Israel says it can’t increase gas exports, prioritizing domestic demand

(Bloomberg) --Israel said it’s unlikely to expand natural-gas exports even as countries across Europe clamor for more supply amid a severe energy crunch.

A government committee responsible for gas policy won’t recommend raising export quotas until more reserves are found, Udi Adiri, chair of the group and director-general of the Energy Ministry, said by phone. That will ensure the country has enough energy for its own use, he said.

Gas companies, which have an export cap of around 40% of annual output, have been urging the government to boost that allowance, citing the small size of Israel’s market relative to its proven reserves. Higher shipments would be welcomed by Europe, where a crippling energy squeeze has driven fuel prices to records.

Delek Drilling LP and its partners made two major gas discoveries in Israeli waters more than 10 years ago, and the development of those reserves has transformed the country’s energy industry. Roughly 70% of Israel’s electricity is generated by gas, while energy companies led by Chevron Corp. are investing millions of dollars in pipelines to export the fuel.

But the government is keen to keep sufficient quantities at home for use as buffer supply as the country ramps up output of renewable energy. It has a target to get 30% of its electricity from green sources by the end of the decade, up from around 10% now.

Israel has been trying to woo other international companies to further explore its waters, with limited success. Any future discoveries would not be bound by current restrictions on exports, Adiri said on Wednesday.