The amount of gas in the Leviathan reservoir is 20% less than the partnership estimates, according to the international consulting firm hired by the Ministry of National Infrastructures, Energy and Water Resources. Whereas the Leviathan partnership claims that the reservoir contains 21.9 trillion cubic feet (TCF) of gas, according to consultant RPS, it contains only 17.6 TCF. "Globes" revealed the discrepancy two months ago.
The ministry's figure is from British consultant RPS, one of the most professional and best-known firms in the business. It was charged with examining two resource reports, that of NSAI on behalf of the partnership and that of SGS, the consulting firm previously hired by the ministry, and to provide the ministry with a professional opinion. Its conclusion is that the quantity of gas in the reservoir is 17.6 TCF, 20% less than the partnership's estimate. The main significance of the discrepancy is that it is liable to mean disagreement over how much gas is eligible for export. Under the rules set by the Israeli government, 50% of the gas in a reservoir of the order of size of Leviathan may be exported.
Approval of the framework gas agreement is a good thing. Development of the Leviathan reservoir is important for the Israeli economy, signing gas supply contracts is important for the Leviathan partners and for the Israeli economy, and exporting gas to neighboring countries is vital for Leviathan, and hence for the Israeli economy as well.
This is not so, however, if the details are concealed from the public, and if the public is informed that the amount of gas in the Leviathan reservoir is 20% less than the partners estimate ten days after the government approves the framework, and if an official statement is released about approval of the development plan for the reservoir that only incidentally mentions that the amount of gas is considerably lower than expected.
The main reason for public opposition to the gas framework agreement is lack of confidence in the way it was arrived at. The public feels cheated and robbed, that the framework agreement was put together far away from public scrutiny, by a cabal of interested and connected parties in the gas exploration companies and the government.
That's a pity. On the whole, the gas framework agreement is alright, and implementing it is vital. Nor does the amount of gas earmarked for export necessarily have to be reduced just because the total amount of gas is lower: Israel has sufficient natural gas for domestic consumption to last for decades, and is consuming much less than was expected. In any case, the future lies in renewable energy sources and not in natural gas. But the public does not believe any of this, which in itself is injurious to implementation of the framework.
Published by Globes [online], Israel business news - www.globes-online.com - on June 5, 2016
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