Sunday, March 31, 2013
A new Energy Independent Israel is born
This marks a major turning point both for Israel's economy and society and will provide the state with energy independence at least until 2035. Prime Minister Benjamin Netanyahu said, "This is an important day for Israel's economy. On the holiday of freedom we are making an important step towards independence in the field of energy." He further added, "In the past decade we have pushed the gas industry forward and this will benefit Israel's economy as well as Israel's citizens." Upon its arrival to Israel, the gas will support the generation of electricity at power stations - owned both by the Israel Electric Corporation (IEC) and private companies, as well as smaller factories - gradually allowing for prices to drop as Israel's electricity shifts from expensive, polluting and import-dependant materials, such as diesel and fuel oil, to its own natural gas. The transition will also increase Israel's competitive edge in comparison to foreign industries and increase state revenue as royalties for the gas begin to roll in.
Israel discovered two large fields, Tamar and the heftier Leviathan, in 2009 and 2010. Tamar, which is now live, holds an estimated 8.5 trillion cubic feet while Leviathan, which boasts an estimated 16 to 18 trillion cubic feet of gas, is expected to go online in 2016, the approximate time when exports are expected to begin. Energy and Water Minister, Silvan Shalom, said in response: "This is Israel's energy independence day. It is truly a historic event – Israel has received energetic freedom, and gas from Tamar will lead to a drastic decrease in the IEC's production costs, hence a future reduction in electricity costs for the average Israeli consumer."
Yitzhak Tshuva, the owner of Delek Group, which owns Delek Drilling, said: "Today should inspire pride. A vision has become reality. Today, once again, we leave enslavement towards freedom: From dependence on foreign energy sources to independence in locally-made natural gas. "This is a momentous achievement for Israeli economy," Tsuva continued, saying a "new era| has begun, which "will change the face of the Israeli market" and "open new opportunities for Israel's economy, allowing it to take advantage of the natural gas in the environmental, geo-political, social and economical spheres, turning Israel into an important international player."
The start of production at Tamar will boost the economy. Echoing other forecasters, global investment bank HSBC said this week that natural gas production can be expected to contribute at least one percentage point to Israel's gross product growth this year. HSBC predicted GDP will grow 3.3%, compared with 2.6% without gas from Tamar.