Tamar gas field.
(photo credit: MARC ISRAEL SELLEM/THE JERUSALEM POST)
In formulating the country's long-disputed natural gas compromise outline, finding a balance between both competition and security interests was critical, according to Deputy Attorney General Avi Licht.
"It is important to understand that competition is important, very important,” Licht told Knesset Economic Affairs Committee members on Sunday evening. “But there are also other important things, like geopolitical security interests."
Licht was addressing the committee during the fourth of a series of final advisory discussions that are a precondition toward implementing the long disputed deal. Although the deal in question received both required cabinet approval in August and additional Knesset backing in September, fully activating the outline now requires that the economy minister invoke a legal clause to sidestep the Antitrust Authority’s objections.
While the clause – Article 52 of the 1988 Restrictive Trade Practices Law (The Antitrust Law) – has never before been implemented in Israel’s history, an economy minister can invoke the measure by citing national security or foreign policy interests. After former economy minister Arye Deri resigned from his position earlier this month, it became Prime Minister Benjamin Netanyahu's duty in that role to consult with the Economic Affairs Committee prior to activating Article 52.
Relevant government officials addressed the Economic Affairs Committee on the issue in the fourth session on Sunday evening, while social and environmental activists continued to present their opinions at a third and final session open to them on Sunday morning.
"Geopolitical security considerations were on the table from the beginning,” Licht said. “But since the commissioner announced he had changed his stance, we understand that we would need to use this article. Therefore, the use of the article arose when we realized that we could not continue to assemble the outline with the cooperation of the antitrust commissioner. The article talks about a balance between competition and security and foreign policy considerations."
Although acknowledging that government officials never wanted to reach a situation in which they would have to activate Article 52, Licht explained that his office sees no problem from legal perspective in making use of the clause.
The natural gas outline is the result of some eight months of negotiations that followed former antitrust commissioner David Gilo’s December declaration that he intended to review whether the market dominance of the Delek Group and Noble Energy constituted an illegal “restrictive agreement.”
After issuing several iterations of a compromise outline and following a public objections period in July, the government authorized the terms of the deal in August.
Among the terms of the outline are requirements that Delek Group and Noble Energy sell their two smaller reservoirs Karish and Tanin in 14 months, with Delek completely exiting the Tamar basin in six years and Noble diluting its assets there. The document also establishes some pricing schemes – which opponents deem far too weak – and includes clauses for ensuring stability in the sector. Delek and Noble are able to fully remain in the larger Leviathan reservoir, where development has been frozen due to the ongoing negotiations.
Like the many Knesset opposition politicians and activists who have come out against the deal, Gilo refused to support the outline, saying it would stifle competition in the gas market. He ultimately resigned over the issue on August 31, and the acting antitrust commissioner has likewise not offered support. As a result, and despite the government’s approval of the plan, the only way to fully activate the outline with an economy minister’s activation of the Article 52 clause.
After expressing his unwillingness to implement this measure, Deri elected to resign on November 1, Netanyahu assumed the role of economy minister. While Netanyahu is required to consult with the Economic Affairs Committe