Ladies and Gentlemen, good afternoon,

The topic on which I was asked to speak is the activity of the Government of Israel, the Ministry of Infrastructures, in the area of security of the energy supply.

It seems that there is no need to go into depth regarding the existential dependency of each and every one of us on energy of various types. Imagine for yourselves a world in which petroleum, gas and coal are used up, technologies for the production of electricity through alternative energy are not being developed at a level that will meet energy demands, the ability to produce electricity is diminishing, as well as the ability to operate machines, vehicles, et cetera.

The pessimistic forecasts predict that within 40 years, we will be dealing with a worldwide lack of oil. It is obvious that we are talking about an extreme scenario. But even less extreme scenarios are not at all encouraging. For example, imagine for yourselves a drastic increase in fuel prices, to such a level that would be a real problem for the proper functioning of the economy.

In recent years, more and more Western countries are recognizing the importance in creating an appropriate level of security for the orderly supply of energy to their territory.

This is even more correct regarding Israel, mainly due to the problematic geopolitical position of our country on one hand, and the fact that the major portion of worldwide energy sources comes from Arab countries.

The Ministry of National Infrastructures, as the body charged with securing the supply of energy sources for our economy, is acting on a number of levels in parallel, in order to reduce the fear that the scenarios I mentioned earlier will be realized.

For the past two years, the ministry has been in contact with the government of Turkey, with the aim of establishing an “infrastructure corridor” from the Jihan coast in Turkey to the Israeli coast.

Turkey is a country of eminent strategic importance for Israel, from a political standpoint as well as with regard to energy. Due to its location, Turkey has relatively easy access to sources of energy and water. Just half a year ago, the BTC pipeline was inaugurated in Turkey. This is a huge project for conveying oil through a 1700-kilometer-long pipeline from Azerbaijan via Georgia to Turkey. From there, the oil is marketed via tankers to the countries of the world, mainly to the US.

The infrastructure corridor that I mentioned above is planned to be a continuation of this project. But more than that, the infrastructure corridor will include pipelines for the conveyance of natural gas, oil, water, and perhaps even electricity, from Turkey to Israel.

Last month, I invited the Turkish energy minister, Dr. Hilmi Golar, to Israel. In our meeting, we signed a memorandum of understanding that outlines the governments' path of action towards furthering the project, with the first step being a feasibility study regarding the technical and economic capabilities to carry out this ambitious project. At the same time, I reached an agreement with the European Union Commission on its support for the project, and, as a result, I am working with the European Investment Bank – the EIB – to obtain financial assistance for carrying out the project.

The establishment of this project will ensure Israel a regular supply of energy and water. But more than that, connecting the infrastructure corridor to the Eilat Ashkelon Pipeline Company's oil pipeline could create an opening for exporting oil via the Gulf of Eilat to the Far East. Inquiries on this issue from countries of the Far East have been received by my office recently.

Regarding natural gas, Israel is at the height of a revolution, whose main focus is the integration of natural gas into the electrical and industrial economy, as an alternative to pollutant and expensive fuels such as gasoline and diesel.

In 1999, the first natural gas deposit was discovered off the coast of Ashkelon. Today, this gas serves theIsrael Electric Corporation Eshkol and Reading power stations. In addition, in May 2005, I signed a memorandum of understanding in Egypt with the Egyptian oil minister, which serves as a framework agreement for the import of Egyptian natural gas to Israel for the next 20 years. Further to the memorandum of understanding, the Israel Electric corporation signed a trade agreement with the Egyptian company EMG for the supply of natural gas via a pipeline that is currently being established from El-Arish, in the Sinai, to Ashkelon.

At the same time, the country is conducting intensive negotiations with British Gas, which holds a natural gas field that was discovered off the coast of Gaza.

In addition, in a meeting I held a few months ago with the President of Azerbaijan, I raised the possibility of importing natural gas from Azerbaijan’s vast reserves to Israel.

However, all of this is not enough. In accordance with the National Infrastructure Ministry’s forecasts, the level of demand for natural gas in the economy in the next decade already justifies the identification of additional natural gas sources. In light of this, the Mediterranean Sea has once again been opened to the search for gas, and there are currently a number of potential reserves to be drilled.

Moreover, for the past two years, the National Infrastructure Ministry has been in contact with the Russian gas company Gazprom, for the purpose of importing natural gas to Israel.

Lastly, I will mention, in this regard, that the ministry is currently carrying out investigations towards the publication of a tender to establish a facility to liquefy natural gas (LNG), which will enable the import of natural gas to Israel in a condensed liquid form by ship from any point on Earth.

Regarding the development of renewable energy, Israel is regarded as one of the leading countries in the world in developing technologies to produce electricity through renewable energy, mostly in the solar field. In order to encourage the use of renewable energy in Israel, I will be publishing renewable energy standards that will grant a premium to those producing electricity from energy of this type. In addition, the establishment of a solar power station in the Negev with an initial output of 100 megawatts and a final output of up to 500 megawatts is planned for the next few years.

However, in the situation as it exists today, and taking into account the economic cost of producing electricity through renewable energy, production by these technologies cannot comprise a complete alternative to production by burning fuels. But I believe that the situation will change towards renewable energy as the technology advances.

Thank you very much,

Binyamin (Fouad) Ben Eliezer