Environmental Protection Minister Avi Gabbay has voiced his objection to the government’s natural gas policy blueprint during an appearance before the Knesset (Parliament) Economics Committee. The plan would give control of Isrel’s largest gas field, Leviathan, to Israel’s Delek Group and U.S.-based Noble Energy. Gabbay, however, says that will result in high gas prices, which will discourage the use of natural gas in industry. This will affect public health, since use of natural gas as an energy source could dramatically reduce air pollution, and related morbidity and mortality.
The Israel Electric Company still uses more coal than natural gas, since coal is cheaper. Industry uses fuel oil due to its low cost. Heavy transport uses diesel. The gas deal will mean higher gas prices, which means these sectors will not convert to gas.
There is a critical connection between protecting the environment and the use of gas, since using gas an an energy source results in much less air pollution than using fuel or diesel oil. Natural gas as a source of energy production can reduce pollution by 99%.
In my eyes, this is the most important of all the environmental issues for which the ministry is responsible. Air pollution is not a matter of comfort and quality of life, rather one of health and life. For the six months during which I have seen the data and I’ve heard about more and more children with lung diseases, allergies, asthma.
While the ministry is taking steps to subsidize the use of natural gas, the price of gas remains prohibitive, and makes it much harder for the IEC, factories, and transportation to use gas.
Ironically, or maybe not, I am the only minister that opposes the gas plan, but also the one who is working to solve the problem so that there will be an increase in gas use.
It is clear we can only reduce the risks to Israeli citizens of gas and oil drilling, and not prevent them completely. And it is clear that a malfunction can do much more harm than a cargo ship can do.
The risks are massive. A gas leak from drilling, in unusual water flow, can shut down desalination facilities in Israel.
The MoEP is working, albeit it without formal authority, and gas companies are actually cooperating.
Also at issue is what the policy should be regarding the small Tanin and Karish gas fields. Should we be developing tiny fields that will triple the environmental risks, or should we, in fact, save these fields as a reserve for the future?
Sustainability and Energy Security
The MoEP’s approach is to ensure sustenance and energy for many years, and not to find ourselves in a situation in which there is shortage of energy sources; a shortage that will require us to import energy.
In this respect, it is important to understand the source of the conflict-of-interest that exists between the companies that discovered the gas and the State – any state. The gas companies want to sell the gas as quickly as possible, even at very reduced prices. The state wants the security of knowing it will have energy for years to come.
Therefore, we have not the gas companies complaining about the bureaucratic difficulties in creating a local market. It’s just not financially worthwhile for them to create such a market.
But what if we went too? What if we made a mistake in assessing the size of the reservoir? What if wells have collapsed as a result of pumping too fast? Theoretically and practically, we can import gas. But the cost of liquefaction and transportation are approximately $ 2.50 per unit of heat. In other words, the price of gas would rise by 50%.
I do not think that we have here a war between the good and the bad. Gas companies are doing what it economically worthwhile for them within the boundaries that a country, as a sovereign state, should put up for them. Still, as someone who dealt with regulatory issues for 20 years, it is clear to me that borders were crossed here, and we are no longer the same country we once were.
Another issue is, of course, the certainty and security of our gas supply. Factory owners do not believe they will get enough gas, even if the gas pipeline is connected to their facilities.
I was the CEO of infrastructure companies, and I understand the need for backup and redundancy. When the infrastructure minister says he will not close the coal-fired electric stations as long as there is only one gas pipe, I understand. And yet, 80% of industrial pollution stems from these two stations.