Gas lesson

By
September 5, 2015 22:02
3 minute read.
tamar gas

Israel Navy missile ship patrols near Tamar gas field‏. (photo credit: MARC ISRAEL SELLEM/THE JERUSALEM POST)

 
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While we bickered, debated, deliberated and most of all dithered, Israel lost its promising position as the new gas-producing giant.

The surfeit of good intentions, bad intentions, political machinations, legal wrangles and regulatory vacillations inevitably detracted dramatically from Israel’s attractiveness as an investment venue and trading partner.

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All this was unkindly highlighted by the discovery of enormous gas deposits off Egypt’s shores. Israeli indecisiveness and infighting have turned us into a near market irrelevancy and the Egyptian finds emphasize this incontrovertibly.

We quarreled and split hairs as if we held all the trump cards and as if our natural gas was indispensable and irreplaceable. We were just served notice from Egypt that it is not.

To this must be added the expected mega-influx of Iranian gas, now that Iran is being freed of crippling sanctions and that Europeans and East Asians already flock to do business with the ayatollah regime.

Nevertheless, in economic terms dealing with a democracy presumably promises stability and certainty.

These are prime assets, but when the democratic process is skewed by objections and obstacles raised by an array ranging from populists to socialists and all the way to thinly veiled anarchists, we lose the claim of offering a secure business environment.



When appointed civil servants can overturn signed agreements and government policy, we lose the credibility that is democracy’s greatest advantage. When the governing coalition is seared by conflicting interests and paralyzing fear of the press – and further down the line of nearly inevitable Supreme Court interference and vetoes – potential investors and clients can no longer count on the absence of disruptive or arbitrary fluctuations that presumably are the perks of dealing with a democracy.

Risky as doing business with nondemocratic or pseudo-democratic regimes might be, they offer fewer impediments in the short haul. Egypt will surely not confound its investors as Israel did and will not hinder exports as was the case here.

We are not recommending that Israel ditch its democratic ways, but excessive populist zeal is not democracy’s essence. Indeed it may be misguided and anomalously misrepresent democratic interests. Our often manipulative commotion has gone far beyond the bounds of constructive public discourse.

It is instructive to recall the great cheer with which the impressive gas discoveries at the Leviathan field were greeted five years ago. It was hailed by one and all as the great national hope and a strategic game-changer.

But the ebullience fizzled out since and Leviathan’s natural treasures still rest beneath the sea floor 130 kilometers west of Haifa. There is still no energy independence.

Fuel prices have not been slashed. There are no European customers knocking on our doors. Russia is not begging to cooperate with us. Nothing much has changed, save for headline-generating squabbles aplenty.

If anything, it is as if there had been a concerted attack against Israeli gas exports, with all the strategic benefits these held in store for our beleaguered state. Export quotas were reduced to a frustrating minimum and only from the smaller Tamar field (which also feeds some of Israel’s domestic consumption), whereas the truly promising Leviathan had been for now entirely removed from the export equation and thrust into imposed abeyance.

From a commercial viewpoint, this borders on the ridiculous. While we delay Leviathan’s development, our market niche – such as it was – is taken over by larger and easier-to-work-with competitors, Egypt foremost.

Israel has spectacularly shot itself in the foot, and all because of an orchestrated outcry instigated by those with an agenda who, for one motive or another, failed to look out for this country’s essential interests (while claiming to champion the interests of the masses, of the common folk, of have-nots versus an oppressive elite, etc. – all in the classic populist mode).

Too many opinion-molders in our midst prefer to see Leviathan’s gas remain untouched rather than to countenance profit for the field’s developers. But time is critical because circumstances inexorably change and what may today be hyped as the future insurance policy of an untapped resource could prove near worthless tomorrow.

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