State to form natural gas royalties fund YNET

Finance minister’s proposal to form independent fund to manage royalties derived from natural gas sales approved. Interest on revenue’s investments to go to State budget; Treasury to have emergency proxy over funds

Avital Lahav
Published: 10.25.12

The Ministerial Committee on Legislation approved Tuesday a proposal by Finance Minister Yuval Steinitz to set up an independent fund to manage the fees and royalties derived from natural gas sales.

The fund’s creation is meant to counter the possible “Dutch disease” effect – an economics concept that links the increase in exploitation of natural resources to a decline in the manufacturing sector.

Erdan promoting natural resources royalty plan / Chen Pundak, Calcalist
‘If we fail to formulate strategy for proper use of natural sources we’ll find ourselves dealing with a shortage in a matter of years,’ environmental protection minister says
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It also refers to “any development that results in a large influx of foreign currency, including a sharp surge in natural resource prices, foreign assistance, and foreign direct investment.”

The fund will be subjected to a special department that will be formed by the Bank of Israel and will manage all of the royalties derived from the various sales of natural gas harvested off Israel’s shores.

The revenues will be invested in foreign stocks and bonds. The fund will be supervised by a board of directors, headed by the finance minister, as well as by a special BOI committee that will include public representatives.

The interest earned on the investments will be funneled into the State budget. The finance minister will have emergency proxy to use the funds, in case of a national emergency such as war or a severe recession.

“This fund will serve as insurance for Israel, it will appropriate funds for social budgets and will protect the industry,” Steinitz said.,7340,L-4296908,00.html

Erdan promoting natural resources royalty plan – YNET

‘If we fail to formulate strategy for proper use of natural sources we’ll find ourselves dealing with a shortage in a matter of years,’ environmental protection minister says

Chen Pundak, Calcalist
Published: 10.25.12

Environmental Protection Minister Gilad Erdan is currently promoting a plan to regulate royalty payments by Israel’s various industries over their use of natural resources, Calcalist learned.

“The State of Israel issues permits for industrial use of various natural resources, essentially allowing private companies to use the public’s resources. It is wrong for the State to fail to ensure that the royalties paid for these resources reflect their maximum value,” the initiative’s brief said.
Government vs. environment / Prof. Adi Wolfson
The price that industries must pay for utilizing the natural resources that belong to all of us should reflect everything – royalties, eco-taxation and environmental rehabilitation cost. Are the powers that be are selling us short?
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The brief, titled “Strategies for the Effective Management of Natural Resources,” was formulated by Erdan and Finance Minister Yuval Steinitz.

Israel does not currently have a government directorate to manage the setting and collecting of royalties paid for natural resources use. For example: Natural gas, potassium and phosphates are under the Energy and Water Ministry’s jurisdiction, while raw building materials like sand and gravel fall under the jurisdiction of the Israel Land Administration.

“If we fail to devise a strategy for the proper use of natural resources, not only would the State lose unpaid royalties, the industry might find itself short of resources vital to its operations in a matter of years,” Erdan warned.

The brief said that the two ministries will submit a draft plan for the effective management of natural resource for government review within one year, as well as with a plan to ensure the regular supply of critical minerals to the various industries.,7340,L-4295744,00.html