Netanyahu: Gas Deal Makes Israel an ‘Energy Superpower’

Prime Minister Binyamin Netanyahu, in his role as Economy Minister, signed off Thursday afternoon on final approval for the deal to license the exploitation of the Leviathan gas field to Noble Energy and Delek Drilling. Netanyahu signed off on “section 52” of the deal, which overrides the veto placed against the deal in its current form by former Economy Minister Antitrust Authority head David Gilo.

Netanyahu celebrated the signing, saying that “at long last, we are bringing natural gas to Israel. This is a natural treasure that will advance the well-being of all Israelis, and bring Israel forward. It will help keep the atmosphere cleaner, create new jobs, and lower the cost of living.”

Unfortunately, said Netanyahu, the debate over the deal had deteriorated into a “populist debate. But after reading and understanding the deal, I decided to approve it. This deal will give us a cheap source of energy, and the ability to greatly increase the State’s income.” The deal will also help Israel’s foreign relations, he said, adding that both Egypt and Turkey had expressed interest in Leviathan gas. “We will soon become an energy superpower,” he added.

Energy Minister Yuval Steinitz also praised the deal, saying that he was “proud to be able to generate gas for hundreds of factories and [it] will contribute many millions of shekels to the State.” He thanked the prime minister for supporting the deal, saying that without his help, “we would not have a deal today.”

With trillions of cubic feet of natural gas, the Leviathan field promises to be a huge economic windfall for Israel – with some of the gas to be used by the Israel Electric Company to produce power, and the rest to be sold to other countries, including Egypt and Jordan. The deal on how much gas the licensees, which include Noble Energy, a U.S. energy firm, and Israel’s Delek Holdings, will be able to use and how much they will charge Israel for the gas sold under the license, has been a matter of great debate in Israel for several years.

The framework of the deal had been changed twice, as politicians in Israel claimed that the licensees were not paying enough for a deal from which they would make huge amounts of money. With the contract changed several times, Noble announced that it was withdrawing from the deal, but with the final version it appears to have decided to return.

On Monday, however, the Knesset Economics Committee recommended against approving the deal, which was opposed by former Economy Minister Antitrust Authority head David Gilo. In order to approve the deal, the Economy Minister would need to override that opposition. The Committee said that doing so was “unworthy and unnecessary,” and recommended against doing so. Former Economy Minister Rabbi Aryeh Deri resigned his post over the matter, refusing to approve the deal over Gilo’s opposition.

Despite the difficulties, Netanyahu said that the government has managed to put together a deal that balances political demands with economic realities.

As a result of his signing the deal, Netanyahu can expect to be summoned to testify at the High Court in the near future, as Zionist Camp MK Shelly Yechimovich reiterated Thursday that the party would file a petition with the High Court against the deal. “The deal Netanyahu signed is in essence a bank check for a lottery winner, except that the winners are the drilling firms, and the losers are the Israeli people. The worst part is that Netanyahu knows how damaging this deal is, and yet he insists on signing it. If the way to stop this deal is to tie it up in the High Court for years to come, then so be it.”

According to figures released last month, the State so far this year has earned NIS 594 million ($152 million) from licenses for its natural resources, almost of all of it (NIS 580 million) from the Tamar gas field licenses. Experts favoring the Leviathan licensing deals say that the country could bring in billions of shekels in fees once production begins, while those opposed to the deal say that the State could be earning much more in a better deal.