When people around you discuss Israel’s gas deal, do you feel your eyes glaze over in confusion? The Times of Israel feels your pain. Here’s our handy primer of the top ten things you should know about the gas deal.
1. Where is the gas?
There are two small gas fields off the coast of Ashkelon, discovered in 1999, which have about 45 billion cubic meters of natural gas. The major gas fields, Leviathan and Tamar, were discovered in 2009. They’re about 90 miles west of Haifa. Tamar has an estimated 240 billion cubic meters of natural gas, while Leviathan has 450 billion cubic meters. Production began at the sites near Ashkelon in 2004, and at the Tamar site in 2009. The rights to Leviathan are still under negotiation. The gas at the Leviathan and Tamar sites is located three kilometers beneath the sea floor, in a 200-meter wide pocket of natural gas trapped within spaces of the sandstone rock bed or layers of sand.
2. How are they planning to get this gas out of the sea and into my home?
A special underwater drill, perched on a floating platform, drills a well from the sea floor to a depth of three kilometers. Due to the depth of the fields, the gas is trapped under pressure that can be 400-500 times the pressure at sea level. This pressure causes the gas to flow into the well and upwards to a platform above the sea surface. On the platform, the gas is treated, and impurities such as trace amounts of oil or other gases are removed. The treated gas is then shipped via pipeline to Ashdod. Once it arrives on the mainland, a government-owned corporation called Israel Natural Gas Lines (“Natgaz” is its Hebrew acronym) has a network of 430 kilometers of natural gas pipes that snake around the country. This distribution network brings the natural gas to eight power plants and major energy consumers, like industrial zones in Haifa Bay, Dead Sea Works, Ramat Hovav and Mishor Rotem, among others. Right now, the natural gas does not reach your home, because it is prohibitively expensive to lay gas lines across the country. Read more about the technical process here.
3. So if it’s not coming into my home, why should I care about it?
Israel now gets approximately 60 percent of its electricity from natural gas. Environmental activists encourage the use of natural gas, especially in power plants, because natural gas pollutes much less than oil or coal. The Ministry of Natural Infrastructures, Water, and Energy found that in addition to reducing pollution and greenhouse gases, natural gas is much more efficient and can produce almost 20 percent more electricity than coal or oil. The natural gas discovery also has the ability to make Israel energy independent. Amit Mor, the CEO of Eco Energy, an independent consulting company and expert in the field, said that just the Tamar field can supply most of Israel’s domestic needs for the next 15 years. This could have far-reaching implications, turning Israel into a major gas exporter, and making the country energy independent.
4. Is natural gas good or bad for the environment?
Environmentalists generally favor natural gas over other energy sources. “The discovery of natural gas is a blessing, we have it so we don’t have to use coal and oil,” said Green Course activist Ely Abramovitch. “We don’t only support gas usage, we also support making it more widespread.” Abramovitch added that in an ideal world, Israel would eventually move to renewable energies other than natural gas. However, he knows this will take a long time. Solar energy currently only provides 2% of Israel’s electricity, said Mor. So for now, he’d rather see more factories use natural gas rather than coal.
5. So if environmentalists support gas, what are all the protests about?
“We want to bring to light the undemocratic activities around the gas deal,” explained Abramovitch. Environmental group Green Course is one of the leaders of the umbrella group of environmental organizations that hold weekly protests on Saturday nights to protest the gas deal.
In the spring, activists were incensed that the details of the gas deal were not released to the public – or even the Knesset members themselves, until external pressure forced Netanyahu to reveal the terms of the gas deal on June 30. “The public realizes the gas deal is dangerous for Israel. It allows for quick export of Israeli gas and will leave us without gas in the future,” said Abramovitch.
This past Saturday night on November 14, more than 10,000 people gathered in Tel Aviv to protest the gas deal, the largest in recent months. Activists also staged protests in 15 other cities around the country. Abramovitch credited the recent three-part TV documentary “Silver Platter” with bringing the complicated issue to the forefront of the public’s mind. The main speaker at the Tel Aviv rally was Prof. Yaron Zelekha, the former accountant general in the Finance Ministry who also stars in the second part of Silver Platter, who called the gas deal “organized robbery.”
“Over the past months we have opened the public’s eyes to the way the government is despoiling the greatest national resource ever discovered here, after dividing it up among a group of magnates almost without consideration,” Zelekha said, according to Globes. “This is a monopoly that is selling our own gas back to us, that it received for nothing. They say it’s worth making concessions for the sake of Israel’s geostrategic standing, but Netanyahu has tuned Israel into the country with the most expensive housing in the West. The country in which cars are the most expensive in the West. The country in which food is the most expensive in the West, and now the country with the most expensive gas in the West and it’s our gas.”
6. So what’s all this talk about Article 52?
In December, then-antitrust commissioner David Gilo ruled that the Delek-Noble conglomerate that is developing Leviathan may constitute a monopoly, sparking a vociferous national debate on the terms given to the energy companies. Under Article 52 of the Antitrust Law, only the economy minister may override the antitrust commissioner’s ruling and give a special dispensation to a monopoly to operate in Israel if, for example, it is essential for security concerns. For the past year, Aryeh Deri (Shas), who until just recently was economy minister, has refused to give that dispensation, and Netanyahu failed over the summer to pass a Knesset vote transferring his “Article 52 authority,” as it is known, to the broader cabinet.
