Israel Spending Extra $1.5m a Day After Egypt Gas Line Explosion

Electric Corporation costs rise in the aftermath of the Sinai pipeline bomb.

The interruption to Egyptian gas exports is forcing the Israel Electric Corporation to spend an additional $1.5 million a day on alternative fuels, said National Infrastructure Ministry director general Shaul Zemach yesterday.

The Egyptians halted gas exports after the pipeline to Jordan and Syria was bombed Saturday. The entire system needed to be shut so it could cool down, industry sources said. Gas exports are expected to resume within the next week, however.

Sinai gas pipeline - AP - 6/2/2011

The IEC is using alternative fossil fuels, such as diesel and mazut (heavy, low quality fuel oil). They cost ten times more than natural gas.

About 40% of the country's electricity production is from natural gas, and about half of the gas comes from Egypt, via exporter EMG.

"The first, most important thing that needs to enter the public discourse is energy security. This is something that is starting to concern many countries around the world, and it should concern us, too," Zemach told the Herzliya conference.

Regarding the declaration by firms developing the Leviathan reserve to export gas, Zemach said Israel needed to ensure its own needs were met first.

"We won't let natural gas be exported until we're sure we've taken everything into account to make sure Israel has energy security. In times of crisis, everyone falls back on his own assets, and is first to use them. We'll export gas but first we'll make sure we have enough for times of crisis. We must shelter Israel from external crises," he said.

Israel's dependence on oil is a fiscal problem, too, he said.

"The gas reserves discovered off Israel's shores are a strategic asset. As time passes we'll rely on them more, and thus any export policy will put Israel's long-term interests first," Zemach said.