Israeli Energy Companies Cast Their Bread Upon Academic Waters

At last week's gas cartel hearings, an official of Netanya College, which has received $2.65 million in grants from Delek, attacked the cartel's critics.

Avi Bar-Eli
Avi Bar-Eli
A protest against the gas monopoly, in Tel Aviv, May 30, 2015. Demonstrators wear masks depicting Finance Minister Moshe Kahlon and Delek's Yitzhak Tshuva, and hold a sign saying 'it's a robbery.'
A protest against the gas monopoly, in Tel Aviv, May 30, 2015. Demonstrators wear masks depicting Finance Minister Moshe Kahlon and Delek's Yitzhak Tshuva, and hold a sign saying 'it's a robbery.' Credit: Tomer Appelbaum
Avi Bar-Eli
Avi Bar-Eli

Why has the voice of Israeli academia been absent from the public debate over the natural gas market?

One possible answer to these questions emerged recently when it was learned how Dr. David Altman, vice president of Netanya Academic College, addressed the government team that is negotiating with the gas monopoly. At the public hearings on the gas industry held last week, Altman told the team that any delay in reaching an agreement with the energy sector was tantamount to a “crime,” and called the professional criticism of the flaws in the outline “national populism that has no depth or justice,” implying that critics of the so-called framework were motivated by politics.

However, in the letter Altman sent to the members of the committee, as vice president of Netanya College, he did not mention that for many years now the institution has been adopted by Yitzhak Tshuva’s Delek Group, one of the two biggest companies in the gas cartel. The company’s Delek Foundation for Science, Education and Culture has poured more than 10 million shekels ($2.65 million) into the college to fund scholarships, academic programs and facilities. Tshuva himself has received two honorary degrees from the institution while Delek’s chairman, Gabi Last, is a member of the college’s board of trustees, as is Eli Misgav, CEO of Dor Gas – like Delek, a partner in the Tamar gas field.

And as if that were not enough, Altman himself took part in the centenary bash in Manhattan that Tshuva hosted at the Plaza Hotel he purchased.

A political digging tool

In a letter to the government committee holding the hearings, Altman praised the drilling companies’ contribution to the energy sector. “How short-lived was the joy, how few the days of applause, and all of a sudden those with accounts to settle began to dicker with those who brought us this abundance and goodness,” wrote Altman, formerly vice president and director general of Bar-Ilan University.

He equated the government’s actions to the biblical Laban, who broke the promises he gave to his son-in-law Jacob. “In our heritage, the man who changed his mind and altered his agreements is considered one of the greatest swindlers in history,” warned Altman.

“Today, my colleagues and I are living with the sense that a strange coalition has arisen, which does not see the good of the people or the good of the state, and is creating a hysterical atmosphere against any arrangement,” he wrote.

Netanya Academic College denied any connection between Altman’s views and the college itself. “The college is an apolitical institution and as such it does not take a position on issues that are on the government’s agenda,” a spokesman said. “The matter is a personal initiative by a senior member of the faculty. We believe in academic freedom as a supreme value, in the context of which faculty members are entitled to express their opinions in the media and to the decision-makers.”

Altman wasn’t alone in backing the energy companies. Ruppin Technological College, which has been adopted by Delek’s partner, the American company Noble Energy, submitted a position paper during the hearings as well. A year before, in a letter to Energy Minister Yuval Steinitz, Noble general manager Tami Zukerman said the company had donated $3.4 million to Ruppin to establish a center for training employees in the gas industry.

“Noble Energy’s contribution to Ruppin College has sent new energy – in many senses of the word – flowing to a new area of the professional training we have been offering, and to answering a nationwide need for employees in the developing natural gas industry. We appreciate and are grateful for this cooperation and see Noble Energy as a full and important strategic partner in advancing the development of the college and industry in Israel,” Zukerman wrote to Steinitz.

Yet despite this professed enthusiasm for the training of Israelis for the new national industry, the energy companies pressured the Energy Ministry into declining to require the partners in the Leviathan gas field, which will be Israel’s biggest, to train Israelis in drilling skills, source equipment and local servicing.

Zukerman said over the weekend that she was not asked to send the letter, but did so at her own initiative. “I didn’t relate to the gas framework but rather to a connection I think is very positive for the development of the future industry. We established a connection with them well before the word ‘framework’ – and I can say that I have nothing to do with the aspect of the price or the monopoly, nor will I express any opinion about that.”

The intent of the letter was to call attention to the fact that Noble had taken the initiative to set up a professional training center. “With all the hue and cry surrounding the arrangement, I felt it was important to say that I have experienced partnership with a company that has an amazing entrepreneurial culture and Zionism,” Zukerman said. “Thanks to them we have acquired equipment and we have established two sophisticated laboratories – with budgets we would not have been able to obtain from the Economy Ministry.”

To the question of how Noble reacted to the sending of the letter, Zukerman replied, “Two or three days after I sent he letter their secretary contacted me and thanked me warmly. I also copied them on the letter.”

By comparison, the opinions submitted to the government by academic institutions that have not had any funding by the energy companies, such as Haifa University, have tended to be critical of the deal with gas companies.

Looking at the controversy over what kind of ceiling to place on natural gas exports, attorney Nadia Zimmerman and Dr. Yair Sagy of the Haifa University Clinic for Law and Maritime Resources Policy, took the government to task for failing to create an enforcement mechanism, or a way to ensure that enough gas was always made available for domestic needs.

In an opinion he submitted to the government hearing committee, Elai Rettig, a doctoral student in political science at Haifa University, argued against the “Iranian spin” employed by politicians, the Foreign Ministry and National Security Council to convince lawmakers and cabinet ministers to accelerate the approval of the framework.

Disputes Iran threat

Rettig, whose research deals with countries’ use of energy resources as a foreign policy tool, disputed claims that the moment the sanctions are lifted on Iran, the Islamic Republic will flood international markets with natural gas, crowding Israel out. “They are not relevant to the discussions that are underway and should be removed from the agenda,” he wrote.

Retting, who ironically holds a scholarship from the Energy Ministry, argues that Iran’s natural gas sector is in difficulties in any case, and is not developed enough to export gas in the immediate term. Secondly he says Iran will need at least a decade to build the infrastructure necessary for exporting gas. Finally he maintains that Iran will have difficulty competing with the price of Israeli gas in the export markets Israel is targeting.

Another academic institution that contacted the government team during the hearings is the College of Law and Business in Ramat Gan, which has been working for several years now to represent the public interest in shaping the gas market. In a brief letter, attorney Efy MIchaeli, who heads the privatization and regulation section at the college’s Corporate and Social Responsibility Institute, argued that the framework contains a series of “flaws and shortcomings.”

In light of the tight timeframe and shortsightedness dictated by the team in the hearings, Michaeli focused on the lack of authority and the illegality, in his view, in granting immunity to the gas companies from future antitrust claims. He declared that he intends to apply to the courts on the issue.

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