Antitrust Commissioner David Gilo shot back at his critics on Sunday, saying they weren’t providing any alternatives to ensuring a monopoly-free energy market.
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Gilo levelled a particularly sharp counterattack on Orna Hozman-Bechor, the director general of the Ministry of Infrastructure, Energy and Water Resources, who last week accused him of causing damage to the Israeli gas industry.
“From your letter, as well as from the policies of the Infrastructure Ministry over the years, [I conclude that] your position is that every other interest takes priority over the threat of the Leviathan gas monopoly,” Gilo said.
“This has been your position even it means subordinating the entire Israeli economy to a formidable gas monopoly – one that will control most of the economy’s energy resources for many years to come,” he said.
Gilo last week voided an agreement he had reached in a compromise with the Delek Group and Noble Energy that would have let them retain their control over Israel’s two biggest gas field in exchange for small concessions. He has not said what he will propose instead, but it is likely to include Delek and/or Noble selling stakes in either the Leviathan or Tamar fields.
The decision set energy shares tumbling on the Tel Aviv Stock Exchange, as well as sharp criticism from Noble and energy experts on the grounds that it would delay developing the Leviathan field by years and deter future investment.
Energy shares were mostly lower on the TASE Sunday, but the Leviathan gas field partners extended the rebound that got underway Thursday. While Ratio ended down 1.7% at 34 agorot (9 cents), Delek Drilling climbed 1.7% to close at 15.40 and Avner by 1.6% to 2.88. Delek Group, which controls the latter two companies, ended at 1,004 shekels, up 1.4%. On Friday, Noble Energy, the Texas company with stakes in both fields, dropped 1.9% to $47.22.
Gilo answered Infrastructure Ministry charges that he acted last week without any advance notification by saying that the ministry had declined in the past to offer an opinion on the compromise agreement he was now voiding. The ministry, he asserted, was only supporting the compromise now that he was rescinding it.
Gilo said the ministry had declined to take measures that would have helped ensure a competitive market, among them ordering more gas be sold domestically and ensuring more capacity to take gas from the Tamar field, the only one of the two now in production.
Officials had not acted to create gas shortage facilities from the now-depleted Tethys sea field or compel the license holders of the smaller Karish, Tanin and Shimshon fields to develop their gas, he said.
“The Israeli consumer not only deserves natural gas but natural gas at a competitive price,” Gilo added.
In response, the Infrastructure Ministry on Sunday reiterated its accusations that Gilo acted without consulting with other bodies responsible for energy policy. “We don’t intend to argue with the commissioner but to provide real, responsible and professional solutions for advancing the natural gas industry,” it said in a statement.
Meanwhile, the Manufacturers Association on Sunday joined the ranks of Gilo’s critics, although it didn’t reject the idea of the government intervening in the gas market. “The commissioner’s decision is most problematic and likely to bring about long-term delays in the Israeli natural gas sector,” said Zvi Oren, president of the association, which represents Israel’s big industrialists.
He called on the prime minister and infrastructure minister to create a mechanism that would ensure gas prices at their current “reasonable” levels, and a regulatory environment that would allow the gas sector to grow and develop.