In August 2015, the Israeli government passed a plan for developing and distributing natural gas resources, termed the "gas framework," which sparked fierce public debate. Many labeled it "the gas heist," accusing the government of capitulating to tycoons, and some senior officials even resigned in protest. Yet, after a decade, in hindsight it seems the gas reservoirs have delivered: gas prices in Israel are relatively low by global standards, government revenues have already reached some NIS 30 billion - and the figure continues to grow.
The sovereign wealth fund, launched in 2022 to manage revenues from the tax levied on profits from natural resources (including gas), has also begun to accrue funds and is expected to become a key financial engine in coming decades. Just last week, the Tax Authority revised its revenue forecasts upward for royalties from gas and oil profits, following an upward revision of the Leviathan reservoir’s quantities and the addition of the recently discovered Katlan reservoir by Energean. According to the latest forecast, the sovereign wealth fund is expected to receive $57-74 billion over the years.
Yet it's only fair and necessary to ask whether more could have been extracted from this resource that, in fact, belongs to all of us. It’s also important to ask whether, in the rush to exploit the gas, a de facto monopoly has been created that, given its power, may burden Israelis with high prices. Other weighty questions include how much gas should be exported, and whether continued drilling aligns with a world that has already set a clear goal of switching to renewable energies - a debate that goes far beyond matters of revenue alone.
To better understand whether the gas heist turned into an economic windfall - and what the future holds - we burrowed deep into the story of the gas reservoirs and their history.
"There was a powerful lobby against us"
To date, three gas reservoirs have been discovered in Israel, all by Yitzhak Tshuva’s Delek Group and its US partner Noble Energy: Tamar (2009), Leviathan (2010), and Karish (2012). Together, the reserves are estimated to suffice for at least 20 years of Israeli consumption (including exports). But even before the celebrations over these discoveries began to fade, a heated debate began over how much of the gas profits would go to the companies, who carried out the explorations and discoveries, versus the state.
Then Minister of Finance Yuval Steinitz recalls, "I saw reports showing the government’s share was just 20%. Out of 60-70 gas- or oil-producing countries, we were the lowest. Therefore, the goal was to increase the tax rate, but without jeopardizing the project. Of course, the gas companies fought tooth and nail. Their lobby was very powerful. I was even summoned to a warning meeting at the White House."
Steinitz appointed Prof. Eytan Sheshinski to head a committee - later named after him - which set the tax structure for gas profits. In addition to standard corporate and capital gains taxes paid by an Israeli company, the gas companies would pay two specific levies: royalties of 11.5% (net) of revenues for production, and a special levy - dubbed the "Sheshinski Levy" - starting once a company recoups its investment and earns an additional 50% profit, reaching up to 47% tax. These funds do not go directly to the Ministry of Finance but to a sovereign wealth fund established in 2022, aimed at developing the periphery and transitioning to renewable energies.
According to a presentation by the Israel Tax Authority, the state’s total share can reach up to 62%, only after all investment costs and returns are recovered. Khen Elazar, a strategic advisor at consultancy Shaldor (which advises the Natural Gas Authority within the Ministry of Energy and Infrastructure, and the Ministry of Finance), says the figure is reasonable relative to other countries. "In Australia, the government takes about 55%; in Canada, around 50%."
Despite the higher taxes, the initial years saw limited collection due to the time it took to develop Leviathan and Karish. Also, the profits of the Tamar reservoir only recently reached the required level for the sovereign wealth fund. It wasn’t until 2020, when Leviathan began producing, that the special levies exceeded a billion shekels per year. But from that moment on, revenues began to rise rapidly, and by 2024, revenues had reached NIS 3.85 billion, half of which went to the sovereign wealth fund and the rest to the state budget.
Looking ahead, the Tax Authority projects peak revenues to the fund of $2.7-3.1 billion per year (NIS 9-10 billion) by 2031 - more than the combined budgets of the Economy, Agriculture, Tourism, and Environmental Protection ministries. These revenues will decline as production decreases. Overall, the fund is projected to receive $57-74 billion (NIS 190-247 billion). According to a "Globes" analysis, factoring in all taxes and royalties, the total government take is expected to be around NIS 335 billion by 2064 (discounted to present value).
While NIS 335 billion is a vast amount, it should be put in context: in 2025 alone, government tax revenues are expected to reach NIS 506 billion, meaning the gas revenues are equivalent to about eight months of tax collection. The Tel Aviv Metro project, for example, is estimated to cost NIS 150-200 billion. Thus this is a major financial boon, but not one that will enable Israel’s citizens to enjoy an early retirement.
