JERUSALEM (AP) — Five years after Israel signed a landmark agreement to develop large offshore gas fields over the objections of antitrust authorities, environmentalists and consumer advocates, ordinary Israelis have yet to see the windfall promised by the government.
The deal has chiseled away at the monopoly held by Houston-based Noble Energy and Israel’s Delek Group, which discovered and developed the fields, bringing prices down. The country is on track to phase out coal and derive nearly all its electricity from cleaner-burning gas and solar power by 2025, and is exporting gas to neighboring Egypt and Jordan.
But the financial benefits have yet to trickle down to Israeli consumers, who continue to pay stubbornly high electricity costs even as oil and gas prices have plunged in recent years.
As the scramble for natural gas creates new alliances and rivalries across the eastern Mediterranean, Israel’s experience shows that while big gas discoveries can yield geopolitical clout they don’t always deliver the riches promised by politicians.
The government says the gas reserves have turned Israel into a regional player and solidified ties with two Arab neighbors. Israel has also teamed up with Cyprus and Greece for a planned $6 billion pipeline to Europe, strengthening its position as it prepares to hold rare talks with Lebanon this week over their disputed maritime border.
But the so-called EastMed pipeline has heightened tensions with Turkey and is fraught with political and logistical challenges. It could prove infeasible if gas prices remain low and Europe accelerates its shift to renewable energy.
At the time of the 2015 gas deal, Prime Minister Benjamin Netanyahu promised “hundreds of millions of shekels for education, welfare, health and for every Israeli citizen,” but a hoped-for sovereign wealth fund has yet to materialize because revenues have been lower than expected.