Israel on the Edge of an Energy Crisis.. Gas Reserves Threatened with Depletion

SadaNews - In the absence of a clear government strategy, Israel enters a critical stage of the "countdown to gas," with official warnings about the possibility of depleting reserves within just two decades. This reality raises increasing concerns about the future of energy security, especially as natural gas constitutes the backbone of the Israeli electricity and economic system, amid weak alternatives and declining investment in renewable energy sources. Is Israel truly preparing for the day after gas depletion, or is the crisis approaching silently?

Natural gas is the mainstay of the energy sector in Israel, generating approximately 70% of electricity and serving as the almost exclusive source of energy.

In 2016, confirmed reserves reached about 199 billion cubic meters; however, the rate of consumption and near-total reliance on gas puts this stock at risk of depletion within two decades.

Leaked government documents reveal that Israel has already entered a new phase of strategic concern regarding energy security, in light of weak real alternatives and declining investment in renewable energy infrastructure and storage.

Economically, Israel's reliance on gas is not limited to electricity generation; it also constitutes a central source of income through exports.

The company "New Med" (partner in the Leviathan field) has signed a long-term agreement with Egypt worth up to 35 billion dollars, described as the largest in Israel's history.

Gas Revenues

A report by the Israeli Ministry of Energy for 2024 recorded a new record in state revenues from natural resources, with income reaching about 2.37 billion shekels (710 million dollars), an increase of approximately 8.2% compared to 2023, which saw revenues of 2.2 billion shekels, according to the newspaper "Globes."

According to the report, about 60% of these revenues came from the "Tamar" and "Leviathan" gas fields, while the rest included tax fees and mineral revenues.

The Ministry of Energy estimates that state revenues from natural gas (from returns, corporate tax, and collection) could reach about 5 billion shekels (1.5 billion dollars) by 2025, with expectations to rise in the coming years to 10 billion shekels (3 billion dollars) annually.

Since natural gas production began in Israel, the state has approached a revenue of almost 30 billion shekels from these resources, of which 14.9 billion shekels (4.5 billion dollars) are direct returns collected by the Ministry of Energy, while the rest of the revenues came from resource profits tax and corporate tax through the tax authority.

Resource Depletion

However, experts warn that depleting these export resources without an alternative plan could expose Israel to a stifling energy crisis that threatens the economy and domestic supplies.

The discussion about the future of gas is intensifying among various Israeli governing bodies, with the Energy Ministry pushing for increased utilization of current reserves through exports, while the Finance, Foreign Affairs, and Security Ministries warn against depleting this strategic resource, viewing it as a diplomatic leverage that should be handled with caution.

Conversely, others propose enhancing alternative energy sources as an unavoidable option, such as solar energy, nuclear energy, and hydrogen.

However, these alternatives - according to experts - cannot form the basis of the Israeli energy program due to their high costs, long construction periods, and technical constraints, making reliance on them alone a potential recipe for a deeper crisis.

Israel could face a stifling energy crisis threatening the economy and internal supplies (Al Jazeera)

Energy Crisis

In light of these data, Aidin Benjamin, the energy, water, and ports correspondent for "The Marker" newspaper, points out a pivotal strategic question: How will Israel deal with the "post-gas" phase, and will it be able to formulate a comprehensive vision that ensures long-term energy security or find itself facing an unprecedented crisis threatening its economy and internal stability?

The correspondent pointed out that Energy Minister Eli Cohen tweeted this week, announcing that his ministry approved a new gas export line to Egypt.

However, the project the minister spoke about, according to the Israeli journalist, is not new, having previously received several approvals over the past years, but remained stalled due to disputes between the government and gas exporters.

As is his custom, Cohen emphasized the positive aspects of the plan, describing it as a step that enhances Israel's position as a regional power in the energy field, generating hundreds of millions of dollars annually, in addition to creating job opportunities.

Yet behind this positive image, Benjamin adds, "fears emerge that this project may weaken Israel's capacity to withstand long-term energy security challenges."

Gas Reserves

Ahead of the Jewish New Year at the end of September, a joint ministerial committee chaired by the Director General of the Ministry of Energy, Yossi Diyan, is preparing to hold a crucial meeting to discuss the future policy of the gas sector.

The committee is an extension of previous committees that addressed gas management issues and provided recommendations to successive governments. However, the new aspect of the interim report from the "Diyan Committee" published last April is its warning that Israel's gas reserves may not be sufficient and could be practically exhausted within just 20 years, according to the estimates of the Ministry of Energy.

The report references claims regarding the possibility of discovering additional gas reserves at sea, but the clear and agreed-upon fact is that no new field research or exploration is currently taking place.

It also recommends preparing for the possibility of gas imports, but this proposal lacks clarity, especially since Jordan and Egypt are importing gas from Israel itself, while there is currently no practical or ready alternative for the day after gas depletion.

It additionally points out that the near-total reliance on gas, weak alternatives, and the dominance of "Chevron" increase the vulnerability of the Israeli energy market.

Critical Stage

Economically, gas is a primary source of income for Israel and a lifeline for the electricity and industrial sector; thus, any decline in its production or rapid depletion of reserves may plunge Israel into a stifling energy crisis, according to the economic newspaper "Calcalist."

Experts warn that reliance on nuclear energy, hydrogen, and renewables without a comprehensive strategic plan could expose Israel to an energy crisis due to the long costs and technical challenges.

Reporter "Calcalist" Adiel Eitan Mustiki points out that Israel is facing a critical stage in gas management, balancing immediate economic gains with the need to ensure long-term energy security.

He noted that stalled negotiations between the "Tamar" field and the electricity company indicate the possibility of rising gas prices in Israel, with partners hesitating, despite the memorandum of understanding to extend supplies until 2035 and reduced competition due to the export of "Leviathan."

The reporter highlighted that energy companies estimate the reserve volume at 1027 billion cubic meters, while the Israeli Ministry of Energy estimates it at only 850 billion cubic meters.

With "Chevron" dominating approximately 90% of these reserves and operating the Leviathan and Tamar fields, the weakness of competition in the market is evident.

Despite calls from the Israeli Ministry of Finance and other parties to compel "Chevron" to relinquish one of the fields to enhance competition, Mustiki says, "the Israeli Ministry of Energy rejected" this proposal within the "Diyan Committee," reflecting the continued dominance and lack of a clear vision for the future of the Israeli gas market.