"My aim is to end this delay, which has cost us damages in the billions. With all the good will in the world, it's hard to think of another Western country besides Israel that has shot itself in the foot and caused itself damages amounting to tens of billions of shekels, not to mention the damage of energy insecurity," Ministry of National Infrastructure, Energy, and Water Resources Yuval Steinitz said today at the 4th annual Israel Infrastructure Conference.
"I want to say clearly that I've heard proposals, some of them off-the-wall. If the price goes down to $4 and there are price controls, and we freeze exports for the next four years, until the Leviathan reservoir is developed, like the critics want, the result will be obvious - no Leviathan, no Karish, no Tanin, and no further exploration or discoveries of more gas reservoirs. In this case, we'll be left with half of Tamar, and we'll lose the biggest natural resource every discovered in Israel - the Leviathan reservoir."
Steinitz mentioned Egypt as a country that restricted exports and limited the price to around $3. "The result was that today, Egypt has enormous undeveloped gas resources. Today, not only does Egypt not export gas; it imports gas. Egypt recently announced that the price for marine gas fields will be $5.88, because they saw what happened to them when they set the price at $3-4. Egypt also granted the gas companies tax benefits and state guarantees, and yes, the gas companies are investing in Egypt again. So to whom should I listen? To those who say that the price of gas in Israel should be the same as for the gas that used to flow from Egypt? I won't surrender to demagoguery."
Responding to the gas roadmap, Steinitz said, "The goal of the gas plan is to get Leviathan out of the sea. It ensures that Israel will benefit from the best of all possible worlds, in a reasonable and responsible environment. It guarantees hundreds of billions of shekels in revenue - revenue from royalties, ordinary taxes, and the Sheshinski excess profits tax. I took care of this revenue, and fought for it against those companies, so that Israel would receive over 60% of the gas profits, not 22%, like before the Sheshinski Committee. But this revenue won't arrive if we don't develop Leviathan, Karish, and Tanin. If that happens, the struggle was in vain, we'll lose hundreds of billions of shekels, and that's critical for our country."
Steinitz continued, "We'll bring the gas roadmap for cabinet approval in another 10 days, and we'll also bring it to the Knesset for a vote of confidence. I wanted to take it to the cabinet today, but the timetable was too short. We'll also make small changes, but not revisions that will require discussion of everything from the beginning. The plan we presented was an agreed plan.
"I'm not saying the gas roadmap is ideal. Had it begun several years ago, it might have been better. In this case, however, the clock is ticking, the geopolitics is changing, the global market is changing, and the prices are changing. The strangest argument that I'm hearing is therefore, 'You're in too much of a hurry,' - that's absurd."
Published by Globes [online], Israel business news - www.globes-online.com - on July 29, 2015
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