Legislators Folding on Gas Royalties

Finance Committee discussing compromise that would lower gov't take further.

It seems the pressure applied by the oil and gas exploration outfits worked. Knesset members are seeking to further compromise on the country's take from natural gas finds. A compromise is in the works that would set it at only 45% to 52% of the companies' profits, compared to the 52% to 62% advised by the Sheshinski committee, which recently delivered its final recommendations on future government policy toward royalties for exploitation of natural resources.

In its interim report, the committee, headed by economist Prof. Eytan Sheshinski, had recommended that the state's take be even higher - as much as 70%.

Gas protest outside PM's office Jan. 11, 2011 (Emil Salman)
Emil Salman

The committee and its chairman drew criticism in the press and public for softening its recommendations in its final report.

The compromise was proposed yesterday by Likud MK Zion Fanian.

The Knesset Finance Committee is scheduled to discuss the Sheshinski committee's recommendations on Monday. Fanian, the coalition whip in the committee, recently met with Delek Group controlling shareholder Yitzhak Tshuva to discuss the recommendations.

Tshuva suggested the compromise after other committee members, including party colleague Miri Regev, objected to implementing the recommendations.

Fanian reportedly said it would be possible to get majority support for such a compromise deal; other coalition members have said over the past few days that such a deal should be reached with the gas companies.

The committee has 17 members, and eight already have said that they support the recommendations drafted by Sheshinski. They include committee chairman MK Moshe Gafni (United Torah Judaism ).

Knesset members are apparently waiting for Prime Minister Benjamin Netanyahu to signal whether he supports the recommendations.

Knesset Economics Committee chairman Carmel Shama-Hacohen accused some Knesset members yesterday of "acting like the gas companies' lobbyists," although he declined to name names.

"If politics overrules the Sheshinski recommendations then Finance Minister Yuval Steinitz, who initiated the committee, needs to resign," Shama-Hacohen said.

Almost half support findings

These Knesset members may not have the public's backing: 48.3% of the public supports the committee's recommendations, according to a survey conducted for the government. While 26.7% of respondents said they had no opinion on the matter, another 14.3% said the recommendations are slanted in the gas companies' interest, while 10.9% said they hurt the gas companies.

The survey included 509 respondents, who are considered a representative sample of the population.

As of December, only 37% of respondents knew about the Sheshinski committee, the survey found. Now, 61% of respondents knew of its existence and what its job was.

If you eliminate the people who have no opinion on the matter, a full 65% of respondents support the Sheshinski recommendations.