Government approves new draft of troubled gas deal

Government ministers on Sunday approved on a new version of a controversial gas deal which now includes a clause enabling future governments to alter the terms agreed with drilling companies — a stipulation whose omission in a previous agreement text led to the High Court blocking its progress.

Speaking before the weekly cabinet meeting, Prime Minister Benjamin Netanyahu explained that the revised document took into consideration comments handed down by the court.

“At the moment, the important thing is to not delay, to move forward, and to get the gas which also brings enormous resources to the citizens of Israel — in welfare, education, in health, and in fact in every aspect of life.

“I think this is a most important step, even historic, for Israel’s economy and in particular for the citizens, and we are using the gift that nature has given us for the benefit of the state and its citizens.”

Energy Minister Yuval Steinitz announced the changes in the “stability clause” last Wednesday.

The new draft deal allows future governments to amend the natural gas agreement should they find it necessary, which boosters hope will pave the way to finalizing a deal to develop massive offshore gas fields.

In March the High Court of Justice ruled that a deal with a US-Israeli consortium to extract natural gas from the fields would be canceled within a year unless the stability clause, which barred future governments from altering the agreement, were changed.

The ruling put a major damper on efforts by the state to approve the agreement and override opposition by the state regulator, putting the brakes on a deal touted by the government as having the potential to bring hundreds of millions into state coffers and transform the country into a regional energy powerhouse.

The court, however, suspended its ruling for a year to enable the Knesset to amend the agreement.

Prime Minister Benjamin Netanyahu has made the gas deal a centerpiece of his agenda, saying the discovery of large reserves would bring energy self-sufficiency and billions of dollars in tax revenues. But critics said the deal gave excessively favorable terms to the government’s corporate partners.

Activists have been furious with the gas deal’s lack of transparency, including the “stability clause,” which meant that the government could not impose regulatory changes, such as breaking up suspected monopolies, on the consortium for a full 10 years.

The deal came after a year of the prime minister performing political cartwheels to override Knesset and public opposition to the deal, which, critics claim, will create a monopoly in the gas market and lead to higher prices for Israeli consumers.

In February, Netanyahu went before the court and urged that the deal be approved, saying it was critical to ensuring Israel’s security and economic position in the Middle East.

If the current deal isn’t approved, he told the panel of five justices, “we will lose our export potential to Jordan, Turkey, Egypt, the Palestinians and also the European Union.”

The court did not strike down another controversial part of the ruling, Clause 52, which is the antitrust law that enables the Economy Ministry to overrule the antitrust issues if national security is at stake.

Raoul Wootliff, Ilan Ben Zion, AFP and AP contributed to this report.