The Gift of Natural Gas

Discovering gas in the sea was the best thing that could have happened here. It is a lifeline for Israeli industry.

Nehemia Shtrasler
Nehemia Shtrasler
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Nehemia Shtrasler
Nehemia Shtrasler

It suddenly transpires that natural gas from the sea is the major component in the economy's growth. Suddenly the Bank of Israel has announced that one quarter (!) of the growth in the coming year will stem from the gas. That is to say, had the wicked Yitzhak Tshuva not found gas in the Mediterranean, the economy would have grown by a mere 2.8 percent, which is on the border of a slowdown. But now, with the gas, we will grow by 3.8 percent, which is reasonable.

However, since hatred makes many analysts crazy, we heard many of them explaining in the past week that the growth derived from the gas is not real. It will not lead to employment, they said, and will barely contribute anything. Simply a few billions that will go into Tshuva's deep pockets.

Whoever makes claims like this understands nothing about economics. Discovering gas in the sea was the best thing that could have happened here. It is a lifeline for Israeli industry. The discovery will lead to a rise in the standard of living of all of us. The state will get some 50 percent of the value of the gas at the Tamar site and some 60 percent at the Leviathan site. The tens of billions in revenue from taxes will make it possible to collect less tax from all of us, and leave more money free for personal consumption that will move the wheels of the economy. The government will be able to utilize the additional income in order to provide more education, more welfare and more infrastructure.

The income that the Delek Group (where Tshuva is the controlling shareholder) will receive will not be tossed into the wind. The money will go to new investments in Israel and abroad, exports will increase as will imports, and employment will grow in the process, as the Keynesian multiplier teaches us. It suffices to look at Norway, a country with a mediocre standard of living until it found oil in the North Sea and turned into a rich country.

There are people with neo-Marxist viewpoints who want the state to nationalize the gas. One of these is Dov Khenin of the Hadash party, who said he envies Hugo Chavez of Venezuela because he nationalized the oil industry in his country. It is interesting whether Khenin would also like the poverty, distress, repression and corruption that Chavez brought upon his country with cruelty and stupidity. Khenin will never be able to understand that a government cannot run a business. He doesn't remember that when the state tried for decades to find oil, it found nothing. He is not capable of grasping that only entrepreneurs who are motivated by a colossal will to succeed and make a profit will take gigantic risks and find gas where the state found nothing.

His friend Shelly Yacimovich thinks like he does, of course. She doesn't speak about direct nationalization but her proposal for draconian taxing of the gas and forbidding its export has similar practical significance: chasing away all the investors and annihilating the private gas exploration industry.

The Green organizations likewise fought against Tshuva and the gas. They were opposed to the establishment of a gas depot in the north of the country and thus prevented gas already arriving from the Tamar site - a step which would have brought tremendous benefit to the economy and lessened the risk of hitches.

Now they are opposing the very drilling in the sea, without caring at all that the gas improves air quality significantly when compared with the burning of diesel oil, crude oil and coal. The industry and workplaces are also not important to them. What they care about is that one or two little fish will be harmed by the drilling, and it is not important to them that eight million people who live here will benefit from the lowered prices of electricity and desalinated water.

Large industries, like the paper mills in Hadera that were in danger of closing, will continue to operate since the gas will replace more expensive diesel oil and make it possible for them to compete. Otherwise they would have transferred the production to Turkey and the paper mills' 3,000 employees would have had to go home. The same fate would have awaited the Phoenicia glass factory in the north, the Sugat factory in Kiryat Gat and many other enterprises where a great deal of energy is required.

Yesterday Tshuva inaugurated the giant Tamar mid-sea production platform some 24 kilometers west of Ashkelon. It was a day of celebration. Perhaps as a gift for this festivity, we can stop hating the person who was successful and celebrate together with him the growth, employment and rise in living standards of all of us.

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