Bad News for the Israeli Gas Economy

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Off Haifa coast, oil rig at enormous Leviathan natural gas field.
An oil rig in the Leviathan natural gas field off the Haifa coast.Credit: Albatross

The latest developments in the gas economy have caused the gas guardian gang to go into shock. For years they have been saying that there’s no chance that the Leviathan natural gas field will be developed, because “there’s nobody to sell the gas to,” “Noble energy is actually going bankrupt” and “the prices of gas are in free fall.”

And now, suddenly, alas, things are starting to move. The gas companies, Delek and Noble Energy, have waived the “stability clause” in order to meet the demands of the High Court of Justice; the National Infrastructure, Energy and Water Ministry has approved the master plan for developing Leviathan; and the two companies have announced that they will invest 450 million shekels ($117 million) in meticulous planning of the drilling platform and the necessary equipment.

They have even promised to conclude the development of the gas field by the end of 2019, at an investment estimated at $6-7 billion – and that’s really frightening, because the gas may yet emerge from the belly of the earth and bring growth, dollars and high taxes to the empty treasury coffers.

Recently, another catastrophe occurred. Turkey began to seriously consider the purchase of large quantities of gas from Israel, and if we build a pipeline to Turkey (a matter of 530 kilometers and $2 billion), we’ll be able to sell gas to all of Europe.

The gang of gas guardians has found an answer for that, too. It says that we shouldn’t export to Turkey, because President Recep Tayyip Erdogan is liable to get angry one day and turn off the tap. Have you noticed the absurdity? The customer, who will be dependent on gas to operate electricity plants and factories, will turn off his supply. Until now we thought that an embargo is imposed by the supplier – from now on it’s the customer who imposes an embargo on himself and commits suicide. Do you realize what hatred and an agenda can bring about?

The high priestess of the gang of gas guardians saw that, and decided to make a contribution of her own. MK Shelly Yacimovich (Zionist Union) realized that the Harel Insurance, Investments and Financial Services company intends to purchase 3-4 percent of the Tamar gas field from Noble Energy, for the pension funds it manages. That’s good and positive news, but not for Yacimovich, who wrote to the Finance Ministry’s Commissioner of Capital Markets, Insurance and Savings Dorit Salinger that she must investigate the deal, because it is “clearly illogical, surprising and foolhardy,” and “to create a channel that will enable you to reject the deal.”

Why reject it? Because the prices of gas are expected to fall and those who are saving for their pensions will lose a fortune, says Yacimovich, who has become an expert on gas, investments and international risk management.

And there’s another riddle here: How is it that Yacimovich, who has been claiming for years that the gas companies are robbing us because they charge scandalous prices that bring them huge profits, is now suddenly saying that the purchase of several percentages of the pit of grease is not worthwhile for savers who will suffer “certain damage”? How has the world turned upside down? How has white become black? How has profit become loss? Is there no limit to charlatanism? And perhaps the explanation lies in Lenin’s words: “The worse the better,” and that’s why we have to aspire to absolute evil?

Americans whom I have asked said that Erdogan decided to sign a rapprochement agreement with Israel now of all times because only lately were the clouds of uncertainty removed from Leviathan. It is important to Erdogan to vary his sources of supply, so that he won’t be dependent only on Russia. But the gas guardian gang is opposed to that, too. It says that we shouldn’t export gas at all, although we have a huge surplus, which we won’t be able to use up even in the next 60 years. Turkey in any case is a huge customer, which is now paying Russia $6-7 dollars for a unit of gas, which is higher than the price in Israel – thus contradicting another lie of the gas guardian gang.

And I have another piece of bad news: International gas experts have determined that Israel’s marine territory contains another four huge gas fields, each of them the size of Leviathan. So that if we’re lucky, and Turkey signs an agreement to buy our gas, gigantic American companies will come here to dig, discover, and bring more income and growth.

Wait a minute, all that won’t happen. Yacimovich is opposed to that, too.

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