Cabinet approves 40% gas exports

Prime Minister Benjamin Netanyahu: We have withstood the populist wave against people who don’t know how to run an economy.

The cabinet today approved exporting 40% of Israel's natural gas reserves, and increasing the amount of gas to be kept for the domestic market to 540 billion cubic meters (BCM). Data presented to the cabinet stated that Israel consumed 7 BCM of gas in 2012 and that the projections of a massive increase in gas consumption indicate that the amount held in reserve would suffice for at least 25 years.

The vote was 18:3. The no votes were cast by Minister of Communications Gilad Erdan, Minister of Environmental Protection Amir Peretz, and Minister of Health Yael German.

At the start of the cabinet meeting, Prime Minister Benjamin Netanyahu said that the decision to export 40% of Israel's gas reserves and keep 60% for domestic use was the right balance. "Today, I am submitting to the cabinet a decision that I made along with Minister Energy and Water Resources Silvan Shalom, Minister of Finance Yair Lapid and Governor of the Bank of Israel Prof. Stanley Fischer. We held serious, in-depth, significant discussions because we are delving into the depths of the sea, and made a decision about Israel's gas economy," he said.

"Israel has been greatly blessed with gas in the Mediterranean Sea. This gas can meet two of our basic needs: one is to move the local economy forward by consuming cheaper energy, that part which can use gas; and the second thing is to fill the state coffers with billions of shekels from gas exports and the taxation that we will levy on it. The correct balance between the two is not self-evident. We discussed it, we discussed and we decided. I think that we found the correct balance. We were not swept away on the waves of populism that are washing over the country, the world, and we did the right thing for the State of Israel."

Netanyahu added, "The important thing now is to move quickly. We certainly understand that investors can lose hope. They can think that we have succumbed to populist pressures or endless bureaucracy. We want to move quickly. I want to tell you one basic thing: without gas exports, there will be no local gas economy. These are the basic rules. The most basic understanding on how we produce gas from the water. Without gas exports, there will be no local market. This mistake, succumbing to populism, 'Let's keep our gas at home' has been made by several countries and they keep their gas at home. It is buried under the ground or under the sea, beneath layers of populism and bureaucracy. We cannot do this. We must extract the gas. The correct balance between the local market and exports - this is what we will do today.

"I think that the ability to withstand the populist wave, against people who do not understand how to run an economy, who can easily destroy economies, this ability, is within this government. We are united and we have considerable strength and determination to enact this important move.

"I would like to say an additional word that must be said here. For decades, the State of Israel, the government of Israel in all its branches, unsuccessfully searched for gas. Those who succeeded were from the private sector, entrepreneurs who took risks and found it - and this must be said today. In the populist wave that is flooding the State of Israel, this also must be said, they must not be fobbed off, their contribution certainly cannot be denied, but we must also take for the state its due, and this is what we are doing.

"The correct balance is the decision that we will make here today. And I think that this is correct. It ensures the needs of the citizens of the State of Israel, both by filling the state coffers with considerable funds from exports and by supplying the local market with cheap energy."

Demonstrators protested outside the Prime Minister's Office in Jerusalem today. Last night, 100 demonstrators protested against gas exports in Jerusalem's Paris Square, near the Prime Minister's Residence, and nine protesters were arrested after trying to block the street.

Published by Globes [online], Israel business news - - on June 23, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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