"The party will be over"
These substantial figures stand in contrast to past media claims made since the gas framework was passed. For instance, a few years ago, under the headline "Another Myth in the Gas Debate," journalist Oren Persico quoted Yossi Dorfman, a leading gas protest activist as saying, "Netanyahu promised we’d get hundreds of billions from the gas. Today it’s clear we won’t see hundreds of billions." Similar claims were made in 2016 in "The Marker", when Editor-in-Chief Guy Rolnik wrote, "Where did the ‘hundreds of billions’ Netanyahu promised from the gas go?"
That promise, made by Netanyahu in 2013, is in fact close to being realized. "Within 20 years, Israel will receive NIS 200 billion from the gas," the Prime Minister said at a press conference. Based on current forecasts, this is exactly the sum Israel will have received 25 years after that statement.
Yet major questions remain. Chief among them is the issue of exports. On the one hand, critics argue that Israeli gas should remain in Israel, to dramatically reduce energy prices and preserve reserves for decades. On the other, export profits help fund gas field development and increase government revenues. "Without gas exports, there will be no gas for the local market," Netanyahu once said. "That mistake - surrendering to populism and saying ‘let’s keep the gas for ourselves’ - was made by several countries. And their gas is still buried underground, under layers of populism and bureaucracy."
The "leave the gas in the ground" stance was indeed voiced by opponents. Then-MK Shelly Yachimovich said at the time, "It’s better for the Leviathan gas to stay in the ground. Tamar is enough." In the following years, this position gained traction. In 2019, former MK Miki Haimovich said, "We’re not even supposed to drill for this natural gas… We have the Tamar field. We don’t need more." (Both Yachimovich and Haimovich declined to comment for this article.) Environmental NGO Green Course continued this line of reasoning, stating, "To combat the climate crisis, we must leave 80% of the world’s fossil fuels, including gas, in the ground."
Today, Mor Gilboa, CEO of NGO Zalul and former CEO of Green Course, regrets not having been more forceful: "The mistake environmental groups made back then was being afraid to say outright: ‘leave the gas in the ground.’ The right move now is to design an energy economy that is far more reliant on renewables and much less on gas."
Conversely, Eyal Ofer, who served as an advisor to then-Minister of Environmental Protection Avi Gabbay, criticizes the environmental organizations: "Local gas use is environmentally and economically sound, and brings about energy independence. The environmentalists’ obsession with natural gas allowed the gas companies to say that their goal was to leave the gas in the ground. They lost their way."
However, concerns about exports persist. Advocacy NGO Lobby 99, for instance, warns, "We’re in the good years now with enough gas for domestic and export needs but the party will be over. According to various expert forecasts, in 15-20 years, Israeli gas production won’t meet local demand, and Israel will become import-dependent again." Zalul’s Gilboa adds, "If no new reservoirs are found, Israel will have to import expensive and polluting fossil fuels." Ofer agrees the current framework doesn’t preserve enough gas for future needs. "The Energy Ministry shouldn’t make calculations as if everything ends in 2045. If you project their forecasts to 2064, there’s a serious shortfall."
One of the biggest opponents of gas exports is geologist Yossi Langotsky, known as the "Father of Israeli natural gas" for his contribution to the discovery of the Tamar reservoir (named after his granddaughter). "The energy security of the State of Israel was damaged by the state," he explains. "After the Leviathan discovery, Israel had gas potential for 50-60 years, but today the State of Israel admits that in 20 years there will not be enough gas." His accusations, he stresses, are not aimed at the gas companies, whose goal is to make a profit, but at the government.
"A de facto monopoly"
Another controversial topic is competition and ownership of the gas fields. In fact, this was the main issue tackled by the 2015 gas framework. Among other things, it forced Delek and Noble Energy (later acquired by Chevron) to divest from the smaller Karish-Tanin field, allowing Energean to enter the market. Delek sold all its shares in Tamar and kept Leviathan; Noble reduced its stake.
Prof. Sheshinski, who led the committee on government gas revenues, says, "Energean’s entry was crucial in cutting gas prices. It was a serious saving for Israel, a 15% price drop." Conversely, David Gilo, then head of the Antitrust Authority, resigned over the framework, initially signing an agreement with the gas companies and later retracting after public protests.
Today, Chevron operates both of Israel’s major gas fields, Tamar and Leviathan, which together hold about 90% of the country’s gas reserves. This understandably raises competition concerns. "In the next decade, as Energean’s reserves dwindle, we’ll be facing a de facto monopoly," says Sheshinski. "To prevent that, we need at least two operators. Alternatively, it’s possible to enforce separate sales and negotiations between owners of existing fields to create competition. That would stop monopolistic pricing."
