Kahlon Drops Natural Gas Hot Potato, Citing Conflict of Interest

Finance Minister Moshe Kahlon recuses himself from all decision-making concerning the natural gas industry due to his ties with a businessman with a stake in the Tamar gas field.

Finance Minister Moshe Kahlon, left, with Defense Minister Moshe Ya'alon.
Finance Minister Moshe Kahlon, left, with Defense Minister Moshe Ya'alon.Credit: Marc Israel Sellem

Finance Minister Moshe Kahlon asked on Tuesday to recuse himself from all decision-making concerning the natural gas industry and to transfer his authority to Prime Minister Benjamin Netanyahu, citing what he said was in a conflict of interest due to his close personal ties with a businessman holding a stake in the Tamar gas field.

The move comes as a second blow to critics of the gas monopoly, following Antitrust Comissioner David Gilo announcement a day earlier he was stepping down in August in protest against the government’s moves to weaken his plan to break up the gas cartel. Kahlon led his Kulanu Party to a strong election showing, enabling him to win the finance portfolio, on a campaign promising far-reaching economic reforms, including a commitment to break up the natural gas cartel.

During the campaign, he never cited any issues concerning his friendship with Kobi Maimon, the controlling shareholder at Isramco, which is one of the partners in the Tamar gas field.

But on an Army Radio show on Tuesday hosted by Rino Tzror, Kahlon said he informed Netanyahu of his decision only on Monday, following Gilo’s resignation. It was unclear why he chose to transfer his responsibilities to Netanyahu rather than someone else.

As reported by TheMarker, Gilo met Kahlon last Thursday before making his decision to resign. Kahlon said he told Gilo he could not discuss the matter with him.

The Finance Ministry responded with a statement saying, “At the outset of his term as finance minister, Kahlon announced that he would refrain from dealing with the natural gas market issues ... It should be noted that Kahlon refrained from addressing energy issues in the past as well, including staying away from the Sheshinski Committee, which was set up to examine policies related to oil and gas resources in Israel, including royalties. This was the result of his proximity to the subject through his friendship with Kobi Maimon, one of the prominent figures with holdings in natural gas,” the Finance Ministry statement continued.

“The finance minister has told all relevant parties, including the ministry’s legal counsel, that his responsibilities in this area would be transferred to the prime minister. At last week’s meeting with antitrust commissioner Prof. David Gilo, Kahlon notified him that he would not be able to broach the subject with him,” the statement said.

Netanyahu addressed the natural gas issue at the opening of Tuesday’s cabinet meeting. “We won’t repeat the mistake committed by countries that sought an ideal solution for their gas or oil, ending up with both oil and gas remaining deep underground or under the sea floor. They had an ideal solution that was unrealistic. Under those circumstances they could pat themselves on the back for striving for optimal competition, but this never materialized and for many years they did not enjoy even a drop of energy from those sources,” said Netanyahu.

“We will not follow suit. We’ll act on the basis of thoughtful consideration that balances competition with affordability, while extracting the gas from the sea floor. There is a blueprint for action that is a result of strenuous work done by various experts in the field. There was no consensus, and regrettably the anti-trust commissioner dissented, but we are going forward,” Netanyahu said. “I won’t let any consideration, pressure or populist moves prevent the flow of gas to the State of Israel. We’ll extract this gas from the depths and bring it to our citizens, benefiting everyone.”

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