The decision to allow 40% gas exports is a wise choice

First and foremost, we all must remember that no matter how we look at it, the natural gas exporting issue is one, of an economic, social and moral importance. The point is that anyone who claims to know for sure what the future holds for the global energy markets (and therefore knowing the exact appropriate amount that Israel should have exported) is nothing but a false prophet.

Naturally, the commercial corporate firms behind the gas discoveries have a vested interest in exporting as much gas as possible because they have to finance the drilling rigs, based on long term bank loans of 15-20 years. In contrast, the state’s interest obviously lies in the development of household gas supply while at the same time in receiving monthly royalty payments for the export.

Setting the bar at 50% would have been unreasonable

However, if in the future cheaper energy alternatives are revealed and Israel wouldn’t have exported any gas by then (as some social movements in fact have demanded), then the best decision for the Israeli public would also be the worst decision because the value of most gas fields would have been significantly reduced.

I believe that the decision to export 40% of Israel’s natural gas is a wise decision because setting the bar at 50% would have been an unreasonable decision in favor of the corporations and against the Israeli economy. The decision made by the government had emphasized the balance of interests between exporters and the Israeli public. Furthermore, we should welcome and note the fact that Israeli decision makers have reached a rather quick decision because the

uncertainty would have caused considerable damage to the Israeli economy.

Imitating the Norwegian model

Now, with the decision to export 40% behind us, the Israeli government is ought to make every effort to ensure that the money received will be wisely invested in the Israeli economy and will serve as a reserve for future economic budgetary and strategic needs of the State of Israel in the coming years – particularly with regard to the vital investment in foreign currency.

I believe that this issue far outweighs the importance the exact number on which the government had decided upon. In this context we must strive to emulate and imitate the Norwegian model because it serves as a good example of some wise and responsible financial behavior.

Norway has established a dedicated corporation created in order to invest the royalty payments obtained from oil exports in a fund that in turn invests them in securities and equities and thus spreading the risk and not investing the entire capital in Norwegian local assets.

The fund, which is managed by professionals, makes sure that when the country’s oil reserves will eventually run out in a few decades – the citizens won’t have to compromise on the living standards they became accustomed to. In order to ensure that such a change doesn’t occur – the fund is already engaged in developing appropriate financial reserves.

We are left to hope that the Israeli government will be strong and wise enough to save the foreign currency received from the export and invest it in the international markets – instead of spending it exclusively on the current needs of the economy. In my opinion, only about 10% -15% of the amounts received should be used routinely for the ongoing needs of the economy whereas the remaining amount should be invested in various international funds for a rainy day

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