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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With the Democratic National Convention in full swing, expect much attention focused on alternative energy, Cleantech and environmental issues. After all, House Speaker Pelosi has mentioned that her goal is to save the planet and Al Gore will show up and do his usual speech on how global warming will destroy the planet if we don’t do anything ASAP. I don’t want my cynicism to show through but have the DNC and Obama’s organizers taken any measures to ensure that this convention is environmentally friendly? How much energy is being used to run the event? Just asking.

Anyway, a great article out in the Jpost today about how Israel is on the way to being a world leader in Cleantech. While Shai Agassi’s electric car initiative has gained many headlines around the world, Israel is also very quietly making strong inroads, in solar and water technologies. The article focuses on how Israel is developing the technology for the purpose of letting larger nations do the implementation. Much like the current technological revolution, Israel has been behind many of the advances that have powered us forward. The view is that Cleantech will be Israel’s next boom industry as technologies will be developed that power a move away from crude oil towards alternative energy sources.

The article quotes Isaac Berzin, an expert in using algae to curb greenhouse gases: “Israel should be a world leader - creating the solutions the world is looking for. Investments are coming to Israel [as a result] and lots of jobs are created. Let’s say you develop a major solar technology, which is cost effective etc. What’s the demand for electricity in Israel? A small fraction of world demand. If your only output is Israel then you are in trouble. Hi-tech was great for Israel. Where were the markets? Out there, which is absolutely fine.”

It’s interesting that the one thing Israel lacks is natural resources. The one thing Israel has loads of is brainpower, ingenuity and entrepreneurship. Isn’t it ironic that Israel is using its’ main resource to try and level the economic playing field by developing technology that will greatly lessen the need for natural resources.

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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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