Israel's Gas Export Dilemma: A Future of Uncertainty

The Israeli government has published the final report of the Dayan Committee, which maps out the country's natural gas market through 2048. The committee's base scenario projects cumulative domestic demand at around 515 billion cubic meters by then, but experts disagree on how much gas to reserve for domestic consumers and how much to export.

The Energy Ministry has emphasized the economic and diplomatic value of gas exports, particularly to Egypt and Jordan, generating significant state revenue and strengthening regional energy ties. However, critics argue that such a system puts too much weight on securing and expanding exports before guaranteeing sufficient supply for the Israeli market.

The report also reveals concerns over concentration in Israel's gas market, with Chevron holding 39.66% of Leviathan and 25% of Tamar, two of the country's largest reservoirs. The Competition Authority has argued that this combination prevents optimal competition, recommending legislation to separate Chevron from one of the reservoirs.

The next government will face a dilemma: whether greater regulatory intervention would improve competition and restrain prices or discourage investment in a market dependent on capital-intensive offshore exploration. A comprehensive national energy plan is also recommended, forcing the government to decide what Israel's energy mix should look like over the coming decades.