“IEC will need the surplus gas from Tamar”

Tamar
Tamar

Gas expert Miki Korner insists Israel should embrace the switch from coal to natural gas.

“Israel Electric Corporation must not relinquish the option to purchase natural gas from the Tamar reservoir - it will need it,” said Miki Korner, the former chief economist of the Natural Gas Authority at the Ministry of Energy and Water Resources.

“The Ministry of Environmental Protection will likely force the company to further reduce its use of coal which will increase its need for natural gas,” he explained.

Korner claimed the directive handed down to the IEC by the ministry last week - to reduce its use of coal at its Hadera station by 8-10% - was “just the beginning.” He claims the Ministry of Environmental Protection will force the company to reduce coal use at the station by 20% in the future and to enforce a similar decree at IEC’s Ashkelon station.

“The reduction in coal dependence is equivalent to 0.5-1 BCM per year - that is a lot of gas,” said Korner. He noted the Natural Gas Authority decision to allow IEC to sell its surplus gas at a 12% profit margin. “There will be those who need gas. We already have a shortage in gas and Leviathan is only expected to be connected to the shoreline in 2020.”

“But there’s more,” he added, “because IEC is going into 2016 with 1.56 BCM above the TOP (the amount of natural gas for which IEC must pay regardless of consumption), meaning in the coming years it could offset this gas with the surplus amount it purchased.”

Korner’s takeaway is that Israel must do everything in its power to reduce its dependence on coal and increase its use of natural gas.

“It’s not only about how coal damages the environment and our health,” he claimed, “There is an economic benefit in switching from coal to natural gas; for every BCM of gas produced in Israel, the state receives 60% of the sale. That is not true for coal. The IEC’s coal company imports the coal on ships. No taxes or royalties are paid on this coal.”  

Published by Globes [online], Israel business news - www.globes-online.com - on December 22, 2015

© Copyright of Globes Publisher Itonut (1983) Ltd. 2015

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