Natural gas in Israel

History

Historically, Israel relied on external imports for meeting most of its energy needs, spending an amount equivalent to over 5% of its GDP per year in 2009 on imports of energy products. The transportation sector relies mainly on gasoline and diesel fuel, while the majority of electricity production is generated using imported coal. As of 2013, Israel was importing about 100 mln barrels of oil per year. The country possesses negligible reserves of crude oil but does have abundant domestic natural gas resources which were discovered in large quantities starting in 2009, after many decades of previously unsuccessful exploration.

Until the early 2000s, natural gas use in Israel was minimal. In the late 1990s, the government of Israel decided to encourage the usage of natural gas because of environmental, cost, and resource diversification reasons. At the time however, there were no domestic sources of natural gas and the expectation was that gas would be supplied from overseas in the form of LNG and by a future pipeline from Egypt (which eventually became the Arish–Ashkelon pipeline). Plans were made for the Israel Electric Corporation to construct several gas-driven power plants, for erecting a national gas distribution grid, and for an LNG import terminal. Soon thereafter, gas began to be located within Israeli territory, first in modest amounts and a decade later in very large quantities located in deep water off the Israeli coastline. This has greatly intensified the utilization of natural gas within the Israeli economy, especially in the electrical generation and industrial sectors, with consumption growing from an annual average of 9,900,000 m³ (350×10^⁶ cu ft) between 2000 and 2002 to 3.7×10⁹ m³ (129×10^⁹ cu ft) in 2010.

Gas discoveries

In 2000, a modest discovery was made when a 33-billion-cubic-metre (BCM), or 1,200-billion-cubic-foot, natural-gas field was located offshore Ashkelon, with commercial production starting in 2004. As of 2014 however, this field is nearly depleted—earlier than expected due to increased pumping to partially compensate for the loss of imported Egyptian gas in the wake of unrest associated with the fall of the Mubarak regime in 2011. In 2009, a significant gas find named Tamar, with proven reserves of 223 BCM or 7.9×10^¹² cu ft (307 BCM total proven + probable) was located in deep water approximately 90 km (60 mi) west of Haifa, as well as a smaller 15 BCM (530×10^⁹ cu ft) field situated nearer the coastline. Furthermore, results of 3D seismic surveys and test drilling conducted since 2010 have confirmed that an estimated 621 BCM (21.9×10^¹² cu ft) natural-gas deposit exists in a large underwater geological formation nearby the large gas field already discovered in 2009. An article in The Economist stated that Israel had "verified" gas finds of 35 trillion cubic feet as of early 2014. The US Energy Information Administration listed Israel as having 7.0 trillion cubic feet of proved reserves as of 1 January 2015.

The Tamar field began commercial production on 30 March 2013 after four years of extensive development works. The supply of gas from Tamar is expected to provide a boost to the Israeli economy, which has suffered losses of more than NIS20 billion between 2011 and 2013 resulting from the disruption of gas supplies from neighboring Egypt (and which are not expected to resume due to Egypt's decision to indefinitely suspend its gas supply agreement to Israel). As a result, Israel, as well as its other neighbor Jordan, which also suffered from disruption of gas deliveries from Egypt, had to resort to importing significantly more expensive and polluting liquid heavy fuels as substitute sources of energy. While Egyptian gas supplies to Jordan were partially restored in 2013, supplies from Tamar, and in the future from the Leviathan field, are expected to satisfy all Israeli domestic natural gas needs for decades to come. Moreover, due to the erratic supply of gas from Egypt, Jordan has reportedly been considering signing an agreement to import gas from Israel. While less desirable to the kingdom from a political standpoint, such an agreement represents the most expedient and least costly option for Jordan to compensate for its loss of Egyptian gas. The energy shortages in Egypt which led it to curtail its exports of natural gas mean that Egypt too may someday obtain natural gas from Israel, though so far Egypt has rejected such deals on political grounds, despite the fact that procuring gas from Israel would be significantly cheaper than from other sources of imported natural gas.

The large gas discoveries so far have confirmed that the Levant basin of the Eastern Mediterranean contains significant quantities of natural gas and, potentially, crude oil. Consequently, additional exploration for oil and gas off Israel's coastline is continuing. A source close to Prime Minister Benjamin Netanyahu has valued Israel's natural gas reserves at $130 billion, while in 2012 BusinessWeek estimated the reserves' value at $240 billion. The businesses involved in exploration aim to export a share of future production, but others argue that it would be preferable, on geopolitical grounds, to use the gas within the country instead of other energy sources. In early 2012 the Israeli cabinet announced plans to set up a sovereign wealth fund (called "the Israeli Citizens' Fund") that would allocate part of the royalties from energy exploration to education, defense and overseas investments.

Power stations

List of Natural gas-fired power stations in Israel: