Haaretz: Israel's natural gas bonanza is an illusion, warns British energy expert

The national consensus holds that the discoveries of huge offshore natural gas fields in recent years amount to an economic revolution, one that will put the economy on easy street for generations to come. A leading British energy expert, however, says it's an illusion.

"Exporting gas as LNG [liquefied natural gas] is very expensive. Israeli gas isn't competitive enough to compete with LNG from other countries," says Nick Butler, one-time senior energy adviser to former Prime Minister Gordon Brown, and former vice president for strategy and policy development at British Petroleum Group, in an interview with Globes' Hedy Cohen.

The chief cost in exporting LNG lies in transporting it to market, and Israel is too far away from the major Far East consumers to be able to deliver the product economically, Butler said. "Israeli gas will have to compete with gas from East Africa, Indonesia, Qatar, Turkmenistan, and Australia, and will be the most expensive of all those options," he said.
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