Netanyahu signs natural gas deal, passing major hurdle

But critics vow to take fight to court, signaling year-long battle over deal with conglomerate to extract gas from offshore fields will continue

Prime Minister Benjamin Netanyahu (center) leads the weekly government conference, at the Prime Minister's Office in Jerusalem, December 13, 2015. (Yonatan Sindel/Flash90)
Prime Minister Benjamin Netanyahu (center) leads the weekly government conference, at the Prime Minister's Office in Jerusalem, December 13, 2015. (Yonatan Sindel/Flash90)

After months of intense debate and numerous bureaucratic and legislative hurdles, Prime Minister Benjamin Netanyahu signed Thursday a controversial deal on Israel’s newly found gas fields in the Mediterranean.

The agreement paves 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, and is expected to transform the country into a regional energy powerhouse.

However, activists and politicians against the deal wasted no time in vowing to take the agreement to the High Court, signaling that the fight over the move was far from over.

During a ceremony at the Ne’ot Hovav industrial zone near Beersheba, Netanyahu called the gas “a gift from God” and said the deal would pave the way to energy independence.

“This plan is important to our economy because it gives us a much cheaper source of energy,” he said. “It makes us, if not an energy superpower, then definitely an important international force.”

The move comes 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.

In a reference to ongoing calls to renegotiate the deal Netanyahu said, “There is no way to open up these additional gas fields without this plan. This is the only option.”

Netanyahu was able to sign the deal after invoking a never-before-used clause to override an antitrust ruling against the deal by declaring it an issue of national security.

“Unfortunately, this issue has become a political and populist discussion,” he said Thursday. “This plan is vital to our security, because we don’t want to be left with one power plant that’s under fire; we need multiple gas fields.”

In addition to security considerations, Netanyahu said the deal was also an issue of international diplomacy.

“This is essential for our foreign relations. Many countries have expressed interest [in buying the natural gas]. Not just Greece and Cyprus, whose leaders I am meeting in a few weeks. Jordan, and of course the Palestinian Authority as well, have shown interest. Turkey and Egypt are also interested, and we are in discussion with them,” he said.

Illustrative photo of a natural gas field in the Mediterranean Sea (Moshe Shai/FLASH90)
Illustrative photo of a natural gas field in the Mediterranean Sea (Moshe Shai/FLASH90)

But critics have vowed to continue their struggle against the deal.

Opposition leader Isaac Herzog said Netanyahu’s use of Clause 52 of the Restrictive Trade Practices (antitrust) Law was “a cynical ploy that takes advantage of our security situation.”

He said his Zionist Union faction would bring the issue before the High Court, “in order to save Israel’s economy and preserve the rights of the Israeli public.”

Former environmental activist MK Yael Cohen-Paran (Zionist Union) warned that the struggle is far from over. “We will continue in the courts and by every lawful means,” she said in a statement. “The evidence we have accumulated in the past proves time after time that the use of Article 52 is not legal, and that public interests are being trampled in favor of tycoons.”

Cohen-Paran slammed Netanyahu for “ignoring the recommendations of the Economic Affairs Committee, and the security, economic, and energy interests of the State of Israel.” She also pushed the Bank of Israel and the Finance Ministry to increase their transparency about the details of the gas deal.

Netanyahu was forced to pursue the use of Clause 52 after then-antitrust commissioner David Gilo ruled last year 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.

Gilo resigned in May over Netanyahu’s decision to push the current deal through.

Former economy minister Aryeh Deri, not wanting to pay a political price for the gas deal but also not wanting to stand in its way, resigned his post last month, allowing Netanyahu to take over the ministry and sign the deal himself.

Netanyahu previously failed over several attempts to pass a Knesset vote transferring Deri’s “Article 52 authority,” as it is known, to the broader cabinet.

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.

Professor Zvi Eckstein, the deputy governor of the Bank of Israel between 2006 and 2011, said the gas deal will bring cheaper energy, cleaner energy, a lot of billions of shekels in taxes, but that the agreement should have been hammered out five years ago when the massive gas fields were first discovered.

Eckstein, who is now the dean of the Arison School of Business and the School of Economics at IDC Herzliya, said that the gas deal can improve regional ties with countries like Jordan, Egypt, and Turkey. While Egypt recently discovered a massive offshore gas field, it will take years to develop and Israel can provide much-needed gas in the meantime.

He said he believes Israel could start exporting natural gas within a year once the High Court of Justice approves the deal that Netanyahu signed on Thursday.

US company Noble Energy and the Israel-based Delek Group 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 until a recent Egyptian find which dwarfed Leviathan.

Oshrit Gan-El, a spokesperson for the Green Course environmental activist group, which specializes in the gas deal, predicted that the agreement would not stand.

“We’re not surprised [Netanyahu signed the deal]; it’s another step in the chain of antidemocratic actions that we’ve seen for this gas deal,” she said. “We think that this deal will collapse in the coming months, there’s no balance between interests of the public and the interests of the companies.”

She added that the group will support all of the petitions filed in court against the deal.

Green Course has been part of a number of environmental organizations organizing weekly protests against the gas deal on Saturday nights. This coming Saturday night, they will protest in Netanya in front of the home of Yitzhak Tshuva, the owner of Delek Group.

Tamar Pileggi contributed to this report.

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