Israel To Be A Major Energy Supplier? To Replace Russia?

Israel a Major Energy Supplier? New Gov’t Decision Opens Up Gas Exploration

David Isaac

 Israel’s Minister of Energy Karin Elharrar announced on May 30 that she will award new gas licenses to companies that seek to explore off Israel’s shores, a reversal of a decision she made last December. The reversal was driven by Europe’s urgent need to find alternative gas supplies to replace those previously obtained from Russia, which provides 40% of Europe’s total gas consumption. Analysts told JNS that the minister made the correct decision, as it will boost Israel’s finances, win it geopolitical points and increase its proven gas reserves.

“In view of the war in Ukraine and its effects on the supply of natural gas to the European continent, the Minister of Energy … instructed her office staff to prepare for the fourth competitive round for natural gas exploration in the economic waters of the State of Israel,” a May 30 ministry statement said.

The ministry’s December decision to halt gas licenses was to last for “one year only,” Elharrar said at the time, so that Israel could focus on renewable energy. That has now taken a backseat to the need to shore up Europe’s energy supplies.

“The State of Israel is mobilizing to assist Europe in diversifying its energy sources. The global energy crisis is an opportunity for the State of Israel to export natural gas. This is alongside its sincere and genuine concern for what is happening in Europe,” Elharrar said, according to a ministry statement.

Chen Herzog, partner and chief economist at BDO Israel, told JNS: “It’s a good decision for Israel from an economic point of view, environmental point of view and geopolitical point of view.”

“It allows Israel to further utilize its natural resources, and also help its partners and neighbors in Egypt and Europe as further discoveries enable Israel to export still more gas to neighboring countries and to the region,” he said. “In terms of the environment, in view of the increase in coal production in Europe after the crisis with Ukraine, providing more gas to the market may help reduce coal usage. … So, it contributes to climate goals.”