions on TurkStream.

The effort in the EU and the UK to expand renewable sources of energy and gradually replace fossil fuels continues apace, but in the meanwhile both are facing an energy crisis. Over the past few months gas supplies have been restricted and prices have soared. Russia reduced flows to European gas storage earlier this year, blaming increased domestic demand. A more pressing political factor is probably Russia’s keenness to see Germany approve Nord Stream 2, the controversial gas pipeline that is 90 percent complete and seeks to cut Russia’s dependence on Ukraine for energy transit to Europe. The EU is divided on the issue, with Germany, Austria, and the Netherlands approving Nord Stream 2, while France and other countries argue that it should be abandoned.

Russian President Vladimir Putin has tried to point out the moral. “Tensions on the European market would have calmed down,” he said recently, “and prices would have fallen, if we were able to boost supplies on this [Nord Stream 2] route.”

The energy situation in continental Europe and the UK is grim. The shortage of supply means that gas intended for domestic and industrial use is some five times more expensive than a year ago. Consumers in the UK are being shielded from any price increase until after Christmas, but prices will soar in the New Year. Moreover, should the weather prove even marginally colder than usual, increased demand may lead to an acute energy crisis. To compound the problem, the cost of vehicle gas (petrol in UK terms) has reached its highest level at the pumps since 2012.

Gas is often seen by the energy industry as a medium-term “bridging fuel”, spanning the period between the decline of hydrocarbons and the flourishing of renewables. This transition has had the effect of pushing up demand for gas at a time when Europe’s domestic gas supplies are in decline. Israel’s vast LNG reserves may be coming on line at precisely the most opportune moment – and the EastMed pipeline may not be the only way to supply it.

A recent article in the Financial Times pointed out that while the gas industry used to operate almost entirely on point-to-point pipelines, the rapid growth of the LNG industry means that seaborne cargoes have now created something akin to a global market, similar to oil. Europe has more LNG import capacity than any other region. The UK for example, alongside pipeline flows from Norway and the EU to offset declines in domestic production, imported almost 20% of its gas in 2019 through LNG shipments.

It is on the cards that in the near future Israeli LNG could be finding its way to European and UK markets via giant tankers.