ISRAEL AT WAR - DAY 150

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Cabinet approves controversial natural gas deal

Environment minister casts sole nay vote; Netanyahu says agreement will bring in billions of shekels for education, health and welfare

Prime Minister Benjamin Netanyahu, second left, and Minister Yuval Steinitz, left, attend the weekly cabinet meeting at Netanyahu's office in Jerusalem on August 16, 2015. (Marc Israel Sellem/POOL)
Prime Minister Benjamin Netanyahu, second left, and Minister Yuval Steinitz, left, attend the weekly cabinet meeting at Netanyahu's office in Jerusalem on August 16, 2015. (Marc Israel Sellem/POOL)

The cabinet on Sunday approved a disputed natural gas deal between the Israeli government and a US-Israeli energy consortium to develop offshore gas fields, the Prime Minister’s Office said in a statement.

“The government has passed the agreement to increase the amount of gas extracted from natural gas field Tamar and the quick development of the Leviathan, Karish and Tanin fields, as well as other gas fields,” the PMO said.

A total of 17 cabinet members voted for the gas deal, and three abstained, notably Finance Minister Moshe Kahlon. Environmental Protection Minister Avi Gabai was the sole naysayer, according to Walla News.

Gabai, appointed by the Kulanu party, is the only minister who is not a Knesset member but rather a professional appointment.

The Knesset will now be tasked with voting through the controversial measure, which supporters say will bring hundreds of billions of shekels into Israel’s coffers but critics fear favors Noble Energy and Delek Drilling too heavily.

Opposition leader MK Isaac Herzog (Zionist Union) downplayed the cabinet vote on the gas deal, hinting on Facebook that it wouldn’t pass the Knesset.

“The vote taken now by the government on the gas deal is a signature on ice,” he wrote. “A government headed by me would decide on a gas deal that’s fair and decent for Israeli citizens that includes price controls and represents the real concerns for the future of the State of Israel.”

An aerial view of the Israeli Tamar gas processing rig 24 kilometers off the southern coastal city of Ashkelon, June 23, 2014 (Moshe Shai/FLASH90)
An aerial view of the Israeli Tamar gas processing rig 24 kilometers off the southern coastal city of Ashkelon, June 23, 2014 (Moshe Shai/FLASH90)

Speaking ahead of the cabinet meeting, Prime Minister Benjamin Netanyahu said the deal would pump billions of shekels into the economy.

“This decision will bring to the citizens of the country, to state coffers, hundreds of billions of shekels. This money will go for the benefit of education, health, welfare and other national needs.”

The prime minister rejected the opposition to the deal as “populism,” while stressing that Israel’s gas reserves must be developed “at full steam.”

Negotiations have been underway with a consortium including Noble and locally based Delek Group, with talks involving natural gas pricing for Israeli reserves and future production.

Noble and Delek have been producing gas from the Tamar field off the Israeli coast since 2013. They have also teamed up to develop the offshore Leviathan field, believed to be the largest in the Mediterranean, by 2019.

The negotiations have been controversial in Israel, with critics fearing regulations would overly favor the companies involved.

Economy Minister Aryeh Deri and a number of other coalition lawmakers cried foul over a separate attempt by Netanyahu to push forward a version of the gas deal earlier in the year, causing the prime minister to abort the vote at the last minute. However, Deri voted in favor of the recently tweaked deal during Sunday’s cabinet meeting.

Under the agreed terms, the Delek Group, owned by Yitzhak Tshuva, will sell its holdings in the Tamar, Karish and Tanin gas fields within six years and Noble Energy will gradually reduce its holdings in Tamar to no more than 25 percent within that same time frame. During those six years, prices for natural gas will be regulated.

The sides also agreed that while the government will be bound to the agreement for 10 years, the Knesset will not be, and may vote on changes to it in the future.

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