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Netanyahu: Bizarre gas ruling will greatly damage economy

Energy minister slams ‘miserable’ court decision that may scupper deal; opposition leader praises ‘brave’ ruling

Prime Minister Benjamin Netanyahu leads the weekly cabinet meeting at the Prime Minister's Office, Jerusalem, March 27, 2016. (Marc Israel Sellem/Pool)
Prime Minister Benjamin Netanyahu leads the weekly cabinet meeting at the Prime Minister's Office, Jerusalem, March 27, 2016. (Marc Israel Sellem/Pool)

Government officials on Sunday evening castigated the High Court of Justice decision that put the brakes on a controversial natural gas deal, even as opposition lawmakers — who led the petition against the accord — celebrated the development as a victory for the public.

Prime Minister Benjamin Netanyahu, who had spearheaded efforts to seal the deal between the state and gas companies, said the ruling “threatens the development of Israel’s gas reserves. Israel is regarded as a state with excessive judicial intervention, which makes it difficult to do business.”

In its decision, the High Court declared that the deal to extract offshore natural gas would be canceled within a year unless a central tenet of the agreement, preventing future governments from altering the terms, is significantly changed or canceled.

“Surely nobody can celebrate the fact that the gas is likely to remain in the depths of the sea and that hundreds of billions of shekels won’t reach the citizens of Israel,” Netanyahu continued. However, he vowed to “find other ways to overcome the great damage caused to the Israeli economy because of this bizarre ruling.”

Attorney General Avichai Mandelblit said the government would respect the High Court ruling, but added that he would “examine legal solutions to allow the government to implement its policy.”

The stability clause, one of the central parts of the gas deal, had ensured there would be no regulatory changes, regardless of changes in the government or changing discoveries on the amount of gas as the drilling progresses.

Opponents want the gas deal regulations to remain dynamic, and argued that the stability clause was too favorable for the gas companies.

Energy Minister Yuval Steinitz called the High Court’s ruling “miserable” and said its “negative consequences for developing the gas market, for energy security, for the Israeli economy, and in lost income for the state of Israel and its citizens, are liable to be even harsher — and potentially irreversible.”

Justice Minister Ayelet Shaked called the ruling a “crude and unnecessary intervention in a government decision.”

“It is unacceptable that the government holds the responsibility over the economy and prosperity of the state, but remains without the necessary authority to take action,” she said in a statement.

By contrast, opposition leader Isaac Herzog (Zionist Union) — whose Knesset faction filed the petition against the deal — welcomed the decision.

“A correct and brave decision by the High Court,” he wrote on his Twitter account. “The government mustn’t tie its hands and its [right to use] discretion.”

Herzog said the petition by Zionist Union MKs “established a clear public limit for the benefit of the general citizenry and the citizens of Israel.”

In a statement, the Zionist Union wrote that it “welcomes the High Court decision that accepted the party’s petition and cancelled the gas deal.”

The party said the decision proved the claims that Netanyahu “was not looking at the benefit for the citizens of Israel when he signed the gas deal.

“In contrast to [Netanyahu] and his government, the petition claimed that the gas belongs to all of the citizens of Israel and not just to a small group of those close to the prime minister and we will continue to act for that to be the case,” the party said.

An aerial view of an Israeli offshore gas rig (Albatross Aerial photography/Noble Energy/Flash90/File)
An aerial view of an Israeli offshore gas rig (Albatross Aerial photography/Noble Energy/Flash90/File)

Zionist Union MK Tzipi Livni wrote on Twitter that “cancellation of the deal is the price that the government pays today for the uncouth trampling of the legislative gatekeepers.”

However, Immigration Minister Ze’ev Elkin accused the justices of meddling with the business of government and the running of the country.

“To my regret, once again the High Court blatantly got involved in the administration of the country without taking responsibility, when the outcome of that involvement is damage to the Israeli economy, and there will be many billions missing from the budget that could have been directed to the welfare, health, and social needs of others,” he said. “It is worthwhile remembering that those who bear responsibility for that are the judges, who sit in the ivory tower of the High Court.”

Elkin added that “there is an inevitable need for a fundamental reform of the legal system in order to restore rational Israeli democracy.”

Netanyahu had 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 so-called “stability clause,” which meant that the government could not impose regulatory changes, such as breaking up suspected monopolies, on the gas companies for a full 10 years.

Netanyahu signed the gas deal on December 17, 2015, paving the way for a consortium of Noble Energy and the Delek Group to begin work on extracting gas from the massive Leviathan gas field off Israel’s coast, which is thought to contain some 22 trillion cubic feet of gas.

The deal came after a year of 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.

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