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Cabinet appoints high-level committee to rule on future of Haifa Bay area

Panel has three months to publish findings that will focus on future of petrochemical and heavy industries that pollute but also create jobs

Sue Surkes is The Times of Israel's environment reporter.

View of the oil refineries in Haifa Bay, May 5, 2017.  (Yaniv Nadav/Flash90)
View of the oil refineries in Haifa Bay, May 5, 2017. (Yaniv Nadav/Flash90)

The cabinet on Sunday appointed a committee of top officials to examine the future of Haifa Bay, long home to some of the country’s worst polluting petrochemicals and heavy industries.

The move was pushed by Environmental Protection Minister Gila Gamliel, with the support of Prime Minister Benjamin Netanyahu, and is expected to have far-reaching consequences for the development of the metropolitan area surrounding Haifa and for Israel’s future energy policy.

The committee will look at the future of the northern area in general and of its heavy industry in particular, publishing the main points of its report for public comment before submitting a final version to the government. It has 90 days to report back.

According to an Environment Ministry statement, the committee will examine issues including the pollution effects of the heavy industries, the employment and investment needs of the region, and housing and urban development. It will also examine Israel’s energy infrastructure.

Environmental Protection Minister Gila Gamliel and Carmel Beach Regional Council head Asaf Izak (right) receive guidance on a drill for a potential oil leak from the Leviathan natural gas platform off Israel’s northern Mediterranean coast, September 6, 2020. (Danny Shlomi, EcoOcean)

Headed by a representative of the Prime Minister’s Office, it will include the directors general of the PMO, the Ministries of Environmental Protection, Energy, Economy and Industry, Interior and Defence, the head of the Finance Ministry’s Budgets Department, the heads of the National Security Council, National Economics Council, Israel Lands Authority and National Planning Council and the Attorney General.

Faced with significant air pollution and above-average incidences of cancer and respiratory disease, Haifa residents and environmental activists have been campaigning for years to shut the petrochemical industry down.

In a watershed move for them, Avi Simhon, the head of the National Economic Council which advises the Prime Minister, announced in June that the Bazan oil refineries that have largely defined Haifa’s skyline, had to be shut down within five years and replaced with a modern, green high-tech and residential hub.

Bazan — one of whose iconic former cooling towers collapsed in June — occupies 526 acres (2,130 dunams) in Haifa Bay, close to the most heavily populated areas of northern Israel. Its refinery imports crude oil to make a range of refined products for industry, transport and agriculture, 40 percent of which are then exported. Subsidiaries make products ranging from bitumen for road surfaces to waxes, oils, lubricants and polymers.

View of the former cooling towers at the Bazan Group oil refinery complex on June 12, 2020, hours after one of them collapsed. (Meir Vaknin/Flash90)

The international management consultancy McKinsey was brought in two years ago by the National Economic Council as part of inter-ministerial discussions on the future of the Bazan Group’s companies.

It found that relocating Bazan would represent a poor return on investment.

Total shutdown, by contrast, would both reduce emissions — according to the Environmental Protection Ministry, Bazan is responsible for 25-30% of the main air pollutants in Haifa Bay — and release land, valued at NIS 7 billion to 20 billion ($2 to $5.8 billion), depending on how much would be built. Construction of 75,000 to 175,000 residential units, for example, would be worth NIS 13.1 billion ($3.8 billion). Costs of rehabilitating toxic soil would have to be added.

These figures did not take account of the increase in value of existing real estate in Haifa, nor the benefits of reduced emissions or accelerated metropolitan development. “These difficult-to-quantify benefits may increase the value of a potential shutdown,” the report said.

Amid a growing consensus that the city’s polluting factories should be shut down or moved out of Haifa, a public relations campaign was launched this summer to hit back.

Under the slogan, “Without industry, there is no Haifa,” which rhymes in Hebrew, and with the hashtag, “The Truth about Haifa,” the campaign on Facebook and Twitter charged that “industry is greener.”

Bazan alone employs some 5,000 people.

View of a blaze at the Bazan Group A gasoline tank caught fire at the Haifa oil refinery on December 25, 2016. (Israel Police)

In June, the Haifa Magistrate’s Court slapped an NIS 1.2 million ($335,000) fine on Bazan Group for negligence, pollution and violation of permits in connection with a massive fire that sent toxic black clouds floating over the Haifa Bay for several hours in late December 2016.

Bazan is owned by the Ofer family’s holding company, Israel Chemicals Limited.

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