Israeli Cabinet Bypasses Hurdle en Route to Deal Between Gas Companies, Government

Interior Minister Arye Dery drops his power of veto; Knesset to vote on gas deal Monday evening.

Ofer Vaknin

The cabinet on Sunday voted to take over Economy Minister Arye Dery’s legal power to exempt a monopoly from complying with the Antitrust Law if the minister believes it is necessary to do so for reasons of Israel’s foreign or security policies. The cabinet made the move in order to get around the antitrust commissioner’s opposition to the emerging agreement between natural gas companies and the government. This evening the Knesset will be asked to approve the cabinet’s takeover of Dery’s powers in this realm.

Deputy Attorney General Dina Zilber on Sunday turned down requests by MKs seeking to prevent Prime Minister Benjamin Netanyahu from making decisions regarding the structure of the natural gas industry and prices, after it was revealed that billionaire Sheldon Adelson had communicated to Netanyahu that he should streamline regulation of the industry.

Three cabinet ministers, Moshe Kahlon, Yoav Galant and Haim Katz, have announced that they will not participate in Monday's Knesset vote; conflicts of interests have led them to recuse themselves.

Because of the coalition’s slim 61-59 majority, it will need support from the opposition to get the vote passed. Yisrael Beiteinu has announced that its faction members will vote in favor, except for MK Orli Levi-Abekasis, who said: “The details of the plan vis-à-vis the natural gas companies are not known and I don’t see a situation in which an MK can vote for something amorphous. If the plan is as good for the citizens of Israel as the prime minister presents it, on the contrary, let him reveal it to us and we will know whether to support it or not.”

It has been revealed that the government negotiators with the gas companies have agreed to grant the owners of the Leviathan field – the Delek Group and Noble Energy of the United States – 15 years’ immunity from attempts to demand competition between partners in the field. This exemption would allow the partners in the well to market the gas together until 2030 – even if Leviathan becomes the only player in the Israeli natural gas industry.

Netanyahu had the security cabinet, including Dery, vote that the natural gas agreement was a matter of national security so as to avoid regulatory limitations, when Dery suddenly announced he was giving up his powers regarding exempting monopolies from the Antitrust Law. The meeting ended in a blowout, leading to Sunday's full cabinet meeting and its decision to take over Dery’s powers.

Environmental Protection Minister Avi Gabai voted against transferring Dery’s powers to the full cabinet and criticized the fact that the emerging agreement with the natural gas giants had not been made public. “The state is the sovereign and not a business partner of the gas companies,” he said. “It must decide the regulations and not conduct negotiations. The state must hear the companies’ demands and arguments, and then use its powers to reach the best plan for Israel’s citizens,” he said. Gabai, however, is not an MK, and thus will not participate in Monday's vote.