BICOM

A key Knesset committee will today hear controversial testimony from the Environment Minister over the deal agreed which will regulate Israel’s nascent natural gas industry.

The Leviathan and Tamar off-shore natural gas fields are thought to contain around 800 billion cubic metres in gas, enough to supply the Israeli market for a century. Israeli company Delek Drilling and American firm Noble Energy hold controlling stakes in both fields and have been largely responsible for their development so far. Deals have already been agreed to supply significant quantities of gas to Jordan and Egypt.

However, further development was thrown into doubt in December 2014, when Israel’s Antitrust Regulator, David Gilo recommended ending the dominance of Noble and Delek, accusing them of constituting a monopoly. Noble and Delek indicated that they may end development entirely and concerns were raised that Gilo’s recommendation if adopted, would adversely impact not only the Israeli energy industry but wider investment in the country.

As a result, the government sought to by-pass Gilo’s recommendation and eventually found the necessary mechanism to forge a compromise agreement with Delek and Noble which “forgives” the monopoly in return for relinquishing some holdings in Tamar and two smaller fields. The agreement, which has not yet been made public, essentially regulates the natural gas industry and the share of its profits. The deal has been the subject of regular public protests, accusing the government of bowing to corporate greed.

Today, the Knesset Economics Committee will hear from Environment Minister Avi Gabbay, who opposes the gas deal on environmental grounds. However, he was told yesterday by the Attorney-General that collective cabinet responsibility means that he cannot express his opposition to the committee. The committee is meeting to deliberate over the decision to override the Antitrust Regulator. Prime Minister Benjamin Netanyahu, in his capacity as Economy Minister, will appear before the committee as will National Security Advisor Yossi Cohen. Bank of Israel Governor Karnit Flug has already given evidence.