Lapid urges transparency in natural gas deal

June 27:

Yesh Atid chairman slams recently approved plan to allow offshore development by US-Israeli conglomerate, calling it a ‘cartel’

Yesh Atid Chairman Yair Lapid said Saturday that his party would not endorse the emerging deal between the government and a US-Israeli energy conglomerate entrusted to develop Israel’s natural gas reserves.

Ending months of legal obstacles, a government committee approved a plan Thursday to allow America’s Noble Energy and Israel’s Delek Group access to Israel’s Tamar and Leviathan offshore reserves, despite being branded a de facto monopoly by the anti-trust commissioner last year. Noble-Delek also own two smaller reserves discovered recently.

The firms have been selling gas to the Israeli market from the Tamar field, which went online in 2013, and have agreed to sell to neighboring countries as well. The heftier Leviathan field, the largest gas field in the Mediterranean, has not yet been developed

“Yesh Atid will not support a plan that does not contain a monitoring mechanism for gas prices,” Lapid said at a cultural gathering in Holon Saturday. “It cannot be done in the shadows, it must be transparent,” he said.

Lapid’s remarks come a day after Prime Minister Benjamin Netanyahu assured critics that the decision was not an indication that his government caved to a Noble-Delek monopoly.

“We are promoting a realistic solution that will bring natural gas to the Israeli market and not a populist solution that will leave the gas in the depths of the earth,” Netanyahu said.

“This dismantles the monopoly and will bring in the coming decades hundreds of millions of shekels for education, welfare, health and for every Israeli citizen,” he said.

However, Lapid, along with a number of other opposition lawmakers and former Antitrust Commissioner David Gilo, have slammed the Noble-Delek partnership as a cartel and have pushed for increased competition in Israel’s offshore gas market.

Gilo said the partnership wouldn’t really provide any real competition and resigned in protest last month.

Environmentalists have also voiced opposition to the plan, saying that increased competition would encourage the industry to use more environmentally friendly resources.

Lapid, the former finance minister, charged that the months-long debate over who would develop the offshore gas reserves was causing Israel to lose billions of shekels.

Under Thursday’s deal which was approved by the security cabinet, Delek must sell its entire share of Tamar, and Noble Energy must sell most of its holdings within six years. Delek must sell its holdings in two smaller gas fields within 14 months.

The forced sales are aimed at opening the industry to competitors. The deal also sets a price ceiling for future sales to Israeli companies and commits the gas firms to complete the development of the Leviathan gas field by 2019.

But critics say the deal might in fact strengthen the gas monopoly, because the companies will maintain a de facto monopoly over the Tamar field for the next six years before entering a similar partnership to develop the Leviathan field.

The gas deal will soon be presented for public objections and must be approved by the government before it is enacted.

Source: http://www.timesofisrael.com/lapid-urges-transparency-in-natural-gas-deal/?

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