Israel Needs to Export Gas

Gas exports have a strategic dimension. The minute we sell gas to Jordan, Cyprus, Turkey, the Palestinian Authority and the countries of East Asia, our international position will improve.

Once, exporting was considered a good thing. We admired those who brought in dollars. Once, wealthy capitalists won respect and admiration. But today, the reverse is true: Exporting is bad, dollars cause harm and capitalists have become the hated tycoons.

Today, the public is willing to lose one eye on condition that the capitalists lose two. Or as one long-time acquaintance told me, we prefer a situation in which neither he nor we have anything.

This deep hatred and desire for vengeance are amply reflected in the story of natural gas exports from the large reserves discovered in the Mediterranean Sea. This time, the object of hatred is Yitzhak Tshuva, and he is the one they want vengeance on.

The Tzemach committee worked on this issue for a year and a half. It studied it in depth, heard experts and drafted recommendations, which said that first of all, we need to keep enough gas to supply ourselves for 25 years, both for electricity production and for use in industry - altogether, an amount totaling about 450 BTU. But because the Tamar, Leviathan and Karish gas fields fortunately contain a much larger amount of gas, about 900 BTU, the committee recommended allowing gas exports roughly equal in size to the projected domestic consumption - that is, another 450 BTU. This is a fair and reasonable recommendation for all sides.

But then, a wave of hatred against the committee and Tshuva erupted, and "gas exports" became a dirty word. Angry demonstrations against the export of gas began to be held opposite the home of Energy and Water Resources Minister Silvan Shalom, and Knesset members from the Labor Party began assailing Shaul Tzemach, director-general of the Energy Ministry and chairman of the eponymous committee that dared to recommend exporting. "The people demand justice," "The gas is ours," the demonstrators shouted. "We won't agree to any exports."

The one small problem with this is that in order to supply enough gas for domestic needs for 25 years, the Leviathan field has to be developed. Tamar alone doesn't have enough. To develop Leviathan, it's necessary to invest $3.5 billion in a deep-sea pumping station and a pipeline to carry the gas to northern Israel. But nobody will invest a huge sum like this in Leviathan if the gas can only be used for domestic needs; domestic sales simply won't cover the expense. In other words, it's essential to export if we want to have enough gas for our own needs, too.

Moreover, it's not sensible to store gas in the bowels of the earth for more than 25 years, because who knows what the main energy sources will be in another quarter of a century? Perhaps hydrogen? Or the sun? Or wind energy? And then the gas in the earth will suddenly be worth nothing.

The extremist demonstrators also don't understand that the general public is actually Tshuva's senior partner. The state's share of revenues from gas sales (royalties, income tax and the "Sheshinsky tax" ) will come to 50 percent at Tamar and 62 percent at Leviathan. In other words, we ought to want him to work hard and extract as much gas as possible from the earth as soon as possible, both for domestic consumption and for export, so that we will get more and more tax revenue.

Taxes on gas exports over the course of 20 years would come to the enormous sum of about $100 billion. That money could be used to finance education, health and transportation infrastructure, and thereby reduce social gaps. But this, too, makes no impression on the opponents.

Moreover, without exports, additional international companies that specialize in gas exploration won't come here. In other words, there will be no additional discoveries, and therefore no additional tax revenue. And thus we will slay the goose that lays the golden egg with our own hands. Without exports, we also won't be able to break the gas monopoly currently held by Tshuva and Noble Energy, and thereby bring about lower gas prices.

Gas exports have a strategic dimension as well. The minute we sell gas to, for instance, Jordan, Cyprus, Turkey, the Palestinian Authority and the countries of East Asia, our international position will improve.

But the hatred is stronger than any logical argument. The demonstrators are against any successful individual. They want to strike a blow at Tshuva even at the price of severe harm to our society and economy. The question is whether Silvan Shalom will also fall into the trap of populism.