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No more gas from Egypt? Modeling offshore discoveries and import uncertainty of natural gas in Israel

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  • Siddig, Khalid
  • Grethe, Harald

Abstract

Israel depends on natural gas imports from Egypt for about 40% of its domestic needs, with the remaining met from domestic production. Gas supplies from Egypt have been erratic since their initiation: disruptions have increased after the 2011 revolution in Egypt and have been further ignited by public discontent. Despite these developments, Israeli policy makers have viewed the Egyptian gas deal as a positive factor in preserving peace with Egypt and have had no better alternatives than relying upon it. This has changed, however, after recent discoveries of three major offshore fields that are expected to satisfy domestic demand for an indefinite period and to provide gas for exports. We use an extended global CGE modeling framework that incorporates multiple households and factor ownership to investigate the effects of reduced gas imports from Egypt and the evolvement of domestic gas production as an alternative. In case of reduced gas imports from Egypt, the Israeli economy would slightly retract mainly due to lower production in energy intensive sectors. Poor households would be the most negatively affected, due to the strongest relative decline in income and the strongest increase of their consumer price index. In the case of increasing domestic gas production, Israeli GDP and domestic absorption would rise by about 0.2% and 0.4%, respectively. Poor households would be more positively affected than rich ones due to their composition of factor income and their higher expenditure shares for energy intensive commodities.

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  • Siddig, Khalid & Grethe, Harald, 2014. "No more gas from Egypt? Modeling offshore discoveries and import uncertainty of natural gas in Israel," Applied Energy, Elsevier, vol. 136(C), pages 312-324.
    • Handle: RePEc:eee:appene:v:136:y:2014:i:c:p:312-324
    DOI: 10.1016/j.apenergy.2014.09.019
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    2. Hala Abu-Kalla & Ruslana Rachel Palatnik & Ofira Ayalon & Mordechai Shechter, 2020. "Hoard or Exploit? Intergenerational Allocation of Exhaustible Natural Resources," Energies, MDPI, vol. 13(24), pages 1-20, December.
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    4. Li, Wei & Lu, Can, 2019. "The multiple effectiveness of state natural gas consumption constraint policies for achieving sustainable development targets in China," Applied Energy, Elsevier, vol. 235(C), pages 685-698.
    5. Siddig, Khalid & Grethe, Harald & Abdelwahab, Noura, 2016. "The natural gas sector in post-revolution Egypt," Journal of Policy Modeling, Elsevier, vol. 38(5), pages 941-953.
    6. Athanasios Dagoumas & Floros Flouros, 2017. "Energy Policy Formulation in Israel Following its Recent Gas Discoveries," International Journal of Energy Economics and Policy, Econjournals, vol. 7(1), pages 19-30.
    7. Girma T. Chala & Abd Rashid Abd Aziz & Ftwi Y. Hagos, 2018. "Natural Gas Engine Technologies: Challenges and Energy Sustainability Issue," Energies, MDPI, vol. 11(11), pages 1-44, October.
    8. Griffiths, Steven, 2017. "A review and assessment of energy policy in the Middle East and North Africa region," Energy Policy, Elsevier, vol. 102(C), pages 249-269.
    9. Luckmann, Jonas & Reznik, Ami & Feinerman, Eli & Finkelshtain, Israel & Grethe, Harald & Kan, Iddo, 2016. "Combining the best of two worlds - An integrative water modelling approach," Conference papers 332758, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    10. Noel, Lance & Sovacool, Benjamin K., 2016. "Why Did Better Place Fail?: Range anxiety, interpretive flexibility, and electric vehicle promotion in Denmark and Israel," Energy Policy, Elsevier, vol. 94(C), pages 377-386.

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