Israel’s natural gas revolution leads to USD 86bn in savings

Tel Aviv [Israel], August 2 (ANI/TPS): Israel’s economy saved more than 316 billion shekels (USD 86.1 billion) over the past decade thanks to its “natural gas revolution,” according to an in-depth study released on Tuesday.
That reflects a savings of more than 120,000 shekels (USD 32,000) for every family in Israel over the past decade, according to the report by economic consulting firm BDO and the Israeli Natural Gas Trade Association.
“It’s kind of amazing. I’ve been in the industry for many years. Sometimes, you stop and look back on 10 years and see what’s happened,” Amir Foster, executive director of the Israeli Natural Gas Trade Association, told the Tazpit Press Service.
“We reduced CO2 emissions, expanded the national reserves, and became an exporter,” Foster said. “It’s like a case study. You can see in 10 years’ time, which is a short period of time in the world of energy, all these benefits and contributions of natural gas. We’re not talking about potential contributions but actual facts.”
The report found that the price of electricity in Israel was nearly 50 per cent lower than in Europe at the end of 2022 due to the country’s use of its offshore natural gas.
“We saved so much money for the households of Israel from the electricity costs. Without gas, electricity prices were much higher,” Foster told TPS.
Based on an analysis of public data published by Israel’s Ministry of Energy, Ministry of Environmental Protection and other entities, the natural gas revolution saved the Israeli economy 126 billion shekels (USD 34.3 billion) in energy costs derived from natural gas, and another 190 billion shekels (USD 51.8 billion) in environmental benefits as Israel moves away from more polluting fuels.
During the past decade, more than 19 billion shekels (USD 5.1 billion) in gas revenue has been paid directly to the state treasury — 14 times more than in the previous decade.
Foster told TPS he credited the figures to the public’s acceptance of the potential contributions of natural gas when gas was first discovered in the Eastern Mediterranean. He also credited the government’s “clear and stable policies” with helping create an environment attractive to international investors.
In July, British Petroleum, Azerbaijan’s national oil company Socar, and Israel’s NewMed Energy placed a joint bid for a license to explore for natural gas in two offshore blocks. He also noted that BP and the Abu Dhabi National Oil Company (Adnoc) made a USD 4 billion bid to purchase 50 per cent control of the Herzliya-based NewMed.
By 2030, an additional 70 billion shekels (USD 19 billion) of natural gas funds are forecast to be paid into the state treasury, the report said. By 2050, that figure is expected to rise to more than 300 billion (USD 81.8 billion).
Gas production rose fivefold in the last decade compared to the previous one. Israel’s natural gas reserves have also grown. “Our reserves have grown 40% over the last decade,” Foster said.
In 2012, Israel’s reserves stood at some 780 billion cubic meters (BCM) of natural gas. In 2022, that figure reached 1.087 billion BCM as more natural gas discoveries were made in Israel’s economic waters and the assessed volumes of the fields were updated.
Israel is the leader in saving gas for the future among Organization for Economic Cooperation and Development (OECD) members, the study said. The rate of gas production is about half that of the largest producers in the OECD.
According to a 2015 report by the Ministry of Energy, there is a potential for discovering an additional 2,100 BCM of natural gas in Israel’s economic waters, which would triple the current reserves.
“Israel is ranked third among OECD countries in terms of reserves per capita and enjoys a relative advantage in the use of natural gas for domestic consumption and export,” said Chen Herzog, chief economist and partner at BDO Consulting Israel, who authored the report.
“Now is the time to enjoy this advantage through using natural gas in the domestic economy and expanding exports,” Herzog added.
Foster explained to TPS that expanding Israel’s natural gas infrastructure would be paid for by exports. Clear export policies and government approval for more export agreements are the keys to sustain Israel’s success, he said.
“We need to expand the Tamar and Leviathan gas fields with more infrastructure and production, because in the next decade, we will need more gas for Israel,” Foster stressed. “But that costs a lot of money. So if you want enough gas in the next decade to be in the market and not in the ground, you need to have more exports which can finance the infrastructure for the local market. That’s like a win-win.” (ANI/TPS)