Israel Needs to Let Go of the Natural Gas Fantasy

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The platform of the Leviathan natural gas field.
The platform of the Leviathan natural gas field.
Nir Hasson
Nir Hasson
Nir Hasson
Nir Hasson

“Blessed are you, Lord, our God, king of the universe, who brings forth natural gas from the sea for us.” With these words, Energy Minister Yuval Steinitz concludes his new book, “The Battle Over the Gas” (Hebrew). The book recounts a political and legal saga, at whose center Steinitz posits himself as the hero who took on greedy tycoons, cynical politicians and radical environmental groups. In the end, after a bruising campaign, there is a catharsis: The Leviathan natural gas field, located some 130 kilometers (80 miles) west of Haifa, finally become operational in December 2019, and the gas has begun to flow.

Steinitz depicts the discovery of natural gas in Israel’s territorial waters as nothing less than a miracle. He’s not alone in feeling this way: Many officials involved in economic and political discourse see the gas as an economic, political and environmental blessing.

But in the decade that’s passed since the discovery of the Leviathan reserves, changes have occurred that transformed the picture radically. The cost of producing a unit of solar energy is plunging steadily and is approaching zero; the prices for storing solar electricity are plummeting too; and most important and disturbing – new studies show that, in contrast to what we thought previously, natural gas aggravates global warming no less than coal does.

Unlike Europe, which is accelerating its transition to renewable forms of energy, Israel is still in partial denial about the climate emergency. However, an analysis of the latest available economic data and technological developments, combined with a sober view of the gravity of the climate crisis – all these raise the possibility that the day will come, and it’s probably not far off, when natural gas will go from being an asset that has allowed us to wean our power plants from burning coal to a burden. And when that day comes, the right thing to do will be to leave the gas under the seafloor, in the ground.

In the meantime, Israel is moving in exactly the opposite direction. It is diverting vast amounts of capital toward establishing an infrastructure to transport gas across the country, and investing resources in building gas-fired power plants that will tie the country’s economy to an energy source that will soon be obsolete. All this is being done even though the forecasts indicate that in the foreseeable future, gas will become an outmoded source of energy, expensive and adding intolerably to both air pollution and the climate crisis.

The problem is that, while natural gas releases much less carbon dioxide than coal when burned, there is another gas – methane – that escapes during its production and transportation. And methane changes the picture.

Looming next stage

So when should the gas tap be turned off? A full answer to that question involves complicated technological, environmental and economic explanations. The straightforward response is that gas already loses in the competition with renewable energies. Indeed, it’s most unlikely that in another 30 years, gas will be an efficient or relatively clean energy-producing technology.

According to expert opinions, natural gas is best regarded as a transitional fuel, a kind of bridge meant as an interim stage until we’re ready to move on to truly good, clean, safe and carbon-neutral energy resources – the renewable and green ones, including the sun and the wind. However, recent studies show how the pernicious effect gas has on global warming, together with the dramatic fall in renewable-energy prices, have turned the bridge into a route that leads backward instead of forward.

“Gas is a transition fuel – its time has passed,” says Shahar Dolev, a Tel Aviv University expert on ecological economics and chairman of the Israeli Energy Forum, an NGO that advocates the transition to renewable energies.

Energy Minister Steinitz and Prime Minister Netanyahu at a ceremony marking the arrival of the foundation for the Leviathan platform, in January 2019. Credit: Marc Israel Sellem

“Gas was a transition fuel in 2000, but the time has come to look at the next stage. Within five or 10 years,” says Dolev, “gas turbines will no longer be [economically] worthwhile. In the United States, old turbines are already being shut down and replaced by solar solutions. Ten years sounds like a lot, but you build a power station to work for 30 years. We need to stop and think very hard about every turbine we build.”

The reason for the plunge in solar energy prices – attributed to technological developments and above all to the inexpensive, mass manufacturing of solar panels in China – is less important. What is important for our purposes is that this downward trend has continued unbroken since the 1970s, and it’s so sharp that in some countries the production of solar energy costs virtually nothing.

In 2010, the average price of a kilowatt-hour unit of solar energy stood at about $2. During the past year, it dropped to 50 cents per unit, and in some countries, including in the Middle East, a KWH of solar is already being sold for under 2 cents. The price differs from country to country, but the decrease is relevant in Israel: Last year, Israel signed off on a bid in which a unit of solar energy was sold to the Israel Electric Company for a price ranging from 8 to 15 agorot (10 agorot = $0.029), as compared to 27 agorot per gas-generated unit. If the solar unit costs less and does not cause pollution, what’s the value of the Leviathan gas field?

Here is where the storage issue enters the equation. In his new book, Steinitz addresses this issue in response to remarks by MK Miki Haimovich (Kahol Lavan), who had the effrontery to talk about leaving the gas in the ground.

