Israeli Natural Gas Trade Association issues 2024 report on energy security in Israel

Israel is the largest energy supplier in the Eastern Mediterranean and leads OECD countries in the preservation of natural gas for future use, according to the Israeli Natural Gas Trade Association’s 2024 report on energy security in Israel. The report, issued by economic consulting firm BDO, also states that despite record production in 2023, Israel’s natural gas reserves have continued to rise and are currently at an all-time high.

One of the most striking findings in the report is the fact that Israel managed to maintain stability in energy prices during the Swords of Iron War, in contrast to Europe, which experienced a sharp jump in energy prices due to the war in Ukraine. According to the report, while natural gas prices in Israel remained stable and even declined slightly during the months of fighting in the region, Europe suffered a significant increase in natural gas prices of more than 250% following the war that began in 2022. In contrast to Europe, which suffered a severe blow to its energy security, Israel maintained continuity of supply, primarily due to extensive development of production infrastructures and the establishment of natural gas export systems, which made it the most important energy supplier in the Eastern Mediterranean.

According to the report, the natural gas industry contributed to total national savings of NIS 425 billion, constituting monthly savings of NIS 1,000 per household in Israel since 2013. This savings derives from the reduction in electricity prices, which declined by about 15%, while electricity prices in Europe increased by 27%. The report notes that thanks to natural gas, every household in Israel has saved a cumulative NIS 140,000 since the beginning of the natural gas revolution. In addition, the report presents a forecast of tax revenues and royalties, according to which direct state revenues of about NIS 85 billion are expected by 2030, in addition to the NIS 25 billion that has entered the state coffers to date. By 2050, according to the report, state revenues are expected to reach an additional NIS 365 billion. 

Beyond the economic benefits, the report also highlights the significant environmental contribution of natural gas. Since the beginning of the natural gas revolution, there has been a 37% decrease in the intensity of carbon dioxide emissions from electricity production in Israel, making Israel a world leader in this field. Moreover, the intensity of sulfur oxide emissions was dramatically reduced by 89% and the intensity of nitrogen oxide emissions by 79%. These reductions generate national savings in environmental costs of over NIS 220 billion.

The report warns that without continued development of natural gas production infrastructure and investment in the search for new discoveries, Israel could find itself in an energy crisis. In this context, the report states that without the natural gas export policy adopted by all governments in Israel since 2013, there would already be a shortage of natural gas, due to the lack of economic incentive to develop the reservoirs and expand production. The report also recommends a series of measures, including accelerating the deployment of transmission and storage infrastructures, continuing to invest in existing reservoirs and searching for new ones, and ensuring an export policy that balances the energy needs of the State of Israel with the economic and geopolitical benefits deriving from exports.