Gas Export Policy Recommendations Submitted Amidst Major Egypt Deal

A committee tasked with examining Israel's natural gas export policy has submitted its final recommendations after two and a half years of deliberations. The report, led by Ministry of Energy Director General Yossi Dayan, suggests encouraging new gas exploration, maintaining competition within the domestic market, and strengthening international connectivity by opening additional export markets. Minister of Energy Eli Cohen stated that natural gas is a strategic asset for Israel, bolstering its diplomatic standing and economy.

However, the committee's recommendations face immediate challenges. The report was submitted just weeks before national elections, diminishing the likelihood of adoption by the current government, which is nearing the end of its term. Furthermore, a significant gas export deal with Egypt, involving approximately 80 billion cubic meters from the Tamar reservoir, was already on the table when the recommendations were finalized. Officials suggest that if this Egyptian deal is approved as is, it could render many of the committee's conclusions irrelevant before a new government can even consider them.

The committee recommended maintaining the reserve quota for future use at 440 billion cubic meters (bcm). This decision was made despite opposition from the Treasury's Budget Division, the Competition Authority, and the Ministry of Environmental Protection, who had advocated for an increase to 515 bcm. A crucial issue left unresolved by the committee is the amount of gas companies must reserve for the domestic market. The Treasury and Competition Authority proposed a 13%-20% surplus over expected demand, while the Electricity Authority suggested at least 10%. The Ministry of Energy did not take a stance, leaving the report to present these differing positions without a definitive conclusion.

Public advocacy group Lobby 99 criticized the recommendations, arguing they leave the Israeli economy vulnerable to energy insecurity and future high gas prices. They contend that the committee failed to take key steps to delay the projected depletion of natural gas resources, which could become noticeable within a decade. The Natural Gas Association, meanwhile, called for a stable regulatory environment without addressing the report's open disputes.

The timing of the report's release, so close to elections, raises questions about its practical impact, drawing parallels to a previous government committee's report that was ultimately shelved. The unresolved issues are likely to fall to the next government, along with the question of how it will handle the decisions that were made.