“Is it possible,” he writes, “that Mrs. Haimovich believes that in order to realize her New Zealand fantasy, Israel’s citizens will agree to closet themselves in their homes in the evenings and sit in the dark or by candlelight, and then tremble in the winter cold and broil in the summer heat?” In other words, solar power is fine when the sun is shining and there are no clouds, but what does one do the rest of the time?

This issue is of particular relevance to Israel, because we cannot rely on other forms of renewable energy. The local climate is not suitable for wind turbines, and we don’t have raging rivers, either. The use of solar energy, if it is to be economically justifiable, demands an ability to store the output for use during periods without sun. Here the plunge in costs enters the picture: In the past decade the prices of storing energy in lithium batteries have fallen by 85 percent. According to the Colorado-based Rocky Mountain Institute, which addresses issues of sustainability and energy efficiency, within less than 15 years, the costs of storage will decline to a point where it will no longer be viable to operate the existing gas facilities.

“It’s the same technology we have in phones and in electric cars,” says Eitan Parnass, founder and CEO of the Green Energy Association of Israel. “In the period when Better Place was operating [the company shut down in 2013] the price of storage was about $1,000 per kilowatt. Today we’re at $180. In another four years, when the price is $100, an electric car will cost the same as a car that runs on gasoline, and the automotive industry will promote storage technologies.”

Panels and farmland

One argument put forward by natural-gas advocates is that, to enjoy cheap energy from the sun, Israel would need more territory. A lot more. That’s true: There’s no comparison between solar prices here and in countries graced with huge, open expanses. But a report published last month by Environmental Protection Ministry found that already today, the country is capable of generating half of the electricity it consumes by means of solar panels in built-up areas – on roofs of residential buildings, in commercial structures, water tanks, parking lots and more.

Methods also exist for installing solar panels above agricultural areas exposed to excess sunlight. “Using farmland kills two birds with one stone,” says Amnon Portugali, an energy researcher at the Heschel Sustainability Center in Tel Aviv. “At the same time, you give farmers another source of income and you also protect the ground from overheating and drying out. That means a great deal more territory for solar energy.”

Netanyahu visits the Leviathan gas platform. Credit: Marc Israel Sellem

In the final analysis, the land will be found. Probably there won’t be much choice in the matter, because the comparisons between gas and renewable energies will factor in an additional variable: taxation on greenhouse-gas emissions, a so-called carbon tax. In the future, that tax is expected to become a major impediment to the production of and demand for gas-based energy. In Europe, this will almost certainly be the case within a few years, and in fact it’s already happening in the realm of transportation, in terms of the price paid at the gas pump. In the meantime, Israel is lagging behind, with no signs that a similar tax will be levied here. But for the Israeli economy, it doesn’t really make much difference. The president of the European Commission, Ursula Gertrud von der Leyen, already made clear last month that a carbon tax will also be levied on goods imported to Europe. Israeli industries and farmers interested in marketing their products there will thus, in any case, have to pay tax on emissions caused by the manufacture of those goods. The more addicted to natural gas the Israeli economy becomes, the more vulnerable it will become in international markets.

“The Europeans are gearing their industry to zero emissions by 2050,” says Dr. Gil Proactor, head of the climate change department of the Environmental Protection Ministry. “They are saying very clearly that they are not willing to have their industry hurt by [domestic] taxation, so it’s clear to all of them that if a country doesn’t levy a tax that is commensurate with the amount of pollution [caused in the manufacturing process] – Europe will do it for them. That pressure will increase. It is in Israel’s interest to address the crisis beyond the international demands involved, because that is the only way to maintain a competitive, flourishing economy.”

Meanwhile, as Israel drags its feet, the world hurtles ahead. Everyone involved in the energy field today agrees that the figures relating to renewable energies – which currently supply about 10 percent of the world’s electricity – do not represent the full picture or an indication of the numbers we can expect in the years ahead. Already today, most of the new power stations being built around the world are driven by renewable energy. Our neighbor to the south, Egypt, is currently completing construction of one of the world’s largest solar farms; moreover, China, India and the United States are also building huge farms. For its part, Israel’s Energy Ministry points out that those countries are also continuing to invest in their gas infrastructure and attempting to augment global gas consumption. Still, the trend is clear.

Critical period

This trend becomes even clearer if one takes into account new research on the environmental damage caused by gas. Gas has for years been marketed to the Israeli public as a clean-energy source. “Natural gas, zero pollution,” Steinitz has boasted. In terms of particles that are emitted and endanger public health, gas does have a clear advantage over coal or petroleum distillates. But damage to health is one thing and damage to the environment is another.

It’s greenhouse-gas emissions that are playing havoc with the world’s climate. Over the years, natural gas tended to be presented as a green fuel, because its emission levels were lower than those as compared to those from the burning of fossil fuels, which release hazardous carbon dioxide. Now, however, the picture is becoming more complicated.