Gilo resigned in May over Netanyahu’s decision to push the current deal through, saying that the deal would not promote enough competition in the natural gas sector. Public outcry and intergovernmental conflicts forced Netanyahu to bring the gas deal to the Knesset for a vote, which he had hoped to avoid since he was not certain he could get a majority. The Knesset passed the deal on September 7, by a 59 to 51 vote.
Even after the Knesset vote, the gas deal must still either get approval from the Antitrust Commission or the economy minister must invoke Article 52. Deri refused to be the first minister to exercise this clause, and resigned in a widely anticipated move on November 1.
Deri is now minister of the Development of the Negev and Galilee and Periphery while Netanyahu took control of the Economy portfolio, in addition to the other three portfolios he already held: Foreign Ministry, Communications Ministry, and Health Ministry. “In order to proceed with the (offshore gas) agreement the ministry will be transferred to me and I will give the green light” on a deal outline with an energy conglomerate to develop offshore gas fields, Netanyahu said on November 1.
7. So what, exactly, does the gas deal say?
Under the terms of the outline, the Delek Group will sell its holdings in the Tamar gas field, as well as two smaller, as-yet undeveloped fields about 120 kilometers off the Haifa coast called Karish and Tanin, within six years and Noble Energy will gradually reduce its holdings in Tamar to no more than 25 percent within the same time frame. During those six years, prices for natural gas will be regulated. Shaul Amsterdamski, a journalist with the economic Calcalist newspaper, explained that the current deal focuses on the issue of the duopoly between Nobel and Delek, not specific percentages about the revenues of the gas. “The question of who will get what from the gas, that was already solved in 2011 with the Sheshinski Commission, so that question is not relevant any more,” he said.
8. What does Bill Clinton have to do with this?
According to some sources (with the company denying that this was the case), Bill Clinton has lobbied for Noble Energy in the past directly with Netanyahu. When the size of Leviathan was announced in 2009, taking everyone by surprise, then finance minister Yuval Steinitz said the country needed to renegotiate some of the tax breaks and other terms of the exploration contract. Previously, Israel was forced to offer appealing tax breaks to any company that wanted to explore offshore natural gas because it was so prohibitively expensive to explore, and the chance of success was unknown.
But Leviathan was larger than anyone imagined. “We definitely didn’t have a set of regulations that were suitable for the level of discovery,” Professor Shimon Feinstein, a professor of geology at Ben-Gurion University of the Negev, explained in August. “We’re caught in this very embarrassing situation where we sold a lease for exploration with certain conditions, and due to the huge discovery which were beyond our imagination, we decided ‘Oh, we made a mistake,’ and we are changing the rules of the game after the game was over.”
That’s exactly what Bill Clinton accused Netanyahu of doing. According to the Wall Street Journal, a Clinton aide said Clinton raised the issue in a private meeting Netanyahu in New York in July 2010. “Your country can’t just tax a US business retroactively because they feel like it,” Clinton told Netanyahu, according to the aide. When Clinton spoke at the 20th anniversary of Yitzhak Rabin’s assassination at Rabin Square on October 31, 2015, some members of the crowd booed him due to his lobbying efforts for Noble Energy.
A Noble Energy spokesperson denied Clinton was ever a paid lobbyist for Noble.
9. What about Egypt’s offshore natural gas?
In August, an Italian company exploring off the coast of Egypt announced the discovery of a “supergiant” natural gas field, one of the largest ever found in the Mediterranean that could have as many as 2,500 billion cubic meters, according to Eco Energy’s Mor (for comparison, Israel’s offshore fields hold approximately 1,000 billion cubic meters). This is a boon for Egypt’s struggling economy, but problematic for Israel, which had hoped to export natural gas to Egypt.
The domestic market for natural gas in Israel and the Palestinian territories, which are dependent on Israeli infrastructure, is approximately 8 billion cubic meters per year. This could increase to 12 billion cubic meters per year as more businesses and factories are connected directly to gas, Mor explained. “Developers and partners need an export market,” he said. Israel and the West Bank alone are “too small to economically justify a multi-billion dollar development,” Mor added. He estimates it will cost approximately $6 billion-$7 billion to develop the Leviathan field, but companies will only invest that money if they can be ensured a stable export market. While there has been some talk of a joint Italy-Egypt-Israel agreement, another option is to turn to Turkey. Mor noted that a deal with Turkey makes a lot of economic sense but faces political hurdles due to the strained relationship between Israel and Turkey for the past several years.
10. What about the security issues relating to the offshore gas?
The biggest security issue right now is that there is one single pipe leading from the Tamar gas field to the Israeli shore. “If there is a technical problem, or a missile from Hezbollah or Hamas, all the Israelis and Palestinians are going to sit in the dark,” said Mor. “For national security purposes, it’s crucial to develop another pipeline so we can develop more fields in the future.” Mor would eventually like to see four separate pipelines from the Tamar and Leviathan fields, though others say three could be sufficient. The companies that develop Leviathan would be responsible for laying additional pipelines.
Amsterdamski, the journalist with Calcalist, said the issue of the single pipe is the main problem that Israel must address. “It’s a problem economically because it means there’s a monopoly, and also there’s a problem if something happens,” he said.
Times of Israel staff contributed to this article.
Editor’s note: An earlier version of the article stated that Bill Clinton was a paid lobbyist for Noble. A Noble spokesperson denied he was paid.