Israel to Maintain Gas Export Policy Amid Fierce Debate
The Dayan Committee, tasked with natural gas policy, has finalized its recommendations, deciding against increasing restrictions on natural gas exports. This decision comes after a significant delay of about two and a half years and amid sharp disagreements with the Ministry of Finance. The committee emphasized encouraging new gas exploration, noting potential interest from a major company like Chevron in Israeli gas exploration.
Despite the decision to maintain the current export policy, the competitive process for gas exploration has been postponed from November to January 2027, with winners to be announced in May 2027. The committee's final conclusions were published about a year and a half after its interim findings in April 2025. The delay was largely due to disputes between the Ministry of Energy and the Ministry of Finance, which advocated for stricter export limitations.
The current policy mandates reserving 440 billion cubic meters (BCM) of gas for the domestic market, sufficient to meet all local needs until 2046 without imports. The Ministry of Finance had proposed increasing this reserve to 515 BCM. The committee also rejected the Finance Ministry's suggestion to separate one of the major gas fields, Tamar or Leviathan, from Chevron, aiming instead to attract more international energy giants.
However, the committee did adopt a principle proposed by the Finance Ministry: at any given time, the gas supply must exceed demand to foster competition and incentivize price negotiation. While the Finance Ministry's specific proposal for a 13%-20% supply surplus over daily demand was rejected, the principle remains. Separately, a request from the Tamar field for an 80 BCM export was deemed "audacious" by government officials due to existing concerns about securing domestic supply for the next two decades.
The committee also addressed the surge in demand for electricity from server farms, which is projected to account for 20% of Israel's total electricity consumption. This demand, driven by the AI revolution and relatively low electricity prices, will strain the power grid and require substantial gas resources, which some committee members view as "indirect energy exports." The Ministry of Energy expects this demand to reach 20% of total consumption, while the National Economic Council argued that gas constitutes only 5% of server farm costs.
