Israeli Govt Faces Crunch Gas Decision
On February 21 Israel's government will have to respond to the supreme court’s 'friendly suggestion' to propose before parliament a bill approving the stability clause rather than approving it just as an article in the framework.
The former route would take a long time to complete but the main issue is that the government has no parliamentary majority so it would be safer to leave the decision to the court. If the judges decide to nullify the stability clause, the responsibility for the framework's collapse would be theirs.
However on February 18 two heavyweights in Israeli politics weighed in into the debate by expressing opposite stances, that were probably aimed at the judges as much as at the public. In an interview with Globes, a business daily, energy minister Yuval Steinitz defended the framework and the stability clause; while in another interview, the MP Shelly Yachimovich, the Knesset’s most vocal opponent to the framework, declared that when she becomes a minister and if the framework is approved she will not be bound by it.
Compensation claim threat
Steinitz warned against overturning the stability clause since it will lead to the collapse of the Israeli energy industry and might cost the country billions of dollars. In an unusual move reflecting his frustration he called directly to the judges to consider the implications of their decision.
"If the court strikes down the gas plan, Israel will be in a hopeless position," he was quoted as saying. "It's ridiculous for anyone to think that the gas industry can make any progress in a situation like this. We'll be unable to make progress in energy security and unable to switch industrial enterprises, trucks, and buses to natural gas, because we won't have enough gas, and will remain without the prodigious revenues we can expect from Leviathan and Karish-Tanin. Instead, we're liable to be forced to pay billions of dollars in compensation to Noble Energy and Delek Group."
Steinitz was not willing to reveal the confidential legal opinion, prepared by an American legal firm, that claims that Noble Energy, the leading offshore producer in Israel, has a good chance of winning a dispute.
According to legal sources who spoke to NGE the judges probably were not impressed by this legal opinion, as their response was to hint that they might overturn the stability clause.
On the other end of the political spectrum is Yachimovich who, in an interview with the Knesset TV channel, said that "the stability clause is not acceptable and it will not come to pass. As a minister I will not be obliged by such a framework."
Yachimovich is a former leader of the labour party and is expected to launch a leadership bid in the next primaries. The labour party today is the leading party in the Zionist Union, the biggest opposition faction in the Knesset, and one of the parties seeking the legal overturning of the framework.
"The stability clause is against the public interest," Yachimovich said. "Nowadays we see how the prices of oil are plummeting and become cheaper than [natural] gas. Israeli factories like Phoenicia, which was supposed to flourish and create jobs because of cheap gas, must buy oil because the gas is so expensive."
Ya'acov Zalel