Right on schedule, by Hanukkah, natural gas from Israel’s Leviathan offshore field will begin to flow to shore.
The turn-around in Israel’s energy situation over the past two decades is simply stunning. Just 15 years ago, Israel met 100 percent of its energy needs with imported oil and coal. Today, the vast majority of Israel’s electricity is produced from its own natural-gas fields. With the Leviathan reserves coming online, projections are that within a few years, 85 percent of Israel’s electricity will be supplied from its own gas fields. (Per government targets, the remaining 15 percent will be from renewable energy sources such as solar and wind.)
According to Bini Zomer, Noble Energy’s vice president for regional affairs, “Israel is blessed in ways we couldn’t fathom until very recently. The benefits in terms of energy security, tax revenues, a cleaner and healthier environment and increasing ties with neighbors simply cannot be overstated.”
Noble holds a 39 percent interest in the Leviathan field, which it discovered in 2010, as well as a 25 percent interest in Israel’s Tamar gas field.
Even more stunning is that Israel will be exporting natural gas. Customers in Egypt and Jordan—Israel’s one-time adversaries—have signed substantial contracts to purchase Israel’s natural gas. Jordan is expected to save $600 million per year by switching to natural gas. Despite sometimes tense relations with Jordan’s leadership, Israeli decision-makers have endorsed natural gas exports to the Hashemite kingdom.
Furthermore, Egypt, which is gearing up to be the Mediterranean’s primary energy hub, has two LNG (liquified natural gas) terminals, each with demand approximately the same as Israel’s in 2019. Egypt’s goal of being that energy hub is, in part, dependent on imports from Israel—something that has been promoted and touted by the Egyptian government.
Already today existing natural gas reserves provide 70 percent of Israel’s electricity, with the remainder coming from coal and renewables. Between royalty rates, corporate income tax and additional taxes, the Israeli government will receive 60 percent of the natural-gas revenues. Over the next 15 years, the Israeli government expects to receive some NIS 63 billion ($18 billion) from the Leviathan field alone. Industry officials estimate that from today’s known reserves Israel has a 100-year supply of natural gas.
Israel is also looking to diversify and utilize more natural gas in its transportation system. By the end of the next decade, Israel’s Energy Ministry is proposing to power Israel’s buses and heavy-duty trucks with compressed natural gas (CNG). And while some have voiced security concerns advocating for a diversity of energy sources, with multiple lines feeding natural gas to Israel and back-up alternative energy options, those concerns have been largely addressed.
Because of the type of reserves and their location, many of the environmental concerns have also been ameliorated. While most natural-gas wells are usually a mixture of condensate (petroleum liquids) and methane gas, these reserves are more than 99 percent methane, so opportunities for spilling oil into the sea are almost nonexistent. Further, Israel maintains high air quality standards and enforces them in order to protect communities on-shore.
Israel’s renewable energy technologies such as industrial solar are also producing significant and increasing amounts of energy for Israel’s electric grid. Israel is exporting this technology around the world. Israel’s first prime minister, David Ben-Gurion, dreamed about solar energy from the Negev helping to power Israel, and we are witnessing his dream come to fruition.
If we take a step back and look at the big picture, the turnaround in Israel’s energy picture is phenomenal. We celebrate the miracle of Hanukkah for the discovery of enough fuel to keep the menorah lit for eight days. This year, we should thank God and celebrate the discovery of enough fuel and alternative energy to keep all of Israel lit and powered for the next century.
Gary Schiff is a Jerusalem-based natural resource consultant connecting Israel and the United States.