Ilya Katz, until recently the Deputy to the State Budget Director at the Ministry of Finance, supported removing Chevron from one of the fields - a proposal rejected by the Dayan Committee, where the Ministry of Energy has a a majority. Lobby 99 says, "In talks on the framework, people warned that leaving Noble in charge of both Tamar and Leviathan would suppress competition. Now Energean has sold its reserves and is no longer a competitive force. We're back to the monopoly. But there’s still time to fix it - through the Dayan Committee - and bring structural change and remove Chevron from one of the fields. The committee's draft recommendations doesn’t include this step.
David Gilo also takes this position. "The only way to fully resolve the competition issue is to remove Chevron entirely from one field, such as Tamar. Energean, which in any case has already sold most of the Karish gas, could operate Tamar instead of Chevron. If that’s not feasible, then at least require Chevron to sell all domestic Tamar gas to a third party - so that Chevron will continue to own the Tamar export and operating rights - but enforcing separate sales by the partners in each field." He adds this is what should’ve been done back then. "In the meantime, my fears have come true."
Khen Elazar of Shaldor calls this 20/20 hindsight. "The historical mistake was not forcing Noble to divest from either Tamar or Leviathan, as was done with Delek. Those who said so back then were right. But you need to look at the situation as it was then. We were dealing with a very uncertain market. It wasn’t obvious Israel would become a regional gas powerhouse with export contracts to Egypt and Jordan."
What do the opponents say today?
Looking back, Eugene Kandel, who chaired the National Economic Council at the time, is pleased with the framework: "Compare predictions - high prices, no competition - with what actually happened. None of those came true. Karish-Tanin added competition. We separated ownership further and took Delek out of Tamar."
What would’ve happened had the framework not passed?
"We’d have faced international legal battles that would’ve stalled us for years. Leviathan wouldn’t have started in 2020. Tamar wouldn’t have expanded. Noble wouldn’t have sold to Chevron. We’d have faced the Russian invasion of Ukraine with fewer gas fields and we wouldn’t have benefited from low prices while Europe’s soared."
Indeed, the framework’s greatest success seems to be in pricing. While most of Europe pays over $10 per heat unit, in Israel it’s $4.5. According to BDO Consulting Israel chief economist Chen Herzog, the Israeli market’s strength is evident during crises: "During Russia’s invasion of Ukraine, European prices spiked. Here, even when two gas fields were briefly offline, nothing happened. There was no shortage and no price spike."
What do the major opponents of the gas plan say in retrospect? They fall into two categories: Some, like Or-ly Barlev, who was one of the leaders of the struggle against the plan, have no regrets. "We were right in all the warnings, and we saw confirmation of this from the former head of the Energy and Natural Resources Agency at the Ministry of Finance. We had to stand up and fight the Finance Ministry and the Energy Ministry, and of course the prime minister. There is a monopoly in Israel, and the moment the small supplier Energian runs out of gas, there will be no competition between Tamar's Chevron and Leviathan's Chevron. We are running out of gas, and we are starting to talk about how we are preparing for expensive imports. Instead of the public resource serving us for decades to come at a sustainable price, we gave it to the tycoons who built a monopoly here."
Green Course CEO Elad Hochman adds, "The gas heist remains one of Israel’s greatest stories of corruption and abandonment of the public interest. Israelis still pay among the highest energy prices among gas producers. Ten years later, our infrastructure relies on a single pipeline, and connections to local factories are lagging. In an era of high living costs, we’re still paying Chevron’s security bills.
"In terms of exports, it’s clear now that gas must remain for domestic use for two key reasons: Israel’s energy security until 2050, and pollution from gas-fired power plants. Instead of developing renewable energy, the Minister of Energy and Infrastructure, along with the Netanyahu governments, became addicted to fossil gas. Israel is now lagging in adoption of renewables and storage systems."
Others have changed their tune. Capital market expert Erez Zadok, once a vocal opponent to the gas framework says: "I recently approached Yuval Steinitz to apologize for making it personal. I was right about some things, like the Europe pipeline being economically unviable. But with time, I see the gas framework as a net positive. Back then, I was just anti-Bibi, and when everything becomes personal and partisan, it kills real dialogue. If you sit and talk constructively, you can solve anything."
Published by Globes, Israel business news - en.globes.co.il - on July 17, 2025.
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