Prime Minister Benjamin Netanyahu and the Ministry of Finance are urging the Tzemach Committee to increase the options for natural gas exports. The issue of gas exports is the focus of discussions by the inter-ministerial committee for the review of government policy on the natural gas market, chaired by Ministry of Energy and Water Resources director general Shaul Tzemach.
The committee has reached the final stage of discussions before submitting its final report, due within weeks. Sources inform ''Globes'' that, in these discussions, representatives from the Prime Minister's Office and the Ministry of Finance are leading the line to make the gas export policy as flexible as possible. The prime minister considers gas exports as a policy and strategy tool, which could bring closer relations between Israel and Asian powers, headed by China, which need natural gas.
At internal meetings, officials from the Prime Minister's Bureau said that the start of gas exports should be brought forward to 2018, even though most committee members are convinced that there is no way to set up export infrastructures on such a short timetable.
On this point, Prime Minister's Office representative on the Tzemach Committee, Gabi Golan, proposes allows natural gas producers to export gas via facilities that will be built in Cyprus, overriding the committee's interim recommendation to permit gas exports only from facilities built on territory controlled by Israel. The proposal is opposed by the committee's National Security Council representative, Avriel Ben-Yosef, who warns that Israel will not be able to protect facilities built in Cyprus.
The Ministry of Finance believes that Israel should maximize the gas's economic value, and that there is no point in keeping the gas in the ground beyond the amount needed to meet the economy's needs for 25 years. The ministry also claims that developers will not invest in the discovery and development of new gas fields without the major incentive of gas exports.
Fear of dependence on Arab oil
The positions of Golan and the Tzemach Committee's Ministry of Finance representative, deputy budget director Shaul Meridor, are opposed by the chief scientists of the Ministry of Energy and Ministry of Environmental Protection, Dr. Shlomo Wald and Dr. Sinai Netanyahu, respectively, neither of whom sit on the committee. They both oppose gas exports in principle. They wrote a report, which was initially suppressed but recently published, stating that gas exports will deplete Israel gas fields and increase dependence on oil precisely at a time when global oil output is expected to decline, and dependence on Arab oil is expected to rise. The scientists suggested that the government consider buying the gas from the fields' developers to encourage them to develop them
The Tzemach Committee's interim report, published on April 5, recommends that the state keep a strategic natural gas reserve of 400 billion cubic meters, 55% of the discoveries to date. It also recommends limiting the proportion of gas for export to 50% of small and mid-sized fields and 40% of large fields. This cap is on top of a 15% safety margin, which will be permitted for export only after the start of production, because at this point the exact size of a field can be known. The committee bans the Tamar field partners, who have already committed two-thirds of the field capacity to the domestic market, to transfer the field's export rights to other fields.
Published by Globes [online], Israel business news - www.globes-online.com - on July 25, 2012
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