28/01/2016

Environmental Protection Minister Avi Gabbay held a press conference today, Jan. 28, 2016, to call on gas companies to lower their prices, following a drop in oil prices. High gas prices will mean fewer companies will use it as an energy source; instead they’ll use polluting oil, and Israelis will "pay the price" with their health.

A Call to Lower Natural Gas Prices

Minister Gabbay held the​ press conference after Phoenicia Flat Glass Industries CEO Eran Haimovitz announced yesterday that he was ordered by the company’s owners to switch from natural gas to mazut oil.

Gabbay spoke about Phoenicia’s troubles at a manufacturers’ conference two months ago; he noted that the company flourished after it connected its pipes to natural gas, but high gas prices were forcing it to reconsider that decision. And he added that gas prices are preventing widespread gas use in Israel.

Phoenicia CEO Eran Haimovitz: "I am in favor of natural gas and I want to use natural gas, and it would be right thing if all [companies] consumed natural gas in Israel. But look what happens – no one wants to connect to natural gas in Israel because it is expensive. We are at a point of market failure."

The minister said that manufacturers, owners of heavy fleets, and public transportation companies constantly tell him that while natural gas is excellent, "you don’t buy at these prices."

Minister Gabbay: "I think I am the main salesperson for natural gas companies, but every salesperson knows that if he doesn’t manage to sell for months, there is a problem with the product or the price, or he doesn’t know how to sell."

For the last few months, Gabbay continued, the Ministry of Environmental Protection (MoEP) has heard from factories that signed connection deals with natural gas companies, and are happy that the gas still hasn’t arrived, because it will hike up prices for them.

"Yesterday’s announcement was the MoEP’s nightmare. A factory moving from natural gas to polluting mazut oil is like pulling the rug from under all the actions we take in the ministry to reduce air pollution."

MoEP Director General Yisrael Dancziger, who was also at the press conference, agreed: "Very important programs to reduce air pollution have begun, which will cost hundreds of millions of shekels. But [these programs will not succeed] if gas prices remain high, because they are not financially worthwhile for anyone right now." 

Minister Gabbay went on to say that reducing air pollution is the MoEP’s number one priority, and that natural gas is the number one solution. "The gas deal [that the government agreed to] sets maximum prices for gas. The significance of setting maximum prices is that the companies can lower them when they want to."

Minister Gabbay: "I am calling on companies, and especially on Israeli stockholders: Lower prices. The market will develop and it will benefit your sales, industry, and the cost of living. Lower prices and ‘connect’ to the essential need of Israelis for cleaner air. Lower prices because all Israelis are breathing polluted air, including you and your families.

"I am also calling on manufacturers and fleet owners not to despair, and to continue to build pipes and stations. Ultimately, gas will be sold at a price you want, and it will be a shame that once we get there, we’ll have to start everything from scratch and waste time."

On Sunday, Jan. 31st, Minister Gabbay plans to discuss the significance of falling global oil prices in the weekly Cabinet meeting.

Actions the MoEP has Taken to Encourage Natural Gas Use

  1. ​Instructing the Israel Electric Corp. to reduce the use of coal in power plants, and replace it with natural gas.
  2. Conditioning industrial air emissions permits on a transition from mazut oil to natural gas, or on the installation of filters.
  3. Lending financial support to heavy vehicle fleets (public buses, garbage trucks) to transition to natural-gas fueled vehicles.
  4. Encouraging local authorities and business owners to invest in natural gas fueling stations.
  5. Reducing bureaucracy related to development of the gas industry.