- Israel prime minister defends gas plan in rare court testimony
- Calls gas deal `golden opportunity' for regional cooperation
Israeli Prime Minister Benjamin Netanyahu took on opponents trying to block his government’s contentious plan to develop natural gas fields in unprecedented testimony before the country’s highest court.
Opposition parties and non-governmental organizations have petitioned the court to halt the gas program, challenging the government’s override of the antitrust commissioner’s objections. With global energy prices tumbling, Netanyahu is eager to have Israel’s largest offshore natural gas field developed, and asked to address the court in an effort to sweep away this legal challenge to the plan.
If the plan doesn’t go through, “there won’t be any more investment” from abroad, Netanyahu told the five justices on Sunday, noting that he is the first prime minister to ask to address the court. “Without the gas wells, there will be no competition. Because of good intentions we are liable to miss a historic golden opportunity.” Energy stocks climbed.
Netanyahu’s use of the court to lobby for the plan is in keeping with the lengths he has gone to keep it alive. The prime minister led a political and legal maneuver that allowed him to override the antitrust chief’s objections by maintaining the government’s natural gas policy was in the interest of national security.
“The importance is not just for the economy of the state of Israel but also for national security, for our energy security and for our standing in the Middle East,” Netanyahu told the court in testimony that lasted about half an hour. In the past, he’s said energy self-sufficiency means less international interference and makes Israel less vulnerable to boycotts.
Opposition to the plan has been fierce, prompting Antitrust Commissioner David Gilo to resign in protest in May. Critics contend it entrenches a gas monopoly and would make Israeli consumers pay indefensibly high energy prices.
Israel’s failure to draft a coherent gas strategy more than six years after it discovered offshore reserves has held up development, complicated export deals and antagonized investors. The regulatory logjam has stifled the production of gas from Israel’s largest field, Leviathan, and hampered expansion of the second-biggest reserve, Tamar.
The fields are controlled chiefly by Texas-based Noble Energy Inc.and Israel’s Delek Group Ltd. In Tel Aviv on Sunday, Delek Drilling LP shares advanced 1.3 percent to 11.65 shekels at the close, while Avner Oil LLP rose 1.1 percent to 2.29 shekels. Leviathan partner Ratio Oil Exploration LP increased 4.5 percent to 0.25 shekel. Delek Group Ltd. rose 2.5 percent to 661.5 shekels.
While the government battles obstacles to the plan, the decline in global fuel prices has spurred concerns over the ability in current market conditions to raise the billions of dollars needed to develop Leviathan, whose gas is slated mostly for export.
The drop in gas prices raises “significant questions regarding the feasibility of exports,” the Bank of Israel said on Dec. 14.
Energy Minister Yuval Steinitz said last month that the drop in energy prices isn’t expected to derail the timetable for developing Leviathan. Noble said the Israeli gas could reach foreign markets by 2019, according to Israeli media reports.
Israel has already signed gas export agreements with the Palestinians and Jordan, and has also held discussions on sending fuel to Egypt and Turkey. The prospect of an undersea pipeline to Turkey may be linked to efforts to repair a diplomatic rift caused by an Israeli naval raid in 2010 that resulted in the death of 10 Turks trying to breach Israel’s blockade of the Gaza Strip.
A pipeline to Turkey would also open up the possibility of sending Israeli gas to Europe. Steinitz said he recently discussed that possibility with European Union Commissioner for Energy and Climate Change Miguel Arias Canete. Israel, Cyprus and Greece recently formed an energy alliance to examine the possibility of laying a pipeline that would transport Israeli and Cypriot natural gas to Europe via Greece.
Noble and its Israeli partners signed the first contract to supply fuel from Leviathan last month. The group will supply 6 billion cubic meters of gas over 18 years to two power stations owned by local electricity producer Edeltech Group.