Israeli Cabinet Votes Yea on Natural Gas Export

Israel will keep 60% of its gas under the controversial plan approved yesterday; Jordan to get gas immediately.

The cabinet on Sunday approved a controversial plan to reserve 60 percent of Israel's natural gas for domestic use while letting the rest be exported. Ministers approved a change that will entitle Jordan to start receiving gas exports immediately.

Eighteen ministers approved the plan, while three opposed. As a result, Israel will be assured around 540 billion cubic meters of gas over the next 25 years.

The government hopes the cabinet vote will end the debate on how much of Israel's gas reserves, currently estimated at 900 bcm, should remain at home for use by industry, transportation and consumers, and how much should be sold overseas.

But a group of MKs and nonprofit organizations plans to ask the High Court of Justice on Monday to order that gas-export policy be approved by the Knesset.

The ministers backed one politically significant change that was hammered out last week by Prime Minister Benjamin Netanyahu. This would book sales to Israel's immediate neighbors, namely Jordan and the Palestinian Authority, as exports. As a result, Jordan will be entitled to 20 bcm of natural gas from the offshore Tamar field, which has been in operation since March, rather than waiting for the larger Leviathan field to come online.

"Thanks to the decisions made today, every Israeli citizen will enjoy this gift," Netanyahu said after the vote, referring to the huge offshore natural gas reserves discovered in recent years. "We will be able to lower the cost of electricity with the gas flowing into the Israeli economy, and we will invest in the public's welfare with the profit accruing to the state from gas exports."

The cabinet also voted to toughen the requirements being made on the Tamar partners to link the field to the coast and Israel's pipeline network. The partners will now be required not only to lay a second pipe to Ashkelon by the end of 2016, but to install a compressor station at the existing pipeline to increase suppy.

Peretz's choice

The three ministers opposed to the plan were Environmental Protection Minister Amir Peretz, who had sought to increase the domestic quota to 600 bcm; Communications Minister Gilad Erdan; and Health Minister Yael German, who had sought to delay any decision on exports for two years. The decision to put sales to Jordan and the PA under the export allocation came at Peretz's behest.

"I'm in favor of exports to neighboring countries to improve our relations with them, but it should come out of the allocation for exports and not out of the allocation for the domestic economy, which already is insufficient to meet its needs," Peretz said. "It will not be enough to let our transportation system, a huge source of pollution, move efficiently to a greater reliance of gas."

The petition seeking a High Court order to have the gas-export issue go to the Knesset will be presented by Labor Party chief Shelly Yacimovich and other opposition lawmakers. But MK Reuven Rivlin (Likud), will also be on board. They will be joined by nonprofit organizations including the Israel Energy Forum and the Israeli Institute for Economic Planning.

"In the past, the issue of natural gas exports was brought to the Knesset for a decision, and there's no reason to deviate from this principle," said Rivlin, a former Knesset speaker. "The extent of gas exports and all the relevant arrangements related to natural gas are matters of the greatest importance for generations. They will have a major impact on the country's economic and social strength for decades."

Those favoring a large domestic quota or no exports at all say Israel will benefit from plentiful, clean energy and ensure its energy security for decades. Opponents say exports will foster the development of more fields and give Israel a strategic asset such as close ties with Jordan.

"The discussion in the Knesset is not just a question of jurisdiction, but also of public legitimacy, which also needs to be taken into account in decisions of this magnitude," Peretz said.

But Netanyahu warned against delaying a decision by turning it over to the Knesset for approval. "Every delay in making a decision jeopardizes the government's ability to earn profits from our gas reserves," he said. "We can't let the gas remain in the ground under layers of bureaucracy and populism."

Actually, Netanyahu let the original proposal for export policy, devised by the Tzemach committee last autumn, wait until now for government approval. That panel had proposed a larger allocation for exports than the government approved Sunday.

Energy and Water Minister Resources Silvan Shalom estimated that Jordan needs three to four bcm of gas annually, but the country lacks the infrastructure to pump it to consumers. Instead, most of the gas will go to Jordan's Dead Sea potash works.

Peretz had other conditions for gas exports, namely that the liquefied natural gas facilities needed to ship the gas abroad be located off Israel's shores, not on land or in any other country.

Seven protesters arrested in Jerusalem ahead of decision

On Saturday evening, some 200 people staged a demonstration in Jerusalem to protest the gas export proposal. The demonstrators, singing slogans and banging drums, clashed with police and briefly blocked the streets around Paris Square in the center of town.

The rally began in Zion Square, and proceeded from there toward Netanyahu's formal residence. There, instead of demonstrating within the cordoned-off area set aside for them by police, the demonstrators instead opted to march around the residence, occasionally leaving sidewalks and disrupting the flow of traffic. Seven were arrested.

Drilling at the Leviathan natural gas field off the Mediterranean shore. Credit: Courtesy Albatross
Demonstrators in Jerusalem protesting the gas exports. June 23rd, 2013.Credit: Oren Nachshon

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