Israel guarantees energy supply with new gas project
0 Comment(s)
Print
E-mail Xinhua, April 1, 2013
Natural gas from the Tamar Field started flowing in what Israeli Prime Minister Benjamin Netanyahu called an important day for the Israeli economy.
The Tamar field, located under the Mediterranean, some 90 km outside the northern Israeli city of Haifa, will transport gas to the city of Ashdod where it will connect to already existing gas infrastructure built in Yam Tatis field.
There is an estimated 250 billion cubic meters of gas in Tamar, which is expected to make Israel energy independent until 2035. Until now, Israel has had to import coal and diesel to produce electricity, which is expensive and pollutive.
Sunday was indeed a great day for Israel and the country's economy, said Eytan Seshinski, professor at the Hebrew University of Jerusalem and the author of the Seshinski report which formed the basis for the Israeli government's policy on gas revenue.
"Both the consumers and the government will benefit from the gas. The government in particular will have additional revenue from the taxation of the gas which has been imposed the so called excess profits tax, the Seshinski tax. It will give the government perhaps up to 30-40 billion U.S. dollars in the future," Seshinski told Xinhua.
He explained in accordance to a law, which the Israeli Knesset is set to pass, that the tax revenues from the gas will not be added directly to the government's coffers but will be transferred to a sovereign wealth fund, the National Recourse Fund, which will be modeled on the fund established by Norway and Holland to handle their natural resource income by investing a certain low percentage of the funds wealth in the domestic economy, but the majority will be invested overseas to avoid inflation.
The day to day investments of the fund will be controlled by the Bank of Israel, but the objectives will be determined by a political board.
CHEAPER CLEANER ENERGY
Dr. Amit Mor, CEO of Eco Energy, an economic consulting and investment firm, said the start of gas production at Tamar "will have a very significant importance to the Israeli economy. The direct financial benefits are estimated to be 4 billion dollars per year, increasing to 6 billion dollars by 2020."
Go to Forum >>0 Comment(s)