Gas Export Policy Recommendations Submitted Amidst Major Egypt Deal

Israel's Natural Gas Inter-Ministerial Committee has submitted its final recommendations for gas export policy after two and a half years of deliberations. The committee, headed by Energy Ministry Director-General Yossi Dayan, suggests encouraging new gas exploration, maintaining competition within the domestic market, and strengthening international connectivity by opening additional export markets. Energy Minister Eli Cohen stated that natural gas is a strategic asset for Israel, bolstering its political standing and economy.

However, the committee's recommendations face immediate challenges. They were submitted just weeks before national elections, diminishing the likelihood of adoption by the current government, and crucially, just as a major gas export deal with Egypt is on the table. This deal, for approximately 80 billion cubic meters of gas from the Tamar field to Egypt, could potentially render many of the committee's conclusions moot before they are even formally adopted.

The committee recommended keeping the reserve quota for future domestic needs unchanged 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 significant issue left unresolved by the committee is the quantity of gas companies must reserve for the domestic market. The Treasury and Competition Authority proposed a reserve of 13%-20% above expected demand, while the Electricity Authority suggested at least 10%. The Ministry of Energy declined to set a specific figure, leaving the report presenting these differing positions without a resolution.

Public advocacy group Lobby 99 criticized the recommendations, arguing they "abandon the Israeli economy to energy insecurity and high gas prices in the future." They contend that the committee failed to take key steps to delay potential future shortages, such as increasing the reserve obligation, ensuring daily supply surplus, and dismantling the Chevron monopoly.

The Natural Gas Association called for a "stable regulatory environment" without addressing the open disputes. The timing of the report's release, so close to elections and with a potentially outgoing government, raises questions about its practical relevance, drawing parallels to a previous government committee report that was ultimately shelved.