Natural gas is made up of mainly of methane molecules. According to the accepted calculations, methane is a gas that over its lifetime traps 23 times more heat in the atmosphere as carbon dioxide. What this means is that every bit of leakage – whether during drilling of the well, transport of the gas, or rig maintenance at sea – causes severe damage and intensifies the greenhouse effect.

A study published recently in Nature magazine maintains that the estimates of the amount of methane emitted by the gas industry are too low, and should be increased by 40 percent. Other studies have suggested that the figures reported are 90 percent lower than they should be.

And that’s not the worst news. Another calculation presents a far gloomier picture. When comparing carbon dioxide and methane, one must factor in the length of time that their molecules survive in the atmosphere. Methane molecules survive for a relatively short time. . During the first 20 years, however, methane is 86 times more powerful a heat-trapper than carbon dioxide. Unfortunately, the coming 20 years are precisely the critical period in the climate crisis.

According to the Energy Ministry, the figures showing that gas has no advantage over coal are correct for obsolete infrastructures that have multiple leaks. The ministry maintains that the new infrastructure will fare better. The problem is that the anticipated, long and winding pipeline that will conduct gas to all parts of the country will raise the environmental costs of the gas and increase the risk of leaks.

Steinitz poses for a recent ministry clip celebrating the start of the flow of natural gas from the Leviathan field.Credit: Israel Ministry of Energy

In the meantime, however, there have been encouraging numbers about curbs in the rise globally in greenhouse-gas emissions related to electricity production. But according to the Energy Forum’s Shahar Dolev, the statistics could be misleading, because part of the decrease can be attributed to the transition from coal to gas, whose emissions cannot be measured with the same precision as coal.

Notes Proactor: “Natural gas has contributed to the reduction in the use of mazut [low-quality fuel oil] and coal, but now we need to stop and reexamine every additional investment in infrastructure. We don’t want to invest billions when it’s clear that this is already the end of gas. The world is moving in the direction of renewable energy, and it will be a long-term calamity if we [in Israel] don’t go with it.”

Not a dollar price

About two months have gone by since the gas started to flow from the Leviathan field, but already it appears as though there are obstacles accumulating in Israel’s way to becoming a thriving gas kingdom. Both Steinitz and Prime Minister Benjamin Netanyahu have already retracted their forecasts of tax revenues of hundreds of billions of shekels from this industry; now they’re talking vaguely about “tens of billions.” Moreover, gas deposits that have been discovered elsewhere in the Middle East make Israeli gas somewhat less attractive in the regional market; gas prices are continuing to fall internationally; and European countries are deploying for the UN climate conference that is scheduled to be held in Glasgow this coming November, where key decisions are expected to be made about a carbon tax.

But above all, during these two months, the real price of gas became clearer – and it is not measured in dollars. On January 15, NASA and the World Meteorological Organization announced that 2019 had been the second hottest year in history. The hottest was 2016, but that was an El Nino year, which tilted the results upward. The disaster looming before us is larger and the window of opportunity for coping with it is closing far faster than anyone had dared to estimate. Together with it, the window within which we can continue to emit greenhouse gases is also closing. In the end, the gas will have to remain in the ground because, for economic and environmental reasons, there simply is no alternative.

Udi Adiri, director general of the Energy Ministry, rejects criticism of his ministry’s gas policy. “We are in the midst of unparalleled environmental development,” he says. “We started with filtering facilities in the coal turbines, we went on to closure of the coal-powered stations [all of which will be shuttered by 2025], we will reduce air pollution from electricity by more than 90 percent by 2025. And by 2030 we will have reduce our carbon emission by at least 32 percent. It’s only thanks to this process that Israel is meeting the goals of the Paris Agreement. In every other area – in treating garbage and in transportation, for example – the authorities are engaged in years’ worth of agonizing over what to do, and in the end nothing happens on the ground. We’re doing something amazing.”

Adiri says that the ministry’s supreme goal is a full transition to renewable energies. “We want zero coal, zero mazut, zero diesel, as many renewables as possible and the rest natural gas. But those who talk today about stopping the development of natural gas will find themselves with coal in the end.”

After revolutionizing the production of electricity, he adds, the most important step today for reducing greenhouse-gas emissions in the country is the transition to electric vehicles. “For that,” Adiri adds, “Israel needs an extraordinarily credible electricity system. In that way we will succeed in putting 1.5 million electric cars on the roads within 10 to 15 years.”

Even if new gas-burning power stations are built, he says, there is no obligation to use them. They will be used as backup when needed, and in any event they will not be built at the expense of investment in the electricity grid or in the deployment of renewable energies.

Adiri: “We are trying to do things with a long-term view, so that renewable energies on a large scale will also be introduced. The developments in the natural gas field will support the move. What I do for most of the hours of the day is check how I’m promoting renewable energy.”

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