09/20/2010 04:29

Plan calls for an NIS 200 million annual project budget to encourage research, support companies in the field and foster international cooperation.

The cabinet discussed on Sunday a proposed ten-year national plan to fund research into alternative fuels in the hopes of reducing world dependence on oil. The plan calls for an NIS 200 million annual project budget to encourage research, support companies in the field and foster international cooperation.

This was the first discussion of the new plan at the cabinet level. There are still some issues to work out prior to final approval.

At the start of the cabinet meeting, Prime Minister Binyamin Netanyahu stressed the importance of the project.

“We will discuss something which is important to Israel’s security, to our economic security and at the end of the day affects our geo-political standing.

The State of Israel will invest over the next decade close to NIS 2 billion to develop alternatives to oil for transportation.

Already at the beginning of my tenure as prime minister, I discussed this issue and I asked [National Economic Council head Dr.] Eugene Kandel and the relevant ministers to consolidate and create a framework in which we can begin to provide solutions to alternatives to automobile fuel.

“Fuel for vehicles represents a vast amount of the oil energy in the world. Because of the varying price of a barrel of oil, until now no concerted effort to find alternatives has ever been launched. If alternatives were sought when the price of oil was high, when the price of oil dropped, these efforts were stopped.

“Therefore, it’s hard to rely on private companies and regular research facilities to lead and complete such studies and therefore there’s a need for the government to step in. But not all governments are equally obligated to find such a solution,” the prime minister said.

Israel was uniquely suited to take on this task, he contended.

“We are a small country which suffers from oil dependence more than any other. We are perhaps a small state in terms of its geographic measurements – but we are a large country in terms of science, research and brain power. Therefore, the point is to consolidate research, and money – to put in lots of strong research, science and technology and to bring in other organizations, similar organizations abroad lead by Israel.

“This is a national and strategic priority, because the dependence on oil producing countries among Western nations harms the standing and security of Israel. And of course, it causes serious damage to the environment.

Forty percent of greenhouse gases are caused by using oil, and therefore, there are many aspects and advantages to finding good alternatives to oil for transportation, and we, in effect, are launching the first discussion so that afterwards we can take practical decisions to move this important research forward,” he continued.

“We must work together to solve some issues which have yet to be worked out. There are still differing viewpoints as to how to organize these efforts and I plan on solving these problems and moving forward this project which is so important to the State of Israel, its security and its economy,” Netanyahu said.

The difficulties he was referring to is a dispute between the plan’s creators and the National Infrastructures Ministry. The plan itself calls for a project manager and appropriate staff to be created within the Prime Minister’s Office. However, the ministry contends that it is the natural home for such a project.

The main thrust of the plan is to encourage research by providing NIS 60m. of government funds a year toward R&D, which would hopefully be tripled by private donors. Support, both monetary and logistical, would also be provided to companies active in the field.

The plan also calls for international partnerships both in research and implementation.

The plan’s authors also stressed the need for one-stop shop bureaucracy so as not to bog down the scientists with a multitude of forms and applications for receiving the funds.

Joshua Yeres, Giza Singer Even’s analyst agreed with the plan in principle but said that it should be expanded to include additional technologies.

“The plan definitely makes a lot of sense and I agree with the findings: there are quite a lot of relevant Israeli technologies being developed in this space and as pointed out many/most of these technology companies are lacking necessary funding. The market is a global market therefore the plan wisely supports the concept of international cooperation.

“Having said that, the subject is very broad, meaning that the funding shouldn’t be necessarily limited to alternative fuels or electric cars but should be wide enough to include other technologies (wind, solar, energy storage, grid management etc). How to do that? I recommend to use “sustainability” as the relevant test.

“Let’s not forget that the recent forecasted natural gas finds provide Israel with a very relevant alternative to imported oil. Wide spread use of natural gas (supported by robust infrastructure) can substantially decrease Israel’s dependence on oil used presently for industry, trains (remember the plans for moving the Israeli Railway over to electricity), municipal mass transit, adoption of CNG (compressed natural gas) in vehicles, and even by converting methane from natural gas to methanol, or GTL (gas to liquid).

“10 year plans are nice when announced – but a 1 year plan when fulfilled is even nicer. Various Israeli governments have made various announcements regarding infrastructure issues, one of the more famous ones being the plan to have 10% (or was it 20%) of electricity produced by 2020 to be from alternative energy sources. In the meantime, we continue to read about the difficulties facing entrepreneurs in the Solar and Wind power sectors regarding regulatory issues and permits. But in recent weeks, I feel a breeze of fresh air with things starting to happen (hopefully) including (all since July) the PUA’s announcement regarding updates tariffs and limits for PV facilities, progress in the PUA’s public hearing regarding Wind Power facilities, publication of the MNI’s national plan for energy efficiency and now this.

“Hopefully this plan, when implemented, will provide the necessary boost to the sputtering Israeli technology sector.”