Environmental Leaders Decry Israel’s Failure to Use Its Natural Gas to Go Green

Environmental Ministry head and Delek CEO agree on the problem but disagree on who’s to blame.

Offshore Leviathan natural gas drilling site.
Albatross

Energy and environmental leaders criticized government policy at a conference Monday, saying Israel was not taking full advantage of its natural gas reserves while continuing to rely on coal and other fossil fuels. But they disagreed about who was responsible.

Israel is not using enough relatively clean natural gas or even cleaner renewable energy sources, said Yisrael Danczinger, director general of the Environmental Affairs Ministry, at the Hadera Energytech Conference.

Danczinger blamed the consortium controlling Israel’s natural gas reserves and the gas framework agreement it reached with the government, which set the terms for governing the gas industry and preserves its control. A key section of the framework was struck down by the High Court of Justice last month and the terms are now being renegotiated.

“The gas is controlled by a monopoly and its price has to be subject to controls to make it worthwhile [to users],” Dancziger said.

“Because it doesn’t pay, industrial plants don’t want to use gas, and it’s the job of the government to solve this failure by creating a thriving domestic market.”

Yossi Abu, CEO of Delek Drilling, one of the companies in the gas consortium, agreed that Israel should be using more gas but blamed the state.

“The tax on gas is 60% and on coal 0%,” Abu said. “It’s easy to blame the entrepreneurs, but the government has enough tools to create a natural gas revolution in transportation and electric power production.”

He pointed a finger at Israel’s “bureaucracy” for delaying the transition to gas power at industrial plants, saying that officials barred the partners from negotiating contracts to sell the gas for five years after the giant Leviathan gas field was discovered in December 2010. “How many factories are going to invest in transitioning to gas without any certainty that there will be a supply for them?” he asked.

Despite the legal problems created by the High Court’s decision, Abu said the Leviathan partners, which include other Delek Group and Texas-based Noble Energy, remain committed to the end of 2019 deadline to get the field into production.