THE JERUSALEM BUSINESS CONFERENCE

INTRODUCTION TO THE PANEL

AMOS RON

Director General, The Ministry of Energy and Infrastructure

Recent developments in the area have created a new Circle of Opportunities, enabling us, for the first time since the establishment of the State of Israel, to implement a comprehensive and rational energy policy. Cooperation instead of isolation; long-term planning for a time of peace instead of short-term crisis management. We are now able to plan energy supplies for the whole Middle East in accordance with professional forecasts of supply and demand well into the 21st century.

Several cooperative programs are already being realized today- the supply of petrochemical products throughout the region; the connection of the electrical grids of Eilat and Aqaba – these are projects of the new era of peace. Taba is already connected to the Israeli electricity grid.

Long-term projects include the Interseas Canal, connecting the Dead Sea to the Mediterranean or Red Sea, and the prospective use of natural gas for public transport. In addition. there are plans to intensify the search for oil and gas, as well as to promote the development of alternative uses of energy in everyday life.

As for the 21st century, the question is whether the decline of energy sources will lead to global limitations on energy systems. especially concerning fuel consumption, and whether new patterns of cooperative efforts will maximize the use of alternative energy sources.

In the last few years, the Israeli government has launched a policy of privatisation of parts of the public sector in order to adapt to the new international order. A beginning has been made in the privatisation of the energy companies, one of which is Naphta. The Israel Electricity Company is to undergo a similar change. The privatisation process is by and large due to be completed by 1996.

Preliminary to this process, there has been a marked reduction of government interference in the fuel market. The government has lessened its control over most fuel products and new fuel companies have entered the market, resulting in increased competition and lower prices. Our ultimate goal is a free and competitive energy market.

We also plan to build a power plant using oil shale to create energy. In addition, during the next few months the Ministry of Energy will conduct an exhaustive review of the Oil Refinery’s concession, due to run out shortly, with a view to establishing two independent economic units – one in Haifa and one in Ashdod. All future contracts will be characterized by more independence from the government.

These developments, in addition to the geopolitical changes in the region, will ensure the formation of an integrated Mediterranean region. Here in Israel, we conceive the whole Mediterranean Sea as one entity in which all parts are linked together through oil and gas pipelines, electricity grids and the integration of other energy resources. so that all can work together in one Circle of Opportunity.