Why the Chevron acquisition of Israel's Noble Energy is bad for Israel

Don’t drink (gas-infused) Kool-Aid, it's as brilliant as stock-piling ammonium nitrate in Beirut.

Noble Energy’s Leviathan gas field, not far from Caesaria (photo credit: MARC ISRAEL SELLEM)
Noble Energy’s Leviathan gas field, not far from Caesaria
(photo credit: MARC ISRAEL SELLEM)
There are two narratives around Israel’s gas-centric energy policies. The first belongs to Noble Energy and Yitzhak Tshuva: The gas increases Israel’s energy security, is economically good for Israel and will reduce our greenhouse gas emissions and cleans our air. The second is that Chevron’s planned acquisition of Noble Energy – without a public hearing on Chevron’s environmental record – is good for Israel. Not surprisingly, this is also the conventional thinking on conventional energy being championed by Energy Minister Yuval Steinitz.
Steinitz is in a desperate race against time to be the Chevron champion before the above narrative falls apart and, potentially, people in his orbit go to jail.
The Jerusalem Post editor in chief Yaakov Katz drank the minister’s Kool-Aid in a recent article that lacked his usual critical thinking. Katz, a recognized military expert and author of several books on Israel’s security, should be most worried. Israel’s energy security has been betrayed by the gas deal with the inexplicable move of the gas rig from 125 km. out to sea right up to 9.6 km. off the shores below Zichron Ya’acov.
Then-defense minister Moshe (Bogie) Ya’alon, who approved the gas rig, signed off on it to be far from our shores, our people and our desalination plants. We are, after all, in a fault zone and a war zone, and accidents also happen. So when Noble Energy used their political power, without a full public discourse on the matter, to move the rig closer to our population centers in order to save themselves some big money, Ya’alon, who was no longer in government, and others objected for all the obvious security and health reasons.
You can see the hulking rig from our shores – conveniently now within Hezbollah’s missile range. Israel does not have the equipment, personnel or training to handle the poison from the condensates that will affect perhaps a million people when the rig is hit. In an age of daring terrorism and plenty of medium and long-range missiles, what non-corrupt security-minded government would green-light putting nearly all our energy into one easily targetable, explosive basket near our population centers? It’s as brilliant as stock-piling ammonium nitrate in Beirut.
Our energy policy is covered in problems. Today’s global average price for natural gas is about $2 per thousand cubic meters. What government would lock Israeli consumers into paying three times that? Yes, the government-owned Israel Electric Company is paying $6 per thousand cubic meters and passing that cost onto all of us. Steinitz was the finance minister from 2009 to 2013, when he became energy minister – the only minister with job security through all these elections.
The body that granted Noble Energy the gas concession is a secretive unit in the Energy Ministry called the Petroleum Council. There are no public minutes of their meetings, it is impossible to reach its members, their discussions are not open to the public or by Zoom, they don’t publish their schedules in advance, they act as if there is no oversight by the Knesset Interior and Environment Committee and they are the ones already pre-approving the transfer of Noble Energy’s gas assets to oil-giant Chevron without a public hearing on Chevron’s environmental record.
Why should this matter?
On July 22, I watched the energy minister and his director-general, Udi Adiri, lose their temper in the Knesset against the very calm expert testimony of a representative of the Environmental Protection Ministry who was explaining that solar energy is cheaper than natural gas, even with battery storage. Indeed, the first solar-storage bids were awarded in Israel that same month, coming in about 20 agorot per kilowatt hour. According to the Prime Minister’s Office, the true cost to the Israeli economy of natural gas is about 40-45 agorot per kilowatt hour. No wonder the gas minister lost his cool; it exposed his faulty decision-making. Or worse.
Steinitz tried to use his Knesset appearance to justify to a skeptical MK Miki Haimovich, chair of the Internal Affairs and Environment Committee, why Israel should not go beyond 30% renewables by 2030 – meaning, he tried to justify maintaining a 70% gas monopoly. And then, when all his justifications were rebuffed by an energy expert in his own government, he lost it.
That’s when the true picture emerged: no logical economic, environmental or financial argument was going to move the minister to increase the market share of renewables and therefore decrease Noble Energy and its partners’ choking and expensive monopoly on our energy market. It would not be surprising if it was the minister’s guarantee of a long-term sizeable monopoly of our market to Noble that made it an attractive acquisition for Chevron, which has one of the worst environmental records on the planet.
The right answer for Israel’s energy mix by 2030 is 100% daytime solar, which we have already achieved in Eilat and the Arava, and natural gas at night. A 100% solar daytime goal would inject $30 billion into our limping economy and create tens of thousands of much-needed green jobs, in particular in the periphery. I do want to acknowledge, to the minister’s credit, he recently canceled four planned large gas-fired plants in favor of more solar energy because solar power is cheaper than natural gas and doesn’t blow up. But it only highlights the question: why are 10 other gas plants still moving forward, as well as unneeded gas pipelines – NIS 2 billion worth of tax-payer money! – when solar plus storage is cheaper and increases our energy security because it is strategically spread out? No wonder the key Knesset committee overseeing energy and the environment has called for a moratorium on all gas power deals and the cancellation of the law allowing any more gas power plants.
If there is no deal that we do not know of, Steinitz should have no problem backing a goal of 100% daytime renewables by 2030 since solar is one third the price of natural gas and has proven to be reliable base-load energy from our sunny South, where most of the solar fields will be. According to the Environmental Protection Ministry, just enabling nearly universal roof-top solar with battery storage, particularly for multi-family homes, would power more than one third of the country. Then add in the solar fields, which can easily supply the balance to reach 100% daytime equivalent from renewables at cheaper prices than gas. And one of the charms of distributed, clean solar energy is that there is no need for military protection, with tax-payer money, using pricey and potentially ill-gotten German submarines and patrol boats. Readers may note that Case 3000, the submarine deal for which indictments have been handed down, relates to and coincides with the timing of the questionable terms of the gas deal and in
volves several of the same players.
Steinitz, could it be that you promised Chevron great cash-flows from our deliberately over-priced energy bills? In Chevron’s own words: “Noble Energy brings low-capital, cash-generating offshore assets in Israel.” In other words, it’s a cash cow because someone championed the effort to bamboozle the citizens of Israel. Chevron now may have a reporting obligation to its shareholders, who have yet to approve the deal, that they could be exposed if it leaks out that the gas deal stinks.
Yes, you are correct that our air is a bit cleaner when natural gas replaces coal. But it would be much cleaner if 100% of our daytime energy came from the sun. All the other arguments for natural gas – enhancing security, helping our economy and lowering emissions – are false.
The next time an editor or writer chooses to drink the gas-infused Kool-Aid of the energy minister or the fossil fuel industry, remember that, like Beirut, it may be deadly.
The writer, winner of Israel’s Green Globe in the Knesset, was named by CNN as one of the planet’s leading Green Pioneers and awarded Person of the Year by Israel’s National Energy and Business Conference. He can be followed @KaptainSunshine