The Israel's Gas Exports Will Affect Israel's Economy

Michael Sarel, former ministry of finance chief economics said ; exporting about 400 BCM natural gas will definitely cost economy billions dollars.

According to former ministry of finance chief economist, that resigned due to his opposition to 0% VAT plan for new apartments , described to Knesset Economics Committee regarding to his decision of opposed the Israel's natural gas exports. He asserted that the decision of government in export about 400 BCM gas will definitely cost economy billions of dollars in damage. Sarel declared that the decision of state in exporting gas would be based to significant methodological error.

While the Tzemach committee demand in keep enough gas for next 20 to 25 years, while also allow the rest for certain case to be exported. Actually it wont work however, taking public benefit's maximization into account. Would be worthwhile for in case in export whole gas then use the money to build certain nuclear power station or for importing another gas, for the opposite also can be true.

Karnit Flug, Israel's Bank Governor stated that Israel would never receive 60 % gas revenue. While according to Sarel, that benefit maximization in function being used by calculation, in 3 variables

1. benefits from gas uses
2. benefits from state's revenues
3. benefits from gas companies' profit

 The 2 main key assumptions also were taken into account , that are ; export price of gas also interest rate in discounting. Sarel adding, calculation by using a price $5.80 per energy unit over local market, export price was taken into $7 by pessimistic scenario also optimistic scenario by $9. It was 2.6%-4.6% for discounting interest rate, which both are optimistic now. Gas export price could be same equal to domestic market, while discounting rate fallen to1.6%.

Sarel also added ; it is definitely being argued, in where gas would not much developed without export, but could be true. Would be enough for banks if ever 100 BCM or 200 BCM gas being exported, in the concept of needing no export over 400 BCM.