Coalition’s scramble to pass controversial bill on offshore drilling is unsuccessful; Netanyahu may make details of deal public

Prime Minister Benjamin Netanyahu at the Knesset on June 29, 2015 (Hadas Parush/Flash90)
Prime Minister Benjamin Netanyahu at the Knesset on June 29, 2015 (Hadas Parush/Flash90)


A parliamentary vote on a controversial natural gas deal was postponed indefinitely late Monday night, after Prime Minister Benjamin Netanyahu failed to cobble together a Knesset majority to pass the legislation.

Netanyahu was considering publishing the full details of the economic proposal in the coming days, in an effort to garner support for the motion.

The Knesset had initially been set to vote Monday evening on Sunday’s cabinet decision exempting the natural gas industry from antitrust laws — a move that has caused public uproar. But Netanyahu was pushed into the defensive after members of his own coalition threatened to abstain from the vote, citing conflicts of interest.

Kulanu ministers Moshe Kahlon and Yoav Galant, as well as Likud minister Haim Katz, had said they could not participate in the vote due to their ties to the gas industry. The three stood firm in their refusal despite being cleared by legal advisers. Netanyahu, who holds a wafer-thin majority in the Knesset (61 of 120 members), could not afford to hold the vote without them.

Members of the opposition had said they would vote against the motion due to the government’s lack of transparency on its details. The opposition’s Yisrael Beytenu initially said it would back the vote, providing the prime minister a possible lifeline. But party leader Avigdor Liberman later pulled his support.

The Tamar natural gas field off the coast of Ashkelon (photo credit: Moshe Shai/FLASH90)
The Tamar natural gas field off the coast of Ashkelon (photo credit: Moshe Shai/FLASH90)


Though Liberman said he agreed with the legislation “in principle,” he said he would not be used as a crutch by Netanyahu to bypass internal coalition problems.

Liberman’s eleventh-hour withdrawal forced the premier into hours of negotiations with the abstaining ministers, but no amount of political wrangling — including a threat to make the issue a vote of confidence in the government — could help. The vote was first pushed to 2 a.m. and later cancelled.

The vote is the last legal hurdle before a partnership between the US company Noble Energy and the Delek Group of Israel makes them the sole developers of the Tamar and Leviathan natural gas reserves off the coast of Haifa.

Citing national security concerns, the cabinet had decided Sunday to overrule the regulatory agency’s calls to limit the dominance of the US-Israeli energy conglomerate, which jointly controls most of the gas reserves.

Sunday’s cabinet decision awarded the Noble-Delek group immunity from the Antitrust Authority for a period of 15 years and allowed the energy giants to keep their majority holdings in the Leviathan offshore gas reserve until 2030, even if the reserve becomes Israel’s only source of natural gas, the Haaretz daily reported Monday.

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

The Noble-Delek partnership has been branded a de facto monopoly by Antitrust Commissioner David Gilo.

Economy Minister Aryeh Deri, who would have had the power to overrule Gilo, announced last week that he would not exercise his authority, forcing Netanyahu to bring the matter to a cabinet vote.

Opposition leader Isaac Herzog has demanded that the gas deal be made public.

“What is Netanyahu scared of?” said Herzog. “If the deal is so good, the public will support it.”

“I demand that the gas outline be exposed to the public and its constituency. It is outrageous that members of the Knesset will vote on such a fateful issue without deeply studying and understanding the meaning of the issue with the appropriate transparency and in an open debate,” Herzog added.

On Saturday, opposition lawmaker Yair Lapid said that his Yesh Atid party would not endorse the emerging deal and called for increased transparency in the negotiations.

“Yesh Atid will not support a plan that does not contain a monitoring mechanism for gas prices,” Lapid said at a gathering in Holon on Saturday. “It cannot be done in the shadows, it must be transparent,” he said.

Clause 52A of the Antitrust Law grants the economy minister the exclusive power to override decisions by the Antitrust Authority chief for issues with sensitive strategic or diplomatic implications. On all other issues, the Antitrust Authority chief’s decisions are binding.

While Deri did not indicate how he would vote on Monday, he has voiced opposition to the plan unless it allows for government veto on the companies’ rights to solely develop the reserves.

Over the last several months, the government has been fighting opposition to the agreement, which critics — including Gilo — claim leaves too much power in the hands of Noble and Delek.

Pushing for increased competition in Israel’s offshore gas market, Gilo slammed the partnership in December, calling it a cartel. He said the deal wouldn’t provide any real competition and announced his resignation in protest last month, to take effect in August.

During Sunday’s cabinet meeting, Netanyahu said he was “determined” to push through the deal, and attempted to assure critics that the decision did not mean his government had caved to a Noble-Delek monopoly.

“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,” he said. “This dismantles the monopoly and will in the coming decades bring in hundreds of billions of shekels for education, welfare, health and for every Israeli citizen.”

Under a decision made by the security cabinet, Delek must sell its entire share of Tamar, and Noble Energy must sell most of its Tamar holdings within six years. Delek must sell its holdings in two smaller gas fields within 14 months.

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.

Israel Antitrust Commissioner David Gilo, March 18, 2014. (Flash 90)
Israel Antitrust Commissioner David Gilo, March 18, 2014. (Flash 90)

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 embarking on a similar partnership to develop the Leviathan field.

Pushback against the impending deal has grown in recent weeks. On Saturday evening, thousands of protesters marched in Tel Aviv against the government’s handling of the issue, sparking low-level clashes with police.

Environmentalists have also voiced opposition to the plan, saying that increased competition would encourage the industry to use more environmentally friendly resources.

As reported by The Times of Israel