Even the Guy on 'House of Cards' Has Red Lines - Does Netanyahu?

Would Israeli PM have the courage to stand up to the natural gas monopoly in the name of Israel’s sovereignty and its citizens energy needs?

Emil Salman

In one of the episodes of “House of Cards,” Vice President Frank Underwood attends a memorial service marking the 150th anniversary of the Cumberland (Virginia) Campaign, one of the bloodiest battles of the American Civil War. In the dead of night, in a forest where the blood of 100,000 American soldiers was spilled, Underwood secretly meets with Chinese businessman Xander Feng, the dubious ally of American energy tycoon Raymond Tusk, a patron of the U.S. president in the series.

“Your money doesn’t intimidate me,” Underwood lectures Feng, refusing to agree to macroeconomic changes that would benefit the business dealings of the two tycoons. “The most that you can buy is influence, but I wield constitutional authority.”

As corrupt, manipulative and murderous as Underwood may be, the creators of the “House of Cards" series also made sure that the slippery character would here and there also have red lines and patriotic motives, even if they serve a hidden agenda.

Thus, at least on the clods of earth in which the American ethos was cast, the office of the American presidency will not abandon the national interest to benefit foreign business interests. There are foundations you do not shake – not even in a television series.

Did Prime Minister Benjamin Netanyahu respond similarly and reject with scorn the threats of Noble Energy CEO David Stover during their phone conversation last week? Did Netanyahu make it clear to his interlocutor that Israel’s national interest trumps any business interests of a private drilling company – no matter what backing it enjoys from whatever power? Did Netanyahu also make it clear that he was prepared to risk international arbitration if need be to ensure that Israeli sovereignty would not be forfeited and its citizens would enjoy cheap, reliable gas?

The current criticism of the compromise deal the government worked out with the Noble Energy-Delek monopoly is no longer about money or distributive justice. Rather MKs, government ministers, civil servants and regulators fear the deal won’t attain its declared national objectives. In other words, the deal, as it is worded, won’t ensure the development of the Leviathan gas field on time, won’t bring a second gas pipeline from the Tamar gas field to the coast, won’t protect citizens from a private monopoly over a strategic asset and won’t safeguard enough gas for Israel’s needs, as the government set as its goals just two years ago.

These are not right-left, capitalist-socialist, Facebook-Twitter or TheMarker-others issues. These are matters of national security, around which we must set red lines. Even a cynical American TV series recognizes the occasional need to demonstration national responsibility, even if it is limited to heritage sites.

Who are the leftists being blamed for the gas deal failure?

Netanyahu and Energy Minister Yuval Steinitz have asserted for months that the compromise is not ideal, but is the best achievable under current conditions. “Rejecting the deal will delay development of the gas fields by years and cause billions of shekels of damage to the economy,” they repeatedly asserted. But what if those conditions changed in the meantime? What if external factors delayed development of the gas fields, and the economy would not earn billions of shekels? How does the government now intend to meet the goals it set for itself?

The renewed and expeditious development of Egyptian gas fields will likely cause foreign companies operating in Egypt to drag their feet in negotiations with the Leviathan owners – and thereby put off buying gas from the field and postpone funding its development. The Jordanians are also likely to leave an opening to importing Egyptian gas and limit its planned purchase of Israeli gas from Leviathan – which already got the regime at home into trouble. And what about expanding the Tamar reserve, which is meant to cover for Leviathan’s emerging delay, and fund development of additional wells and delivery of additional gas from the field to the Israeli coast through an export deal?

In the wake of the Eni gas discovery in northern Egypt, it’s clear to all that the import deal that Eni and its partners planned to sign with the owners of the Tamar reserve will not agree to a 15-year contract at a minimum price of $6 per BTU. Will the scope of the new contract – if it is signed at all – still justify expanding the field in an estimated $2 billion project? Will the Tamar owners still stand behind their plan to expand gas delivery to Israel within two years?

What will happen to Israel if regional and financial changes don’t allow the monopoly to meet its Tamar and Leviathan development obligations? Will it still be eligible for the slew of breaks it received from the government listed in the deal? Will it satill merit exemption from changes the government sought to implement in the gas market – but ws unable to do based on reasons that have since evaporated? What answer will be given to the state comptroller and the Bank of Israel governor, who already warned of such a scenario?

There’s a time limit for labeling opponents of the deal populists and leftists. At the end of the day, this infantile claim exhausts itself, and every government will be forced to deal with a broken national infrastructure replete with electricity outages and expensive electricity. What will that government do? Who will it blame then? Is it not better to prepare for those scenarios now?

Who takes responsibility for misleading the cabinet?

This writer wondered two months ago how the Egyptian gas plan would renew its gas field development, and how its success in convincing foreign investors to return to operations in the country did not appear in position papers the Foreign Ministry and National Security Council prepared to convince security cabinet ministers to urgently approve the gas deal.

This was a double screw-up. First, it created a false report that convinced ministers to make a dramatic strategic decision on the basis of misinformation. Second, it hurt Israeli security.

The “surprising” gas discovery in Egypt, and the Foreign Ministry’s and National Security Council’s refusal to respond since to the question why they ignored the Eni deal in their arguments attest to a severe failure that is damaging to Israel. NSA head Yossi Cohen and Foreign Ministry director-general Dore Gold should take responsibility for such a failure. Public figures have quit over lesser oversights, without needing others to demand their resignation.

Yet no one took responsibility. Meanwhile Netanyahu, to whom the two advisory bodies are responsible, not only didn’t hold a new debate in the cabinet although the deal had clearly been approved based on partial, if not outright wrong, information, he insists on bringing the same deal to a Knesset vote.

It’s hard to ignore the question to where Attorney General Yehuda Weinstein and his deputy, Avi Licht, disappeared. How do the two ignore a government decision made on the basis of apparently partial and mistaken information? How can they reconcile submitting a deal, the basis of whose arguments need serious updating? How does Licht, who 10 months ago warned in writing of a “frightful monopoly” in the gas market, approve regulatory immunity that will only strengthen this monopoly – based on arguments that as of a week ago no longer held water?