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Israeli Gas: The Tug of War for Energy Security

Israel’s fourth Prime Minister Golda Meir once lamented that  “Moses dragged us for 40 years through the desert to bring us to the one place in the Middle East where there was no oil.” With the development of the Tamar and Leviathan gas fields, this fate has been rewritten, entrusting Israel with a sum of 532 Billion Cubic Meters (BCM) of natural gas, some of which will begin flowing from the offshore platforms by 2019. Alongside a new report by French consulting firm Beicip-Franlab that estimates 2,120 BCM’s of gas in Israel’s territorial waters, another recent discovery at Daniel East and West has revealed an additional 252 BCM’s. In stark contrast to Meir’s perspective, Prime Minister Netanyahu has called the gas “a gift from God,” but this seemingly divine power demands the responsible management of Israel’s domestic needs alongside the rewards offered by export.

 

On 14 February, 2016, Israel’s relationship with its partners for gas production and exploration came to the forefront when Prime Minister Netanyahu took the extreme length of appearing before the High Court of Justice to defend his natural gas framework.

 

The framework, which is colloquially known as Mitveh Hagaz, is the product of a number of amendments, including a proposed shift from the 40% ceiling on natural gas exports ratified in 2013. Standing out in this framework is a contentious stability clause that protects the interests of industry leaders by shielding them from regulatory changes for 10-15 years. The Netanyahu government’s support for the gas industry has also led the Prime Minister to take on the role of Economy minister in order to invoke Clause 52, a step that negates antitrust and monopoly laws  in the case of diplomatic and security concerns. The result of these efforts has been the creation of climate devoted to fostering Israeli oil exploration and exportation.

 

In light of the Netanyahu Government’s extraordinary measures to advance Israeli oil exports, it is important to examine how this cause is granted legitimacy. At the High Court hearing on February 14th 2016, Netanyahu stressed the deal’s diplomatic importance: “I want to harness natural gas for the sake of regional cooperation.” He further warned that should Leviathan’s development not promptly begin, “We’re liable to lose our cooperation with Jordan, the Palestinians, Cyprus, Egypt and the European Union. The deal is a diplomatic lever of the highest order that will change the face of the region.”

 

Netanyahu’s claim of regional benefits has so far been realized, with one report from the Times of Israel pointing to a recent deal with the Palestine Power Generation Company (PPGC). The PPGC will be the first buyer of natural gas extracted from the Leviathan gas field, with a purchase of 1.2 Billion Dollars worth of gas over 20 years. Additionally, an increased Jordanian reliance on Israeli natural gas has resulted in a 15 Billion dollar deal through a “non-binding letter of intent to supply natural gas from the Leviathan field, offshore Israel, to the National Electric Power Company Ltd (NEPCO) of Jordan.” Lastly, a reversal has occurred wherein Egypt has gone from providing Israel energy to today, where Israel will now provide 1 Billion Dollars worth of natural gas from the Tamar reservoir to the Egyptian company Dolphinus, which serves non-government consumers.

 

Although promises of greater regional diplomacy have been acted upon, the Israeli public has demonstrated its dissatisfaction with the resulting decrease in domestic supplies of natural gas most notably on November 14th, 2016 when 10,000 people converged to protest the passing of Netanyahu’s natural gas framework. Yaron Zelekha, the former accountant general in the Finance Ministry spoke out saying;

“This is a monopoly that is selling our own gas back to us, that it received for nothing. They say it’s worth making concessions for the sake of Israel’s geostrategic standing, but Netanyahu has turned Israel into the country with the most expensive housing in the West. The country in which cars are the most expensive in the West. The country in which food is the most expensive in the West, and now the country with the most expensive gas in the West and it’s our gas.”

 

Despite the geopolitical gains and the creation of a lax regulatory climate to encourage investment, the magnitude of these protests and Zelekha’s discourse demonstrate the public’s perception of a the gas deal that’s unfavorable to Israeli citizens.

 

With the judgement of Netanyahu’s framework in this state of tension, it is important to examine the structure of the pro and anti export’s rhetoric. In a study published in April 2014, Itay Fischendler and Daniel Nathan used 18 position papers and 20 public hearings on matters to with Israeli natural gas, and quantitatively found that both pro and anti export groups coupled energy with securitization rhetoric.

 

While Netanyahu routinely makes statements such as “The situation of a single field endangers the country and its energy security,” opposition figures like Green Course activist Ely Abramovitch express similar sentiments; “The public realizes the gas deal is dangerous for Israel. It allows for quick export of Israeli gas and will leave us without gas in the future”

 

What is dismaying about this unified rhetoric is its correlation to disfunction in the political advancement of Israeli gas exports.  Fischendler and Nathan conclude that “The legitimization of energy policies in the name of energy security was found to create conflict,” and this conflict “resulted in the recommendation of extreme policies, like the complete circumventing of the Israeli planning system for the purpose of expediting exportation.”  If we look even today at the Prime Minister’s aim to bypass the Knesset to enforce Clause 52 introduce pro-monopoly policies, the Israeli public is indeed forced into a position whereby it must contend with a government seeking to expedite exportation.  The result is a sense of public mistrust, a sign of a fundamental misalignment of the three parties of Industry, government, public.
Netanyahu has stressed that before Israel lies a golden opportunity, and he is right. With years of being an energy destitute country, Israel has been forced to innovate and mitigate its energy insecurity, but in light of these recent developments, the Israeli government must realign its values with that of the public so as not to spoil a “gift from God.” Should this not happen, and should this zero sum policy of securitization continue, Israel runs the real risk of courting further conflict and mistrust, ultimately spoiling the gift entirely.

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