The cabinet announced its plan Sunday to create a sovereign-wealth fund from future natural gas and oil royalties which will invest in education, and protect the country in times of national emergency. Ministers will vote on details of the plan in the coming weeks.

A committee consisting of officials from the Prime Minister’s Office, Finance Ministry and Bank of Israel released its own findings at the cabinet meeting, recommending that around half of the state’s royalties from gas and oil be deposited into the fund.

The committee recommended using the fund to invest in global markets, and allocating a portion of the profits to government-approved education and defense projects. It advised that the Bank of Israel manage the fund under treasury supervision, and be used to provide loans as insurance in the event of war, economic crisis, natural disaster or other catastrophes.

The Sheskinski Law, which was approved in April, set the state’s share of the net profit from the sale of oil and gas at 52.5 percent to 62.5%. The initial levy on companies will reach up to 50%, dependent on the amount of excess profits, while the rate of royalties will stand at 12.5%.

Leviathan, located about 130 kilometers off the coast of Haifa, is estimated to contain some 14-20 trillion-cubic feet of gas worth around $40-50 billion, while experts believe Israel’s total offshore natural-gas reserves are worth at least $100 billion.

Prime Minister Binyamin Netanyahu said in his opening remarks at the weekly cabinet meeting that it would be years before the state reaps the dividends of natural gas finds, but that when the time finally arrives it will amount to a great deal of money.

Netanyahu added that he and Energy Water Resources Minister Uzi Landau examined during a visit to Cyprus last week the possibility of the two countries developing joint natural-gasexport facilities.

Environmental Protection Minister Gilad Erdan argued in response to the committee’s recommendations that oil and gas royalties should be used to monitor the drilling process, so that Israel is prepared to deal with potential marine pollution disasters that could occur as a result of drilling, such as the enormous oil spill in the Gulf of Mexico in 2010.

“The financial and environmental damage from the [2010] Carmel fire would pale in comparison to a pollution incident in the Mediterranean Sea,” Erdan said in a press statement.

“Unfortunately, today we are unable to stand up to such potential damage. We must use part of the royalty funds toward building prevention and coping mechanisms for marine pollution incidents, and not allow them to be swallowed up by the general state budget.”

Also Sunday, Landau rejected as “against the norms of good governance” a press statement sent by Netanyahu’s media adviser announcing the appointment of Prime Minister’s Office Director-General Harel Locker as head of a committee on the natural gas sector.

According to the statement, the committee will examine how to export natural gas to Asia; promote economic ties with other countries; advance the supply of natural gas to the domestic-electricity sector; integrate it into existing industries; and use it to create new industries.

But in a letter to Netanyahu, Landau wrote that this was the first he heard of such a committee, and that its establishment ignored the fact that a committee headed by Energy and Water Resources Ministry Director-General Shaul Tzemach was already examining the natural-gas sector and was expected to submit its own findings in the coming weeks.

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