It was exactly two years ago that Noach Hager, an economist at Bank Leumi at the time, published the report titled “The Potential of Natural Gas in the Israeli Economy”, where he outlined that “regulation is the main barrier for the timely development of Leviathan”, and outrageously forecasted that “the earliest Leviathan will be able to produce first gas for the domestic market will be in 2019”.
Hager invested three years in studying for a MSc in Energy Management, with the hopes of contributing to the “bright” future of Israel’s natural gas industry. During the formulation of natural gas agreement one year ago, Hager published his master’s thesis on the establishment of a state-owned gas company to participate alongside private companies in Israel’s upstream industry.
Hager recalls presenting his ideas to senior officials at the Ministry of National Infrastructures, Energy and Water Resources. “In a country where privatization is the trend, nobody was really interested in considering this idea. If you read the hundreds of pages of protocols during the formulation of the gas agreement, the possibility of government investment in the gas industry is mentioned maybe once.”
“Fast forward a year and we are stuck with a marginally acceptable gas agreement that can’t be approved through Israel’s democratic and bureaucratic system.” Referencing the Bank of Israel’s recently published annual report, Hager sighs, “Finally a government authority has poked its head out and said “there is room to consider government investment…with the objective of improving social well-being.”
According to Hager, the Israeli public and government are under the false pretense that the approval of the gas agreement will automatically result in the development of the Leviathan reservoir. “The gas companies still need to ratify a final investment decision and obtain financing.” Hager shares the view of the Bank of Israel that wrote, “if the developers do not manage to finance the development, it would be worthwhile for the government to assist them in return for a share in the profits from the sale of the gas.”
Hager, who now oversees global business operations at RSA the security division of EMC, had a final message to all parties involved in the gas industry. “Just like I didn’t wait around for Israel’s natural gas industry, neither will the gas companies if this country doesn’t get its act together.”
Published by Globes [online], Israel business news - www.globes-online.com - on April 7, 2016
© Copyright of Globes Publisher Itonut (1983) Ltd. 2016