High Court rejects petition against state's decision on natural gas export

Petition signed by Yacimovich, Rivlin calling for gas export policy to be determined by Knesset falls 5-2.

October 21, 2013 19:18
The Tamar gas processing rig off the coast of Israel

The Tamar gas processing rig off the coast of Israel 370. (photo credit: Noble Energy)

In a landmark decision that will impact the country for decades to come, the High Court of Justice on Monday upheld the government’s natural gas policy, rejecting a petition to overturn it by a 5- 2 vote.

The core of the petition – filed by opposition leader Shelly Yacimovich, a range of left- and right-wing MKs and several NGOs – was that deciding on a natural gas policy impacting hundreds of billions of shekels and with massive social impacts needed to be done by the full Knesset and not by a mere government decision.

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Supreme Court President Asher D. Grunis, Deputy President Miriam Naor and Justices Esther Hayot, Edna Arbel and Noam Sohlberg were part of the majority in favor of the state, while Justices Salim Jabraun and Elyakim Rubinstein made up the dissent, stating that the government lacked authority to decide the issue without Knesset approval.

The cabinet decision from June 23 stipulated that 540 billion cubic meters of natural gas would be kept at home, thereby limiting export quantities to 40 percent of the country’s estimated reserves rather than a 53% cap that had been initially suggested.

“We accept and respect the decision of the High Court,” Yacimovich said in response to the petition. “We will continue to fight effectively for the energy and economic future of the state and for the general public in Israel, and for Israeli industry, in all public and parliamentary means possible.”

Prime Minister Binyamin Netanyahu said that any delay in implementing the government’s decision would jeopardize the state’s ability to benefit from its natural gas resources.

“Israel won’t make the same mistakes as other countries, that depleted this resource and were left without gas,” he said.

Following a year of discussions, the Zemach Committee – an interministerial committee led by then Energy and Water Ministry director-general Shaul Zemach – recommended in August 2012 that the country keep 450b. cu.m. of gas at home and cap exports at 500b. cu.m., or 53%.

Following a wave of uproar among environmentalists advocating that more gas be kept at home, the government eventually settled on the 540b. cu.m.

figure at that June 23 session. This figure, however, satisfied neither environmentalists nor a large group of MKs who agreed that such a decision of epic proportions must only be made within the confines of the Knesset. About 60 MKs signed a letter to Prime Minister Binyamin Netanyahu making this demand, and Yacimovich eventually brought the issue to the High Court of Justice.

For Yacimovich, the two main objectives from here on out are significantly reducing gas prices and thereby the cost of living, as well as “breaking down the monopoly of Tshuva and Noble Energy.”

Noble Energy is the largest stakeholder in the Tamar and Leviathan reservoir drilling efforts, and Yitzhak Tshuva is the owner the Delek Group, whose subsidiaries Delek Drilling and Avner Oil Exploration also account for huge chunks of the drilling licenses.

“We also call upon the public to continue to be active and informed together with Knesset members and social and environmental organizations, and not let the government sell our future,” Yacimovich continued. “Remember that up against the public are captains of industry with many interests, and this requires consistency and dedication.”

For its part, Noble Energy welcomed the court’s decision as a positive advancement toward exploration and production in Israeli waters.

“The company is committed to continue working with the government on the promotion and the development of the Leviathan project as well as increasing the gas supply to the domestic market,” the Houston-based firm said.

Finance Minister Yair Lapid likewise praised the High Court’s decision, stressing that it reinforces the government’s initial decision, which balanced “the needs of the Israeli market and our ability to take care of future generations and to move the Israeli economy forward.”

Monday’s decision, Lapid said, will “create certainty in the energy sector that will bring many investments in the Israeli economy and enable small, medium and large enterprises to reduce their energy costs, expand their businesses and add jobs to the economy.”

National Infrastructure, Energy and Water Minister Silvan Shalom echoed Lapid’s sentiments, emphasizing that the ruling reinforces the government’s decision, which looks toward the needs of both the economy and future generations.

“I am convinced that now, following the High Court decision, there will be a boost for the development of new reservoirs for the benefit of the public and to strengthen the Israeli economy,” Shalom said.

Just hours before Monday’s High Court decision, Economy and Trade Minister Naftali Bennett sharply criticized the fact that the country’s natural gas future had fallen into the hands of the High Court of Justice.

“Judges should not be governing and right now they are,” Bennett said at a conference in Tel Aviv that morning.

“All I am saying is give gas a chance.”

Many others were not so eager to “give gas a chance.”

For MK Dov Henin (Hadash), the decision to reject the petition is particularly problematic, as such a large number of Knesset members had been in favor of bringing the issue to the legislative body.

“My expectation is that this demand would be respected, even if on a parliamentary level it is possible to find loopholes that would allow the government to behave in this problematic way,” Henin said.

Adam Teva V’Din (Israel Union for Environmental Defense) and the Movement for Quality Government, both of which were involved in Yacimovich’s petition, said that they still believe that the government’s decision not to allow for a “transparent and public decision” in the Knesset occurred with a lack of authority. Adam Teva V’Din vowed to work together with Knesset members to promote a law that will ensure the preservation of gas for the local economy.

NGOs part of the Preservation of Israeli Gas, who were likewise signatories on Yacimovich’s petition, vowed that this was not “the end of the struggle.”

“The struggle for reducing gas exports and lowering gas prices paid by Israeli industry continues in other public channels,” the group said.

The High Court did not elaborate on its full legal rationale for its decision, making a point of the fact that it had rushed a decision on the overall issue, even if it might not release its complete rationale until later.

The ruling was also significant in the broader balance of power between the government and the judiciary.

Only slightly over a month ago, the High Court struck down the state’s migrant policy by a 9-0 ruling, leaving the political arena in a state of complete confusion and anger about what to do next. The decision even reignited the desire in some corners to limit the powers of the court.

With this ruling, the High Court instead backed an equally fateful government policy and under circumstances where both the legal and political opposition was considerable.

The court had pressed the state on some points, but had pushed particularly hard against the petitioners.

Grunis asked, “Why can’t you [petitioners] pass a law” in the Knesset to fix whatever objections there were with the government’s gas policy decisions, rather than asking the court to step in? Contrary to the petitioners’ argument, multiple justices implied that there was a legislative basis under section 33 of the Oil Law of 1952 for authorizing the Energy and Water Minister to make decisions about the nation’s gas policy without the need for a new Knesset law.

This argument appears to have won the day, despite the petitioners’ argument that the new gas policy will have such a massive impact on the country’s future, including “our children and grandchildren,” that it is an issue of “first impression,” or an issue coming up for the first time such that it must be regulated by a new Knesset law.

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