Gas interests

June 20, 2013 22:14

The public must be satisfied that such a fateful matter is discussed openly and that as many scenarios as possible are considered.

3 minute read.

Protesters in Ramat Gan near Minister Shalom's residence protesting gas exports, May 25, 2013

natural gas protest370. (photo credit: Courtesy, Scoutti, Ori Hait )

On Sunday, Prime Minister Binyamin Netanyahu will recommend that the cabinet approve Israel’s export policy for selling our abundant offshore natural gas reserves.

Netanyahu, Finance Minister Yair Lapid and Energy and Water Minister Silvan Shalom agreed during a closed meeting this week to a modified version of the Zemach Committee recommendations.

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The most controversial issues surrounding the proposals – the share of natural gas earmarked for export – was cut from 53 percent of the total amount of gas estimated to be found in the Tamar and Leviathan gas fields to 40 percent.

Local and foreign gas giants that include Noble Energy, Delek Drilling, Avner Oil Exploration and Isramco had put pressure on the members of the Zemach Committee to maximize exports, to ensure that the gas is sold at a premium. The companies even threatened to “leave the gas in the ground” unless enough was set aside for export.

Protocols from the meetings of the committee, which finished its work eight months ago, show there was a clear majority opinion in favor of accommodating business interests. Outgoing Environmental Protection Ministry director-general Alona Schaefer-Karo was the sole dissenting voice.

But as the Zemach Committee’s recommendations were publicized and discussed, public awareness to the tremendous stakes involved sparked grassroots opposition. Weekly demonstrations on the street corners of our cities and outside the homes of the energy and finance ministers led by environmentalists, social activists and citizens fed up with the annoying regularity with which the interests of big business trump the greater good of society and free market principles had an impact on policy-makers. Netanyahu, Shalom and Lapid adopted Schaefer-Karo’s dissenting opinion. More gas would be set aside for domestic use. The public proved that it would not be put off by an issue involving complicated or arcane concepts such as retrograde condensation and GTL (the gas-to-liquids refinery process).

The challenge facing our policy-makers is how best to balance the interests of the gas giants, who took great risks and invested hundreds of millions in exploration, with the needs of society. Obviously, private investors who succeeded where state-owned firms failed for decades to uncover gas or oil are entitled to profit from their efforts.

Exploration companies are rightly wary of entering into an arrangement until they are assured that the terms of deal are worth their while.

At the same time, large quantities of cheap natural gas could transform the economy and radically improve our standard of living. Industries and transportation would operate at lower cost and produce less pollution. The Israel Electric Corporation would be able to produce power much more cheaply, lowering all of our electric bills. If too much gas is diverted to destinations outside Israel, these benefits could be lost.

Much depends on finding the right balance between competing interests. How best to allocate our abundant gas reserves is perhaps the singlemost important economic decision to be made in years, if not decades. At stake are hundreds of billions of dollars, the standard of life for millions of Israelis and the protection of our environment.

It is therefore imperative that the decision-making process be democratic, transparent and balanced.

Deputy Attorney-General Avi Licht is reportedly deliberating over whether the cabinet alone can decide Israel’s gas export policy or whether the Knesset must approve it.

We hope that the broadest forum possible is involved. Regardless of the final decision, the public must be satisfied that such a fateful matter is discussed openly and that as many scenarios as possible are considered. This can only be achieved if the Knesset plenum and various Knesset committees consider policy options in free and open debate.

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