The Energy Ministry forecast Tuesday that within 12 years Israel would be fully reliant on natural gas and alternative fuels for the production of electricity and for transportation.
“We intend to reach a situation in which Israel’s industry will be based on natural gas, and most importantly, transportation in Israel will be based on natural gas or electricity,” Energy Minister Yuval Steinitz said at an energy conference in Tel Aviv. “From 2030 onwards, the State of Israel will create alternatives and will no longer allow the import of cars that run on gasoline and diesel fuel.”
Steinitz said he would be submitting a master plan with this vision to the government.
In 2014, electricity was produced through a fifty-fifty split between coal and natural gas. The aim for 2030 is to alter that to 83% natural gas and 17% renewable energy, with “zero pollutants,” Steinitz said.
Already this year, the balance of electricity production will be 71% natural gas, 25%-27% coal, and 2% renewable energy, with the economy transitioning to using coal only for emergency and backup purposes by 2030.
“We have abolished the strategy of diversification of fuels,” Steinitz said, noting that Israel had previously believed that this kind of diversification — using coal and natural gas — was essential for energy security. “We realized we can reach energy security even without this diversification.”
“There is a historic opportunity to transform Israel into one of the first Western countries in which energy is produced with zero pollution and harm to the environment,” he said.
Steinitz said that according to OECD data some 2,500 people die in Israel annually because of air pollution. He added that the controversial natural gas legislation passed two years ago has been a “huge success,” having enabled the development of Leviathan, Israel’s largest natural gas field, which is expected to come online next year. The one and a half-year holdup in the development of Leviathan caused by delays in passing the gas regulations cost Israel some $20 billion, he said.
The development of the field allowed Israel to sign its “most significant export deals” with neighboring Egypt and Jordan since the signing of peace accords with these nations, he said.
Earlier this month, the partners in the Tamar and Leviathan offshore natural gas fields said they signed deals to export 64 billion cubic meters of gas to the Egyptian firm Dolphinus over a 10-year period. In September 2016, Jordan struck a deal to buy 8.5 million cubic meters of Israeli gas per day over 15 years, a deal estimated to be worth $10 billion.
“This strengthens the peace axis,” Steinitz said. “It is a geopolitical success that has been made possible because of natural gas.”
Israel, a country with scarce natural resources, discovered offshore natural gas fields that may enable it to achieve energy independence and become an exporter of natural gas. The Tamar gas field was discovered in 2009 and started production in 2013, while the Leviathan field — the largest deep water natural gas field discovered in the world in the past decade — was discovered in 2010 and is expected to start production in 2019.
Steinitz was speaking at a conference organized by the Israel Institute for Energy and Environment that dealt with the potential of and challenges to Israel’s natural gas industry.
Steinitz and other speakers were heckled by a group protesting against the planned Leviathan rig, which they say will be set up just 10 kilometers off the northern shore and will cause pollution and billions of dollars’ worth of environmental damage.
“Instead of a proposed rig, the companies should be setting up a floating production storage and offloading facility above the rig, not close to the shore of Dor Beach,” said protest head Yoni Sapir.
In addition, a gas-processing to be set up on land could pollute local water sources, said Eli Budman, a toxicologist who was protesting outside the hotel.
Steinitz dismissed them as “not in my backyard” protesters who were ignorant of the issues. “We will not submit to pressure by anyone. We are convinced we are doing the right things for the future of Israel,” he declared.
Responding to the demonstrators, Environment Minister Ze’ev Elkin said Israel cannot both cut its consumption of coal and stall development of the natural gas industry. “We can’t go in both directions,” he said.
The ministry was prioritizing the reduction of pollution, he said, and natural gas had to play its part as soon as possible. “Pollution is the number one environmental challenge of Israel,” he said. “The progress of Leviathan is of environmental interest to Israel.”
At the conference Yona Fogel, the CEO of Paz Oil Company Ltd. an oil refiner, said the price of natural gas in Israel as set by the agreement reached by government and the producers of the gas was too high. “There is a market failure here,” he said. Paz’s two plants, in Haifa and Alon Tavor, were ready to receive natural gas but “the gap between implementation and desire” was very high, he said.
Mathios Rigas, CEO of Energean Oil & Gas, a Greek oil and gas explorer that won the license to develop and operate the smaller Karish and Tanin offshore natural gas fields — which are estimated to have reserves of 2 trillion cubic feet (TCF) and are earmarked to supply fuel to Israel and compete with Tamar and Leviathan — said he expects drilling at the fields to start in 2019 and supply of gas to start in the first quarter of 2021. Energean will be investing some $1.6 billion in the development of the fields, he said, and has already raised the funds to manage the project, he said.
Yossi Abu, the CEO of Delek Drilling LP, a unit of Delek Group Ltd., which together with Noble Energy Inc. is a partner in the Tamar and Leviathan fields, said that he expects more deals with Egypt following the one with Dolphinus signed earlier this month. Egypt is estimated to need some 20 to 40 billion cubic meters of natural gas a year for the next decade, he said, and this presents an opportunity for Israel.
The pipeline infrastructure already in place will allow Leviathan to supply gas to Egypt and Jordan when production starts in the fourth quarter of 2019, he said, and will allow Israel to be part of a regional grid connected to the two Arab countries, as opposed to the energy island it has been until now.