Defiant Netanyahu Withdraws Vote on Gas Plan Lacking Support

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Israeli Prime Minister Benjamin Netanyahu withdrew a parliamentary vote meant to unblock a plan to develop natural gas reserves that was rejected by the antitrust commission, indicating he failed to muster sufficient support.

“When I want to achieve something, I achieve it,” he said, according to a text message from his office. “We have one more obstacle left, and we will overcome it.”

Netanyahu had called the Knesset back from summer recess to secure a motion that would empower his cabinet to override the commission. Without it, that authority resides with Economy Minister Aryeh Deri, who has declined to exercise his right. Netanyahu’s coalition holds 61 of parliament’s 120 seats, hampering his ability to push through legislation over the heads of resistant partners.

“Circumventing the commission in a way that is right and proper should require the authority of the cabinet and full parliament, and not just one minister,” Deri, leader of the Shas party, said in an e-mailed statement after the vote was withdrawn.

Parliament gave only non-binding approval for the plan earlier Monday. The Tel Aviv Oil & Gas Index closed down 2.1 percent.

“I don’t think it’s a sign that there is a danger to the durability of Netanyahu’s government,” Abraham Diskin, a professor of political science at The Hebrew University of Jerusalem, said by phone. “Narrow governments, as long as they have a majority, tend to be more durable.”

“But you have a problem of day-to-day functioning,” he said.

High Prices

The proposed regulatory framework for the gas industry was reached in negotiations with Texas-based Noble Energy Inc. and Israel’s Delek Group Ltd., principal owners of the country’s two biggest gas fields, Tamar and Leviathan. Critics, including former antitrust commissioner David Gilo, who resigned in protest over the arrangement, say the proposal damps competition and prices the gas too high for domestic consumers.

The government says the proposed gas plan would attract new investors to explore and develop offshore fields, speed exports to regional neighbors including Jordan, and pump billions of shekels of taxes and royalties into the economy.

“We call on the government to speedily implement the policy so we can proceed with the development of Leviathan and expansion of Tamar,” Noble said in an e-mailed statement after the parliament session.

Under the the arrangement, Noble would have to reduce its stake in Tamar, Delek must sell all of its interests in the field, and both companies will have to sell off two smaller gas sites, Karish and Tanin. The framework establishes a price ceiling and an indexing mechanism to regulate gas prices, and sets milestones for the companies’ development of the fields.

“The antitrust regulator still has to be overruled, and that has not happened,” Noam Pincu, an analyst at Psagot Investment House Ltd. in Tel Aviv, said by phone. “We are still in the same place, without having moved in the right direction.”