Natural Gas and Israel's Energy Future Near-Term Decisions from a Strategic Perspective

by Popper, Steven W.; Berrebi, Claude; Griffin, James; Light, Thomas; Min, Endy Y.

• ISBN13: 9780833048868
• ISBN10: 0833048864
• Edition: Bilingual
• Format: Paperback
• Copyright: 2010-03-16
• Publisher: RAND Corporation

Summary

This book discusses the opportunities and risks the government of Israel faces in shifting to a greater reliance on domestic and imported natural gas. By applying newly developed methods for strategic planning and decisionmaking under deep uncertainty, the analysis seeks to help the Israeli government engage in managed change by choosing robust strategies that minimize potential consequences of relying more heavily on natural gas.

Table of Contents

Preface	p. iii
Figures	p. xi
Tables	p. xiii
Summary	p. xv
Acknowledgments	p. xxiii
Abbreviations	p. xxv
Introduction	p. 1
Background	p. 1
Objectives and Approach	p. 2
Outline of This Monograph	p. 5
The Supply of Natural Gas and Other Options for Generating Electricity	p. 7
An Overview of Israeli Supply Sources	p. 7
Specific Elements of Supply: Natural Gas	p. 8
Off-Shore Domestic Deposits	p. 8
Gaza	p. 11
Eastern Mediterranean Gas	p. 11
Other Potential Sources of Natural Gas through Pipelines	p. 11
Liquefied Natural Gas	p. 12
Specific Elements of Supply: Alternatives to Natural Gas	p. 14
Coal	p. 14
Residual Fuel Oil and Diesel	p. 15
Solar-Thermal Energy	p. 16
The Demand Side for Electricity	p. 17
How Large a Role Should Natural Gas Play in Israel's Energy Mix?	p. 21
Robust Decisionmaking: A Different Approach to Planning	p. 21
Determining Criteria for Selecting Robust Natural-Gas-Use Strategies	p. 26
Creating Alternative Natural-Gas-Use Strategies	p. 28
Generating Future States of the World	p. 31
Selecting Robust Natural-Gas Strategies	p. 35
Enhancing the Robustness of Strategies	p. 41
Implications of the Analysis	p. 44
What Natural-Gas Supply-Infrastructure Strategy Is Robust?	p. 45
Criteria for Evaluating Natural-Gas Supply-Infrastructure Strategies	p. 46
Generating Strategies for Ensuring Supplies of Natural Gas	p. 47
Generating Future States of the World	p. 48
Evaluating Performance of Strategies in the Absence of Supply Emergencies	p. 49
Evaluating Performance of Strategies During a Supply Emergency	p. 51
Implications from the Analysis	p. 55
Implications from the Analyses	p. 57
Overview	p. 57
Implications	p. 58
Curbing Growth in Demand for Electric Power Is Israel's First Line of Defense for Energy Security	p. 59
Israel Should Adopt a Two-Stage Planning Process for Decisions on Expanding Generating Capacity	p. 60
Israel Should Primarily Invest in Natural Gas-Fired Combined-Cycle Power Plants, Provided That Sufficient Supply May Be Ensured to Fuel These Plants	p. 61
In Most Futures, Israel Would Be Well-Advised to Obtain Natural Gas from EMG through Long-Term Supply Contracts, If the Fuel Is Competitively Priced	p. 62
Israel Should Prepare for, but Not Complete, an LNG Terminal at This Point in Time	p. 62
Israel Needs to Maintain a Diversified Mix of Fuels, Including Renewable Nonfossil Fuels, for Generating Electric Power	p. 63
The Israeli Government Should Regulate Wholesale and Retail Prices of Domestically Produced Natural Gas on the Basis of the Cost of Imported Gas and to Ensure an Attractive Rate of Return for Domestic Producers	p. 63
Israel Should Guard Against Disruptions in Natural-Gas Supplies by Storing Diesel Fuel, Not Natural Gas, to Smooth Future Supply Disruptions	p. 64
Israel Should Continue with Plans to Build an Inland High-Pressure Natural-Gas-Distribution Pipeline to Parallel the Existing Offshore Pipeline	p. 65
Final Thoughts	p. 65
Bibliography	p. 67
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