Project Better Place continues to build momentum, as the maker of electric cars, has signed up 19 Israeli companies to test the suitability of running their car fleets with electric cars.

According to Globes: “The participating companies cover the gamut of Israeli industry, from high tech to telecommunications, pharmaceuticals, finance, manufacturing, agriculture, and juice. They include Israel Corporation (TASE: ILCO), which has invested heavily in the venture, Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA), Pelephone Communications Ltd., Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR), Matrix IT Ltd. (TASE:MTRX), Direct Insurance - Financial Investments Ltd. (TASE: DIFI), Rafael Advanced Defense Systems Ltd., Netafim Ltd., Keter Plastics Ltd., Orbotech Ltd. (Nasdaq: ORBK), juice maker Jafora Tabori Ltd., Manpower Israel Ltd., SQlink Ltd., Nike Israel Ltd., and Glasshouse Technologies Ltd. Better Place will begin designing the recharging points for the companies’ electric cars and install them at the companies’ parking lots and employees’ homes. It will also work with the companies’ managers and employees in the design and deployment of the infrastructure in order to optimize and customize them to the needs of each company.

Even if it works, the question still remains whether consumers are going to spend more money on an electric car? Also without massive government subsidies, how high will the price of these cars go?

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A lot of attention has been paid to Shai Agassi and his Project Better Place, where he is developing electric cars. Governments are throwing money at his project as if it was going out of style. Environmentalists love anything that doesn’t involve fossil fuels. Of course we have not heard the other side. Price of the cars, the need to have battery stations all over the place and perhaps the most important issue, the creation of mobile electro-magnetic fields which may prove to increase rates of cancer, are all issues that need to be addressed.

That’s why I think that Israel needs to capitalize on the recent massive natural gas discovery, to create cutting edge technologies for natural gas powered cars. After all, none other than T. Boone Pickens himself has called for the US to use its massive natural gas reserves to move from gasoline to natural gas powered cars. Natural gas is cheaper, burns cleaner than crude and is abundant in the US and in Canada, which will help the US not be so dependent on foreign oil. Didn’t that used to be a big issue?

Last summer Pickens announced his own energy plan. It called for a move to wind power( okay so everyone misses the boat sometimes!) and natural gas powered vehicles. My thought is that Pickens has the money to invest and Israel has the superior ingenuity to develop cheap and innovative technologies for the world to move to natural gas cars. With Israel sitting on huge supplies of natural gas, this wouldn’t just be an export business, but rather would be implemented locally as well, which will help wean Israel off of crude, which may be helpful in terms of national security. it will also be a boon to the Israeli economy. Pickens and Israeli hi-tech. Sounds like a match made in heaven.

Pickens is a financial wizard, and if he smells a big opportunity to make money he will invest in it. It’;s time for israel entrepeneurs to step up to the plate and start creating technology to allow for the move to natural gas.

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Indications that the recent find of natural gas of the coast of the Israeli city of Haifa were pointing to a pretty big find. Now it turns out that it may be huge. According to Globes: “The consortium drilling the Tamar-1 well offshore of Haifa has received encouraging news from the drilling operator, Noble Energy (NYSE:NBL), which reported today that flow test results showed that the potential size of the original estimate of 3.1 trillion cubic feet has now been increased 60% to an estimated resource potential of 5 trillion cubic feet. Noble Energy chairman and CEO Charles D. Davidson said, “The test results from the Tamar well confirm our initial analysis that the discovered reservoirs are very high quality. This discovery is clearly of a size for commercial development. We hope to extend the success in Israel by testing Dalit, our second prospect.”

This is so big for Israel, that it’s hard to comprehend. Who could imagine that a country with little in the way of natural resources is now going to be a net exporter of natural gas? Suddenly Israel will be a player, along with its’ enemies in the region, in the global energy market.

I say forget Shai Agassi and his Project Better Place. Israel should convert from gasoline to natural gas to power automobiles. If Israel could develop this technology, it would be huge, as certain parts of the US, Canada could also power their cars on natural gas.

With experts saying that these wells could go commercial in 5 years, I would expect a pick up in Israeli start-ups that are going to tackle the natural gas issue.

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The Israeli company Energtek (EGTK.ob) has developed a new alternative technology allowing motorcycles to be powered with natural gas.

According to a report in the Jpost: “Energtek has developed a system to power two- and three- wheeled vehicles with natural gas. The motorcycles and scooters use gas canisters that can be replaced in less than a minute, without the need for special refueling stations, CEO Lev Zaidenberg said. The technology also makes it more cost efficient to tap so-called stranded gas in reservoirs that aren’t large enough to justify building a pipeline.”

The company plans to target Asia, where there are more than 250 million two- and three-wheeled vehicles. The company plans on doing a private placement shortly in order to fund the initiative, and they claim that they will be profitable in 2010.

It’s funny because Israel never had an auto or transportation industry, but because of the country’s global technological edge in alternative energies, an alternative transportation industry is starting to pop up. From natural gas powered motorcycles to electric cars, as in Project Better Place,  to GreenRoad Technologies, - Zack” Cleantech” Miller’s favorite-who employ a in-vehicle device that improves driver safety and betters fuel consumption for car fleets, maybe just maybe Israel will be the Detroit of the 21st century.

Disclosure: Author’s fund has no position in any stock mentioned as of 7/30/08.

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Aaron Katsman is Managing Editor of the Israel Opportunity Investor newsletter. He is lead portfolio manager for the Israel Growth Portfolio and Managing Director of America Israel Investment Associates, LLC. For more information, go to www.israelnewsletter.com or call 1-888-327-6179, or email aaron@profile-financial.com.

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