‘US ambassador pressed Arab MKs on gas deal vote’

Dan Shapiro urged Knesset members opposed to agreement to be absent or abstain during vote on plan, report says

Prime Minister Benjamin Netanyahu (left) with then US ambassador to Israel Dan Shapiro in April 2013. (Flash90)
Prime Minister Benjamin Netanyahu (left) with then US ambassador to Israel Dan Shapiro in April 2013. (Flash90)

US Ambassador to Israel Dan Shapiro has been trying to persuade Knesset members of the opposition Joint (Arab) List to abstain or absent themselves from a Knesset vote advancing a controversial plan to develop Israel’s natural gas reserves, Army Radio reported Tuesday.

A “yes” vote would allow the cabinet to implement its agreement with Israel’s Delek Group and Noble Energy of the US to develop the massive Leviathan gas field, some 130 kilometers off the Haifa coast.

Shapiro reportedly wants Joint (Arab) List lawmakers opposed to the deal — which would grant exclusive development rights of the field to Noble and Delek — to withhold their “no” vote, either by abstaining or by skipping the vote altogether.

The ambassador discussed the vote with Ayman Odeh, the head of the Joint List, and veteran Arab MK Ahmad Tibi on Monday, Army Radio said.

The United States is thought to perceive the gas deal, which would allow Israel to move forward in supplying energy to such US allies as Egypt and Jordan, as a potentially stabilizing force in the region.

The deal, which was endorsed by the security cabinet on Thursday, states that Delek must sell its entire share of the Tamar field, and Noble Energy must sell most of its holdings, within six years. Delek must sell its holdings in two smaller gas fields within 14 months.

The firms have been selling gas to the Israeli market from Tamar, which went online in 2013, and have agreed to sell to neighboring countries as well. Leviathan, the largest gas field in the Mediterranean, has not yet been developed.

The agreement has been sharply criticized by Antitrust Authority chief David Gilo, who said that it cemented a de facto monopoly over Israel’s natural gas reserves. With Gilo refusing to sign off on the deal, Economy Minister Aryeh Deri had the power to approve it, but Deri refused to assume that responsibility. In the wake of Deri’s decision, Prime Minister Benjamin Netanyahu has been seeking to pass the deal in the cabinet, but in order to do so he needs the Knesset to grant the cabinet the authority to decide.

However, with three of his ministers having recused themselves from the vote, citing a conflict of interest, the prime minister has been forced to postpone the Knesset vote indefinitely, and on Tuesday Yuval Steinitz, the minister of national infrastructure, energy and water resources, was revealing the details of the Noble-Delek agreement, in a press conference — a move Netanyahu has hitherto resisted.

Israelis protest against Finance Minister Moshe Kahlon, and the US-Israeli conglomerate Noble-Delek over a plan to develop Israel's natural gas reserves, in Tel Aviv, on May 30, 2015. (Flash90)
Israelis protest against Finance Minister Moshe Kahlon, and the US-Israeli conglomerate Noble-Delek over a plan to develop Israel’s natural gas reserves, in Tel Aviv, on May 30, 2015. (Flash90)

Opponents of the agreement charge the government with selling off Israel’s natural resources and accuse Netanyahu of caving to a monopoly. The prime minister, however, insists that this is not the case.

“We are promoting a realistic solution that will bring natural gas to the Israeli market and not a populist solution that will leave the gas in the depths of the earth,” Netanyahu said Thursday. “This dismantles the monopoly and will bring in the coming decades hundreds of millions of shekels for education, welfare, health and for every Israeli citizen.”

Israeli environmentalists and opposition lawmakers have pushed for more competition in developing Israel’s offshore gas, saying it would lower prices and encourage local industry to use the environmentally friendly resource. But Israel’s own antitrust commissioner has said the emerging deal wouldn’t provide for real competition, and announced his resignation in protest last month.

“Those companies do whatever they want,” said Amit Bracha, director of the Israeli Union for Environmental Defense, a lobbying group. “They don’t care about the social issues that we are dealing with today in Israel … We say the natural gas is owned by the people.”

The State Comptroller’s Office announced Tuesday that it would look into suspicions of “substantial” mismanagement of the gas contracts by the government.

While Israel’s finds are minimal compared to gas giants Russia, Iran and Qatar, they are more than enough for the country’s domestic needs and would enable it to reduce its reliance on costlier and dirtier oil and coal. Nearby Cyprus has also become newly resource-rich, and Israel’s other neighbors may discover their own deposits.

Israel has just the world’s 38th largest supply of proven natural gas reserves, according to the CIA Factbook. But Israel hopes its proximity to Middle Eastern and European markets could make it a regional player. Shapiro has called on Israel to create incentives to attract international gas developers.

The forced sales are aimed at opening the industry to competitors. The deal also sets a price ceiling for future sales to Israeli companies and commits the gas firms to complete the development of the Leviathan gas field by 2019.

But critics say the deal might in fact strengthen the gas monopoly, because the companies will maintain a de facto monopoly over the Tamar field for the next six years before entering a similar partnership to develop the Leviathan field.

Zionist Union MK Shelly Yachimovich, who has been a leading opponent of the deal, said that the two smaller gas fields, to be open to new investors, will not add much competition.

“The emerging deal does not bring even one achievement to the public,” Yachimovich told Army Radio. “Netanyahu caved completely.”

In a vote Thursday, Israel’s security cabinet determined that the gas deal should be considered a matter of national security. Geopolitical concerns hang in the balance, as Israel plans to export natural gas to Egypt, Jordan and the Palestinian Authority. According to Israeli law, the security cabinet’s ruling that the deal is crucial to Israel’s national security or foreign relations means that the government can overrule any objections by antitrust authorities.

“We should not sidestep the position of the antitrust commissioner,” said Zionist Union MK Tzipi Livni. “It should not be in the shadows of the cabinet. There should be an open debate on this topic.”

Yossi Langotsky, a geologist who says he initiated the drilling project of the major Tamar field but no longer has financial interest in the matter, said the government capitulated to the gas companies’ demands.

He said Israel made a mistake when it decided to allow the export of 40 percent of its gas two years ago.

“The consequences of that short-sighted and irresponsible decision will be the emptying of half of Israel’s emergency stores to satisfy the appetite of the Israeli and foreign gas companies that are seeking quick profits, as well as treasury officials interested in the royalties,” he wrote in Haaretz.

AP contributed to this report

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