Israel Considers Options as Prices Fall

Israel's energy minister, Yuval Steinitz held a meeting January 19 to consider the natural gas regulatory framework in light of energy markets globally.

Present were senior officials from the ministries of energy and finance, Bank of Israel, and the national economic council. A representative from consultancy HIS reviewed the current state of affairs in the global energy industry.

A problem that cropped up during the meeting was the low motivation of major Israeli energy users to convert their facilities to use gas, because of the low price of fuel oil and the high conversion costs. The government, it was suggested, might consider launching an aggressive incentive program in order to persuade them to convert their factories to natural gas.

An energy ministry spokeswoman told NGE that the consultation was not about changing the framework principles but how to react to plummeting oil prices, bedevilling the development of the Leviathan field. There are also problems downstream, such as how to incentivize small enterprise owners to convert their facilities to gas. She said it was the first discussion in a series. 

According to business daily The Marker, it was argued that the crisis in global exploration would last for at least another year and reduce the prospects for new exploration offshore Israel. "Gas export has become a problem," The Marker quoted one of the attendees. "It is hard to see long-term gas sales contracts. Even the profitability of the development plan is not clear cut."

Ya'acov Zalel