News Analysis: Israel's only natural gas field falters, raising questions

Source: Xinhua| 2017-09-28 16:24:27|Editor: ying
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By Keren Setton

JERUSALEM, Sept. 28 (Xinhua) -- Just a few years after Israel discovered its first natural gas field, a faulty pipe has disrupted the flow of gas which is responsible for the majority of the small country's power supply.

Last week, a crack was found in the Tamar field. The supply has now been renewed to half of its full capacity, with complete resumption expected on Thursday.

As the supply was immediately cut and speculation that electricity prices were to subsequently rise, critics of the original gas deal found justification in their claims.

In addition, the alternative fuels being used create more pollution than natural gas.

But according to an anonymous source at Israel's energy ministry, "everything functioned perfectly. We were successful in guaranteeing consumers did not feel it. There were no electricity outages, no work stoppage."

It is important to note that the first days of the fault occurred during the celebration of the Jewish new year, when the majority of Israel's industry is at a standstill and electricity consumption dips.

Official data from Israel's energy ministry reveals that above 50% of the country's electricity is produced from natural gas.

The gas is currently coming from a single pipe and raft in Tamar. Three other fields have yet to be developed. The first, Leviathan, is expected to be ready for use in 2019, according to an official at the Israeli energy ministry. Other sources have speculated it will be much later than that.

Many energy experts had warned of the scenario in which the country is solely dependent on one pipe.

The energy company, U.S. drilling firm Nobel Energy together with Israeli partner Delek Drilling, were not obligated by the Israeli government to develop the other fields at the same pace.

Delek drilling was not available for comment.

"The gas corporations have no interest in developing Leviathan because it has no market," explained Amnon Portugaly, a researcher at the Hazan Center in the Van Leer Institute in Jerusalem.

Tamar has enough gas for Israel's needs for the next approximately 30 years.

The country's unique geopolitical situation means it cannot be dependent on its neighbors for a contingency plan and it also has no neighbors who need or want its gas, aside from Jordan which currently imports a small portion.

"We are an energetic island and we need to have back-up from independent sources," Portugaly added, "The state of Israel should have funded and developed Leviathan because it needs it."

In short, Portugaly is suggesting nationalizing Leviathan in order to guarantee a steady flow of natural gas into Israel in the event that Tamar falters again.

Most of Israel's natural gas goes to the Israeli Electric Corporation (IEC). The rest goes to several private power plants and factories. A small portion is used by private consumers.

Avi Bar-Eli wrote in The Marker, a financial newspaper, that "everyone warned, made sure the warnings were public and actually created and alibi. The government ignored it and no one else did anything about it."

So while the energy corporations understandably have no vested interest in rushing development on other gas sources, or perhaps even developing them at all in the coming decades, why did the Israeli government not heed the very public warnings?

"All the states interests were subjugated to the interests of the gas corporations," Portugaly accused.

Several years ago, when the gas framework was being ironed out by the Israeli government, there was wide public criticism.

The critics were wary of exactly the scenario that played out in recent days.

At the time the main opponents of the deal believed the interests of Israeli Prime Minister Benjamin Netanyahu lie in the deep pockets of those who own Nobel Energy and specifically their Israeli partner, Yitzhak Tshuva, who owns Delek group.

Netanyahu is currently the focus of several corruption investigations being conducted by the Israeli police.

Many of the deliberations on the framework were sealed to the Israeli public, citing national security interests.

It is yet to be established whether the consumers will have to pay higher electricity bills for the week-long shut-down. The clauses in the contract between the IEC and Delek that relate to disruption of supply are not available for public viewing.

But it is clear that the hiccup in the gas supply exposed the vulnerability many warned about.

"It highlighted and clarified the need to develop other sources," said the source at Israel's energy ministry that was otherwise satisfied with the way the crisis was managed.

"The fact that Israel does not have a master-plan for energy in this country, shows the impotence of this government," Portugaly summarized.

This time around the disruption was short and relatively easy to fix. This may not be the case in the future.