Academic journal article Energy Law Journal

Israel's Energy Resource Management Policy: Lessons for Small Markets

Academic journal article Energy Law Journal

Israel's Energy Resource Management Policy: Lessons for Small Markets

Article excerpt

I. INTRODUCTION

During 2009 and 2010, major natural gas deposits were discovered offthe shore of Israel. With these discoveries, Israel was transformed from a state that was almost completely dependent on energy imports to a potential energy exporter. In order to establish a resource management strategy for these new discoveries, the government of Israel appointed a series of official committees to examine policy options and make recommendations to the Cabinet.1 The Israeli government recognized that the new energy resources created significant new opportunities that should be identified through comprehensive policy analysis. The government also recognized that there were competing public interests at stake in its energy policy: fiscal, commercial, public health, geopolitical, environmental, etc., and that the conflicts between these competing public interests were best resolved through interagency discussions among various ministries and government agencies. Government officials were also highly aware that infrastructure projects in Israel are usually highly contested and often delayed for years by legal injunctions. Thus, the government aimed for a thorough policy formation process upfront that would be more resilient to legal challenges.

Israel's policy process for developing its energy resource strategy was unique: most states, upon discovery of initial large energy resources, embark on production and export without formulating a clear strategy. The public policy formation process in Israel was exceptional also in its approach to long term planning for security of supply: few states upon discovering new energy resources have considered the long-term needs of the domestic market and the implications of the resource policies for the local economy prior to initiation of major production and export. Consequently, most other natural gas producing states have either exported gas until their reserves were depleted and they were forced to import gas (for example, Egypt) or revised their export policies after exporting significant quantities of gas in order to prevent shortages in the domestic market (for example, Netherlands).

Despite this exceptionally thorough initial formal policy formation process based on inter-ministerial committees, cabinet approval and review by the High Court of Justice, Israel spent over five years attempting to develop a viable regulatory framework that can realize its desired energy policy objectives and which delayed further development of the gas resources. This article claims that standing in the way of broader utilization of these gas reserves has been two ideologically based self-imposed constraints: non-involvement of the government in establishing infrastructure and the assurance of establishment of a competitive gas market. These constraints impinged the ability of the government to realize greater domestic utilization of the gas sources and other public interests such as lower gas prices, improved public health, and improved security of supply of energy. During the policy making process, in most cases when policy proposals were suggested that could improve Israel's security of supply, but entailed government direct involvement or limited the attempt to establish a competitive gas market, the representatives of the economic policy institutions, such as the Ministry of Finance, struck them down. Moreover, the security of supply elements recommended by the inter-agency committee that was established to recommend gas policy by and large were not adopted by subsequent government decisions on the gas sector.

The attempt to establish a competitive market has leftIsrael's security in supply of natural gas highly vulnerable: although other gas sources have been found, currently all of Israel's gas supplies are supplied from a single field, Tamar, by way of one pipeline that enters the Israeli coast in the south of Israel, in close proximity to the Gaza Strip. The subordination of energy security considerations to competition concerns is especially noteworthy, given that traditionally the Israeli government and public generally give national security considerations greater weight than most other public interests. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.