Israel Debates Natural Gas Reserves for Domestic Needs Amidst Inter-Ministerial Disputes

An inter-ministerial commission, led by Energy and Infrastructure Ministry Director-General Yossi Dayan, has finalized its report on Israel's natural gas policy. The process revealed significant disagreements between government bodies, particularly concerning export volumes versus domestic reserves. The Finance Ministry has criticized the Energy Ministry's economic models, alleging they underestimate future domestic demand to favor gas companies' export ambitions. Budget department officials from the Finance Ministry even boycotted some commission meetings.

The core of the report focuses on the obligation to reserve natural gas for domestic consumption. The Energy Ministry's recommendation is to maintain this reserve at 440 billion cubic meters. In contrast, the Finance Ministry's budget department proposes increasing the reserve to 515 billion cubic meters until viable alternatives emerge, after which it could be reduced to 440 billion cubic meters, allowing for increased exports.

The commission also suggests establishing an excess supply mechanism for the domestic market to foster internal competition. However, disputes persist regarding the precise figures and scale of this excess supply, as well as the authority, whether the government or the Energy Ministry, that will determine it.