Thank you for inviting me to speak. Special thanks to conference organizer Dr. Amit Mor for bringing together such a distinguished lineup of speakers. This conference provides a great opportunity each year to take stock of the current and future trajectory of Israel’s energy sector – something the United States takes great interest in from both an economic and strategic perspective.
The natural gas discoveries off the coast of Israel are a truly exciting development and present enormously significant economic and strategic opportunities. If managed wisely and developed effectively, they will transform Israel from total reliance on energy imports to a net energy exporter. They can move Israel toward energy independence and greater security.
The discoveries also hold tremendous promise for regional cooperation. My good friend and State Department Special Envoy for Energy Amos Hochstein will say more about these possibilities later today. Cooperative natural gas projects can lead to greater regional integration and provide a basis for closer regional political dialogue. For this reason, the United States strongly supports Israel using its gas, in part, to build new trade with its neighbors.
The discoveries of major natural gas deposits off the coast of Israel hold the promise of furthering regional development, especially between Israel and Jordan. Partnerships in energy could bind Israel and Jordan together like never before.
We are proud of the work that Noble Energy, a leading American company, has done in helping Israel make the transition to cleaner, more efficient natural gas, and we want to see more U.S. investment in this sector. We believe that Israel’s growing energy sector will generate new partnerships between U.S. and Israeli companies, offer new opportunities to bolster our already close economic ties, and bring huge benefits – and jobs – to both economies.
We are particularly pleased that Noble Energy and its partners have signed letters of intent to sell gas to companies operating in Jordan, Egypt, and the West Bank, and we are very happy that a U.S. company is helping lead these developments, facilitating solutions to energy challenges in the region, and supporting ties between Israel and its neighbors. These deals are in keeping with Secretary of State Kerry’s vision of economic partnerships: they can cement political gains to the mutual benefit of all parties.
Now, for all the opportunities in Israel’s energy sector, a note of caution is warranted.
As a government, the United States encourages American companies to look to Israel for business opportunities. However, companies today have many places where they can invest their money, and there are many countries vying for a limited number of investment dollars, some with greater resources than Israel’s. Special Envoy Hochstein will describe this context in greater detail later today. The nature of the oil and gas industry is such that, perhaps more so than any other industry, companies need assurance that their significant upfront investment – in exploration and development costs – will yield reliable returns that can sustain their investment and justify project financing. A stable, predictable investment climate is critical to attracting and retaining the investment of leading energy companies.
Therefore, we have consistently encouraged Israel to do more to demonstrate that developing its energy resources is a government priority, and, in addition, that Israel is eager to attract more world-class energy companies to invest here. The timetable for bringing Leviathan gas on-line will be one critical measure of success in this effort. We urge Israel to move quickly to adopt standards and policy approaches that are compatible with U.S. business, which will foster increased bilateral trade and investment. In that climate, the U.S. commitment to helping Israel succeed in developing this new and exciting sector has great potential. For this reason, the U.S. Embassy and Department of State have helped establish a number of energy-related technical assistance activities in collaboration with the Israeli Ministry of National Infrastructure, Energy, and Water Resources; the Israeli Ministry of Transport and Road Safety; the U.S. Departments of Energy and Interior, and the U.S. Coast Guard. We want the United States’ extensive experience and expertise in developing and managing its oil and gas industry to be part of the Israeli success story.
Promoting clean energy and reducing the global carbon footprint is also a U.S. Government economic policy priority. Encouraging more use of natural gas is of course one aspect of this. Another aspect is renewable energy, and we believe it is important for the Government of Israel to develop a strategic plan to develop all aspects of energy, including renewables.
Israel currently ranks at or near the top of countries in the region in terms of installed solar capacity, and Israel’s goal is to reach 10% of electricity from renewable sources by 2020.
Although renewable energy development in Israel has slowed in recent years due in part to the significant natural gas discoveries, the Government of Israel has just approved a major new plan to advance development of renewable energy, including a commercial concentrated solar power project that the Israeli company Shikun v’Binui is advancing in the Negev, with $250 million in financing from the Overseas Private Investment Corporation – the development finance institution of the U.S. Government. We are pleased that U.S. financing can help expand Israel’s solar energy industry.
A number of new smaller solar fields in the Negev already came online in 2014, operated by Arava Power, a U.S.-Israeli joint venture, and several new commercial solar fields are in the pipeline. It is exciting to see that Israel is starting to scale its solar capacity in a significant way, and we believe there are more opportunities for U.S. investment in Israeli renewable energy projects.
I want to close by mentioning one other way that I believe energy could have a powerful impact on the region. One of Secretary Kerry’s top priorities remains securing a lasting Israeli-Palestinian peace. A critical element of this goal is building up a sustainable basis for the economy of a future Palestinian state through the Secretary’s Initiative for the Palestinian Economy. Energy can and should be a key part of this effort. We want to see cooperation between Israeli and Palestinian companies to find energy solutions – from natural gas to solar fields – that benefit Israelis and Palestinians alike. Noble’s arrangement to sell Tamar gas to the Jenin Power Plant is an important first step. The United States supports these efforts because economic progress in the West Bank is in the interest of Israel, the Palestinians, and the United States. We want to see this economic progress in the West Bank, which will support political progress, and we believe that energy should be one of the drivers.
Thank you again for the opportunity to join you at this conference, and for the opportunity for the United States to be a partner in the exciting developments in Israel’s energy sector.