In a celebratory Hanukkah announcement earlier this month, Prime Minister Benjamin Netanyahu and Energy Minister Eli Cohen declared that they had sealed a $35 billion natural gas deal with Egypt, hailing it as a “historic moment.”

Netanyahu promised that not only would the deal pump NIS 58 billion ($18 billion) into state coffers to strengthen education, health, infrastructure and security, but he also vowed that the deal would not result in increased energy prices for the Israeli public.

In reality, though, the deal carries the risk of creating a shortage of natural gas in the domestic market within about a decade, leading to higher electricity prices for the public.

Under the largest export deal in the country’s history, a total of 130 billion cubic meters (bcm) of natural gas will be supplied to Egypt through 2040, with Israel receiving NIS 112 billion ($35 billion) in return. The amount totals some 15 percent of the country’s proven gas reserves, or about a decade’s worth of domestic consumption.

While Israel will receive around half of the proceeds from the sale, the rest will go to the partnership that owns the development rights to Israel’s offshore Leviathan reservoir, one of the world’s largest deep-water gas discoveries. The consortium includes NewMed Energy, formerly Delek Drilling (part of Yitzhak Tshuva’s Delek Group), which owns a 45.3% stake, US energy giant Chevron, which holds a 39.66% stake, and Ratio Oil Corp., with a 15% stake.

Boosters have touted the deal as a diplomatic and economic bonanza, trading the natural resource for buckets of cash and increased regional stability.

But critics argue that it amounts to a sell-off of the country’s energy reserves, benefitting a handful of tycoons while putting the country on the path to losing its energy independence sooner.

“Israel currently enjoys energy independence for its electricity market, meaning we are not dependent on any other country for our electricity consumption and supply,” Ariel Paz-Sawicki, head of research at Lobby 99, a grassroots advocacy group, told The Times of Israel.

He said the deal means the Leviathan reservoir will double its rate of production and be depleted more quickly. That, he said, will shorten the period of time that Israel remains energy independent.

“What is likely going to happen to Israel is what happened to other countries that, in the past, were energy independent, and because of liberal export policies, became dependent on expensive natural gas imports such as the Netherlands or the United Kingdom,” Paz-Sawicki said.

More than 70% of Israel’s electricity is currently generated from domestic natural gas........

© The Times of Israel