It turns out that we will not run out of gas quite so soon. Gas consumption is rising much more slowly than was predicted because the demand forecast published by the government was far too optimistic. It all looked terribly simple on paper, but reality has proven to be slightly more complicated. All of a sudden, we see that the real question is not whether to allow exports of gas that will exhaust our reserves too quickly, but how to remove the barriers and increase demand. We now realize that the question is not whether gas exports will destroy the Israeli economy's gas revolution, but whether any gas at all will be exported, because if the Leviathan gas reservoir is not developed, there will be neither exports nor a revolution.
The public has a short memory. Who remembers what went on here during the previous government, when Yair Lapid was Minister of Finance? We might remember the 0% VAT plan, but what about the Tzemach Committee, which recommended a reform in the Israeli gas sector? As far as we're concerned, August 2012 is ancient history.
Here's a short reminder: three years ago, the state decided to consider what to do with all the gas discovered off Israel's shores. A bunch of loudmouths screamed that if we let gas be exported from Israel, we wouldn't have any gas left over for domestic consumers. This band of salesmen was peddling fantasies about unlimited possibilities opened for economy by the discovery of natural gas reservoirs: how within three years every vehicle in Israel would be gas-powered, how a prosperous (and polluting) petrochemical industry would arise here that would export methanol to China. This coterie accused the Ministry of National Infrastructure, Energy, and Water Resources and the National Gas Authority of cooperation with the tycoons. It was alleged that the Ministry's gas demand forecast underestimated gas consumption, thereby leaving enough gas for allowing exports. "The gas revolution will get stuck if the gas runs out," all sorts of self-described experts warned us. These threatening forecasts are now being smashed against the rock of reality: demand for electricity is stagnating, with almost no growth; industrial enterprises are not switching to gas, and conversion of transportation to gas is non-existent. Our modern-day false prophets are still working diligently. Now they're trying to sell us dreams about liquidating monopolies and free competition; who will remember their record as false prophets?
Published by Globes [online], Israel business news - www.globes-online.com - on May 6, 2015
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