Netanyahu Set to Advance Gas Plan, Ignoring Advice of Knesset Panel

Prime minister plans to bypass the Antitrust Authority to promote a deal hashed out together with Israel’s natural gas monopoly.

Offshore Leviathan natural gas drilling site.
Albatross

Prime Minister Benjamin Netanyahu is expected to push his controversial plan for developing Israel’s natural gas reserves Thursday, a move that includes taking authority for the natural gas sector away from the Antitrust Authority.

The Knesset Economics Committee finished its official advisory regarding the gas plan Wednesday, and recommended against Netanyahu’s plan to take the trustbuster’s authority via a clause in the Antitrust Law. Instead, Netanyahu needs to pass legislation to this effect, advised the committee.

Yet Netanyahu is expected to ignore this advice, instead opting to use clause 52 of the Antitrust Law to remove the trustbuster’s oversight from this matter, and thus putting the natural gas sector plan into effect.

Reuters

Netanyahu has justified his plan by saying that it would enable the country’s natural gas reserves to be developed. It was hashed out in partnership with the companies that have a monopoly over Israel’s natural gas reserves. The companies were seeking protection from changes in Israel’s regulatory environment. Among other justifications, Netanyahu has said that developing the gas reserves will enable Israel to export natural gas to Egypt, which is in Israel’s security and diplomatic interests, he claims.

The committee recommendation was signed by seven opposition members; six coalition members in the committee issued a minority opinion backing Netanyahu’s plan.

Committee chairman Eitan Cabel (Zionist Union) wrote that it seemed like Netanyahu’s justification for sidestepping the trustbuster was actually economic, and that the “artificial” use of defense and diplomacy considerations “could cause grave damage to the protection of Israel’s public against monopolies and cartels.”

Earlier Wednesday, Netanyahu’s partymate MK David Bitan said that should the Egyptian gas deal fall through, there would be no justification for overriding the trustbuster. Bitan was speaking Wednesday afternoon at a conference held by the Movement for Quality Government, and said he was representing the stance of Netanyahu’s Likud party.

“If gas isn’t exported to Egypt, the justification for going around the antitrust commissioner will disappear,” said Bitan. “If the Egyptians say that they don’t want Israeli gas due to the arbitration ruling with the Israel Electric Corporation the basis for this clause will disappear and responsibility for natural gas will go back to the Antitrust Authority,” he said.

Earlier this month, Egypt ordered two state-owned companies to freeze talks on importing Israeli gas after international arbitrators ruled the companies should pay $1.76 billion in compensation to the Israel Electric Corporation for halting gas supplies three years ago.

Bitan called for changing laws that give regulators exclusive authority over significant matters in Israel’s economy, in order to let politicians influence these decisions.

David Gilo, the former antitrust commissioner who resigned in protest over the gas deal, said legislators gave regulators exclusive authority in order to keep political considerations out of certain issues.

Gilo said that the main reason for preserving regulators’ independence is to enable them to make decisions based purely on professional considerations.

“If they face pressure from political figures, then business groups and interested companies might be able to pressure the political figure in order to pressure the regulator,” said Gilo. “Sometimes they have more ways to pressure politicians than regulators.”

Giving regulators professional independence doesn’t mean cutting ties to politicians, he added.