Noble Energy Inc. (NYSE: NBL) VP and Noble Energy Mediterranean Ltd. CEO Lawson Freeman is calling on the Israeli government to encourage exports from the Tamar and Leviathan natural gas fields, which he said was in the country's interest. "Tamar and Leviathan have much more gas than Israel needs," he told the "The energy market - growth in Israel and the global situation" panel at the "Globes" 2012 Israel Business Conference yesterday.
"The question is where we go from here," Freeman said, "Israel's policymakers face a decision on how to encourage foreign companies to invest in the Israeli gas market. I believe that they should ensure the export of gas. There are two ways to ensure gas supply: hold tightly on to current reserves, or export. We export gas from places that no one thought of. Our and the Israeli government's interests are the same, and we should exploit this window of opportunity."
Special Envoy and coordinator for international energy affairs at the US Department of State Ambassador Carlos Pascual said that Iran was losing $3 billion a month on oil exports because of the sanctions imposed on it by the UN. He said that Iran's oil exports had fallen from 2.3 million barrels a day to just over 1 million. Commenting on global energy market changes and US energy independence, he asked the audience whether the US would continue to be involved in the Middle East, and answered his own question, "You bet!"
International Energy Agency chief economist Dr. Fatih Birol said, "When talking about oil prices, we think of the 2008 price, but this in inaccurate. We should also consider the time frame of prices, as this is what affects global economic growth. Today, the price of natural gas is five times higher in Europe and ten times higher in the Far East, compared with the price in the US. Five years ago, the price was the same in all three regions."
Birol added, "Energy prices are now rising artificially. We expect global investment in energy to fall in the coming years, which will also affect prices." He was optimistic that the US would free itself from dependence on Arab oil and gas, saying, "Within ten years, the US will be the world's largest natural gas producer. In 2015, it will pass Russia in gas production, and in 2017, it will pass Saudi Arabia in oil production."
Currently, Russia is the world's largest natural gas producer and Saudi Arabia is the world's largest oil producer.
Asia is the potential market
Kings Policy Institute visiting professor Prof. Nick Butler listed five possibilities for the development of Israel's natural gas fields. "The first is the construction of a liquefied natural gas (LNG) facility for gas from Leviathan, but the question is where to build it," he said. "The other options are to export the gas to Turkey via pipelines, send the gas to Eilat for transfer to Aqaba for export, or send it to Cyprus and build an LNG facility there."
Butler added, "These options are affected by politics. I'd be surprised if the government were to rely on one of its neighbors. Since the US and Europe have their own gas, the best potential market for Israeli gas is Asia."
Israel Energy Initiatives chief scientist Dr. Harold Vinegar presented the company's innovative technology for developing Israel's shale oil and its potential. "There are billions of barrels of oil in Israel's coastal plain," he said. "Technological progress enables us, for the first time, to utilize this vast reserve, a green and economically worthwhile resource. Within a decade, Israel will be able to march toward energy independence, at a production price of $40 per barrel. This is an opportunity that Israel cannot allow itself to miss."
Published by Globes [online], Israel business news - www.globes-online.com - on December 11, 2012
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