Natural gas at the Supreme Court: Far-reaching consequences

The very fact of a parliamentary debate on gas exports would be a victory for the petitioners.

By ARIELLA BERGER
August 7, 2013 23:03
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)

 
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The preliminary decision on Israel's gas exports offered by Chief Justice Grunis, Supreme Court President, contained wording and hinted a line of reasoning that may have far-reaching legal consequences.

In last week's dramatic hearing, the Supreme Court surprised court petitioners and respondents alike by offering to hear the petition on Israel's gas exports before an extended bench of judges, giving the case "high importance" and stating the case should be ruled "on its merits." In this way, one of the most important and highly regarded institutions of State dramatically and firmly steered the controversy surrounding the export of Israel's gas to the wider public sphere, dramatically elevating it above and beyond its prior realm of grassroots activists.

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To recap, three years ago, substantial gas reserves were found in Israel's territorial waters. The issue of gas export - if, when, how much- was deliberated by the inter-ministerial "Tzemach Committee". In 2012, after more than a year of meetings, the committee recommended a 53% ceiling of gas exports from the Israeli resources.

Acute protests followed, citing a lack of transparency and rigor, disregard of the long-term public interest and a pro-export bias in estimations of gas reserves and demand. Many export opponents were dissatisfied by the government's reduction of the export quota to 40%.

In July 2013, some members of Knesset (MKs Yachimovich, Rivlin, Braverman & Gafni) and interest groups, (the Israel Energy Forum, "Israel Yakar Lanu", the Academic Center of Law and Business -Advs E.Michaely, E.Tzin & O.Sitbon, the Israel Union for Environmental Defense and " Emun HaTzibur") petitioned or applied for a petition to the Supreme Court.

The petitioners called for the gas export matter to be brought out of closed committee rooms and into an open Knesset debate and vote. Their collective claim: deciding on the matter by government committee constitutes an improper interpretation of Israel's Petroleum Law. The petitions and adjunct affidavits also argued that the Tzemach Committee decision-making process contained irregularities related to procedure, environmental damage and the cost of living.

Last Thursday, the preliminary hearing at the Supreme Court took place.



The Supreme Court petition was seen by many as a challenging case. The petition - in legal terms – is an "equity case" and rests on a claim of a lack of legal precedent; yet the Supreme Court seldom agrees to hear such cases. The Supreme Court rarely intervenes or annuls government regulation; and the three very senior presiding judges are reputed conservatives whose rulings tend to counter any increased Supreme Court intervention. The petition could have been dismissed with no further hearing.

And yet the case was not dismissed last Thursday. Chief Justice Grunis offered the petitioners and respondents a final hearing, with an extended bench of judges. Since a broad judicial base provides the legal system stability, should the final ruling prove controversial or ground-breaking, Chief Justice's Grunis' specification for an extended bench was dramatic as it signifies a landmark legal precedent could emerge. Furthermore, Chief Justice Grunis stated that exporting Israel's gas is a "material issue" with "high importance" that should be considered "on its own merits." This language encouraged the petitioners and its force may have disappointed the respondents. This wording sent out a message that the Supreme Court does not see the petition as an irrelevant socio-economic or professional squabble; nor would the petitioners' demand for intervention prompt the Supreme Court to dismiss the issues outright.

On Monday, the State Attorney formally accepted the offer of the Supreme Court. The final hearing is expected to take place in the coming weeks. The burden now falls on the State Attorney who must persuade the Supreme Court that determining the issue of Israel's gas exports by government committee (rather than Knesset) was legal and in accordance with Israel's Petroleum Law. The question is: will the Supreme Court be convinced by the State's interpretation of Israel's Petroleum Law?

The affidavit provided to the Supreme Court by Professor Ehud Keinan of the Technion, President of the Israel Chemical Society, editor of the Israel Journal of Chemistry, Chairman of the Education Ministry chemistry professionals and board member of the European Union Chemical Sciences argued that the added value gained from building and enlarging Israel's chemical industry based on natural gas would be far more extensive and significantly outweigh taxes proceeds that received from exporting the gas.

The affidavit provided to the Supreme Court by Dror Strum, President of the Israeli Institute for Economic Planning and former Head of the Anti Trust Authority, argued that the Tzemach Committee failed to fully and satisfactorily consider the public interest, notably the cost of living, in its deliberations.

It is not yet known how the Supreme Court sees these professional opinions. If the final hearing favors the petitioners, the Supreme Court might potentially reference them in support of bringing the matter to the Knesset.

So, what lies ahead? It is generally expected that the petition will proceed to the Supreme Court. If the Supreme Court is not satisfied by the State and rules in favor of the petitioners, the gas exports issue would then be debated in Knesset.

Though the Supreme Court said they would deal with the case promptly, if that does not happen, the State could unilaterally take the debate to Knesset, to get a swift resolution. This option is feasible, despite the vacation period; over half the Knesset Economics Committee promised to cut short their recess in order to attend a summer Knesset debate on the gas.

Of course, in a Knesset open debate and vote, the result could go either way, with regards to the export quota. Yet, the very fact of a Knesset debate would be a victory for the petitioners, since it would mean the fulfillment of a proper and full democratic process.

If the Supreme Court ultimately favors the petitioners, a precedent could emerge relating to the circumstances in which the Supreme Court intervenes in government process. It is possible that a significant new line of reasoning could evolve, in which the Supreme Court sees itself as safeguard for a Knesset debate when government procedure trespasses the public interest.

Such an eventuality could benefit Israeli citizens, by making future government committees more mindful of the public interest, particularly the cost of living. It could also be a positive outcome for Israel's Social Protest movement. Clearly, these contemplations are conjecture. The final ruling and its adjunct reasoning remains to be seen.

In the fullness of time, these developments may serve a valuable lesson. That is- administrative procedures, in particular decisions that deeply affect the Israeli public for generations to come, must enjoy full consideration in the appropriate forum. It would be unfortunate if it were to turn out that this was not the course that was taken in the instance of Israel’s gas.

Doubtless, the reasoning of the Supreme Court in its final decision will be closely observed.

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