Israel's Energy Power Grab

http://www.futureofcapitalism.com/2010/08/israels-energy-power-grab

Now that some natural gas reserves have been privately discovered off the coast of Israel, there are noises about the Israeli government making a power grab for the revenues. The Washington Post reports:

the initial euphoria over the prospect of energy independence for Israel is being overshadowed by the dispute between Israeli officials who want to increase the state's share of the profits and U.S. and Israeli investors who say the government's stance threatens Israel's status as a safe place to invest....

Under current law, Israel would be eligible to claim royalties of 12.5 percent of the value of the gas, along with some additional charges....

The Post quotes Rabbi Michael Melchior:

"The state has the right to give concessions to private companies - who should be plenty rewarded for the investment and risks they have taken. But at the same time, we need very drastically to change the proportion so that the vast majority of the income from this goes to the citizens of the state," Melchior said. A former chief rabbi of Norway, Melchior would like to see a Norwegian model adopted in which the state takes the vast majority of the profits.

There's nothing like a government changing the terms of a tax/royalty deal after a gas find.

Thanks to reader-participant-community member-watchdog-content co-creator J.F. for sending the tip.

by Editor  |  Aug 31, 2010 at 10:23 am Related Topics:  Energy, Taxes receive the latest by email: subscribe to the free futureofcapitalism.com mailing list