ABSTRACT
The obvious monetary benefits to the economy of using domestic natural gas instead of imported coal and oil – reduced fuel costs for electricity generation and the production costs in energy-intensive industries – cannot be overemphasised. Natural gas in electricity generation and industrial production has significantly reduced the emission of contaminants to the environment, thereby reducing the sizeable indirect cost associated with pollution and health damage. The transition to natural gas is expected to result in increased energy efficiency and a reduction of around 10 percent of Israel’s energy costs (net investment and maintenance costs) in the long term, which is likely to contribute to the global competitiveness of medium and low-tech industries. Besides, demand is expected from the petrochemical sector that will use natural gas as a feeder, engendering secondary industries that use petrochemicals and their derivatives. The use of CNG in heavy fleet vehicles is being subsidised by the government and trial runs have already begun. A dogged concern associated with the natural gas market is the appreciation of the shekel, reducing the competitiveness of the domestic manufacturing and exports. To circumvent this phenomenon known as the ‘Dutch Disease,’ the Israeli government has established the SWF to invest gas proceeds in foreign assets. To promote the use of natural gas in the economy, financial incentive to light industrial customers to switch from oil to gas is on the cards.
