Prime Minister Benjamin Netanyahu (Likud) and Minister of National Infrastructure, Energy, and Water Yuval Steinitz (Likud) took part in Tuesday`s meeting of the Knesset Economic Affairs Committee on the government`s agreement with energy companies for the distribution of natural gas from Israel’s offshore fields.
Among the terms of the outline are requirements that Delek Group and Noble Energy sell their two smaller natural GAS reservoirs Karish and Tanin in 14 months, with Delek completely exiting the Tamar basin in six years and Noble diluting its assets there. The document also establishes some pricing schemes and includes clauses for ensuring stability in the sector. Delek and Noble are able to fully remain in the larger Leviathan reservoir, where development has been frozen due to the ongoing negotiations.
Fully implementing the outline now requires that the economy minister invoke a legal clause to bypass objections of the Antitrust Authority. Following former economy minister Arye Deri’s resignation, it became Prime Minister Benjamin Netanyahu’s duty as economy minister to consult with the Economic Affairs Committee prior to activating that clause – known as Article 52.
Committee chairman MK Eitan Cabel (Zionist Camp) opened the meeting by presenting some of his objections to the gas outline. He said the document does not ensure a clear-cut commitment to the development of the Leviathan reservoir, due to the lack of sanctions and enforcement mechanisms. In addition, he pointed out how the outline does not guarantee the construction of an additional gas pipeline to the country’s shores, and cited Bank of Israel data showing that public revenue would be much lower than anticipated.
Regarding foreign policy concerns, he acknowledged the importance of ”tightening political and security relations with Egypt” and of supplying gas to Jordan and the Palestinian Authority. He stressed that he was not convinced, however, that ”if the outline is not implemented, Israel’s security would be undermined or if foreign policy with Egypt would fall apart.”
”At the end of the discussions, I can say here without reservation that we must do everything required to stop this twisted and evil outline for the citizens of Israel,” he said. ”I ask you, Mr. Prime Minister, for God’s sake, do not use the name of security in vain. You do not have any real justification to use Article 52.”
Responding to Cabel’s comments, Netanyahu restated the importance of activating the gas outline for the sake of energy security. He began by discussing how, in November 2013, the cabinet decided to invest NIS 3 billion to secure the country’s economic waters, where the gas infrastructure is located. Although this investment provides some defense, additional protection can be gained through redundancy, the prime minister explained.
”To me, this outline is the only way to create redundancy in the number of fields, rather than shrinking to one threatened field,” he said.
Netanyahu emphasized the importance of pursuing an export program, and the strength that such a capability can provide to a country. ”Securing the supply of gas is vital not only to the functioning of the state, but also to securing its existence,” he said, adding that having the ability to export gas would make it more difficult to impose boycotts against Israel and would make the country much more resilient.
Supplying gas to Israel’s neighbors would be in the best interest of both Israel and these countries, he said, adding a ”layer of stability” that is in everyone’s interest.
”A state that exports critical resources to other countries has much more power,” he said. ”The stronger you are, the more they [other countries] seek you out.”
Addressing Netanyahu, opposition leader Isaac Herzog (Zionist Camp) accused the prime minister of conducting deals that have been ”amateurish at best and lawless at worst.”
”You bypass the regulators for reasons of state security and foreign relations, and it is unclear how this is related to the price of 1 BTU [British thermal unit] for the consumer, which has been set in the government negotiations, or agreements of the Israel Electric Corporation that, today, are known to be outrageous,” Herzog said. ”Therefore, the question arises whether the name of security is being taken in vain.”
National Infrastructure, Energy and Water Minister Yuval Steinitz said he believes that ”there is no other realistic outline aside from this outline,” and that Israeli citizens will surely receive much more than the global average in revenues from gas production.