The cut-off of Egyptian gas supplies and the faster-than-expected depletion of the Mary B field have cost the Israeli economy $4 billion, according to Doron Cohen, acting director general of Israel's Finance Ministry.
Speaking at an energy conference in Tel Aviv on Wednesday Cohen said $3.2 billion of the cost was for alternative fuels, primarily gasoil and fuel oil, with the remainder in environmental damage.
The senior Finance Ministry official also said the ministry has approved an additional $800 million in emergency aid to state-owned Israel Electric Corp. for the purchase of more gasoil and fuel oil to run its power plants in the absence of natural gas supplies.
On Tuesday IEC chairman Yiftah Ron Tal called on the government to declare an electricity emergency situation in the country due to the severe shortage of natural gas. A decision to do so by the Energy and Water Ministry would enable the utility to be exempted from restrictions on the use of oil for power generation. Ron Tal said the gas shortage has forced the IEC to rely on far more expensive gasoil and fuel oil. The gas shortage is not expected to dramatically improve until mid-2013 when the huge Tamar offshore field is set to begin commercial production.
