Israel's Dayan Committee to Publish Long-Awaited Natural Gas Policy Report
The inter-ministerial Dayan Committee is set to publish its final natural gas policy report amid a two-year delay and fierce disputes between ministries over export quotas, domestic reserves, and energy security.
With a delay of nearly two years, the inter-ministerial committee reviewing natural gas policy, known as the Dayan Committee, is set to publish its final conclusions report on Thursday. Once the recommendations are formulated into a government resolution, they will require cabinet approval, likely following the upcoming general elections. However, the next government is not obligated to adopt the recommendations in full, and in the meantime, the natural gas sector has undergone dramatic upheavals and major moves, including a large-scale export deal with Egypt, all occurring without a clear, structured policy.
The Clashes Over Domestic Reserves and Export Quotas
The committee, headed by Ministry of Energy and Infrastructure Director General Yossi Dayan, was officially established in February 2024. According to previous government resolutions, the state is required to periodically review export quotas and domestic market needs once every five years. Consequently, the process was originally scheduled to conclude back in January 2024. The prolonged delay in formulating the conclusions stemmed largely from deep professional disagreements between government ministries. These gaps surfaced openly in April 2025 with the publication of the committee's interim report, triggering a frontal clash with the Budget Department at the Ministry of Finance.
The Treasury raised sharp objections against the economic models presented by the Ministry of Energy, arguing that they underestimated future domestic demand to allow a larger export margin for gas companies. At the heart of the report lies the controversial issue of mandating natural gas preservation for domestic market needs. The Ministry of Energy's recommendation is expected to keep the reserved volume at 440 billion cubic meters (BCM). Conversely, the Budget Department advocates raising the volume to 515 BCM until better energy alternatives are secured, after which it could be lowered back to 440 BCM to accommodate exports.
Energy Security Risks and the AI Data Center Boom
Meanwhile, geopolitical and economic conditions have fundamentally shifted. Amid rounds of military escalation with Iran and its proxies, the defense establishment was forced to order temporary, intermittent shutdowns of Mediterranean gas rigs due to security considerations. These shutdowns exposed the acute vulnerability of the domestic market, which relies heavily on centralized supply sources. Simultaneously, gas partnerships capitalized on the transitional period and soaring global energy markets to advance long-term export deals with Egypt worth tens of billions of dollars, without finalized state limitations and quotas.
Furthermore, the economic forecasts underlying the committee's work have been severely disrupted by the massive surge in demand for constructing server farms to power the artificial intelligence (AI) industry. The volume of requests for electrical grid capacity allocations reached an unprecedented 27,000 megawatts, tripling Israel's total average electricity consumption. Official reports from Noga - Management of the System and the State Comptroller now warn that the national energy grid faces a tangible risk of power shortages by 2036. Despite these warnings, the Ministry of Energy chose to launch the fifth offshore natural gas exploration tender, leaving Israel's most critical economic sector without stable, sustainable long-term policies.
