Tamar Natural Gas Field Worth $52 Billion to Israeli Economy – Ernst & Young
The natural gas in Israel’s Tamar field is worth some $52 billion to the Israeli economy, accountants Ernst & Young Israel said in a new report. The CPA firm will present their report at a gas and energy conference in Tel Aviv next week, according to Israel’s Globes business daily.
The initial findings of the study found that Tamar, which began production less than a year ago, boosted Israel’s GDP by almost 0.5 percentage points, and is projected to boost GDP by 1.5 percentage points for 2014.
Ernst & Young found that $42 billion of the total was the result of savings to the economy over the 28-year lifespan of the gas field. The new domestic gas costs Israel Electric Corporation about $6 per million BTU, or a third of the price of diesel, industrial oil, and liquefied natural gas, all of which have to be imported. The direct savings impacts one of the major costs for manufacturers to do business, meaning lower prices, improved competitiveness, and stronger corporate profits.
Meanwhile, the Bank of Israel estimates that each $1 billion less of imports boosts the shekel by 1 per cent against other currencies.
The second component is royalties and taxes on profits for the government from the gas companies, which the report estimates at $10 billion over the life of the project.
The study didn’t include the NIS 3 billion ($1 billion) in costs borne by Israel’s Navy to protect the offshore gas infrastructures, the benefits to the environment for using more natural gas, by far, the cleanest source of fossil energy, nor the gas sector which is developing around the new commodity.