Netanyahu Was Right to Intervene in Gas Spat

Sorry to do this to you, loyal Haaretz readers, but the prime minister has been right about two things this week.

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Off Haifa coast, oil rig at enormous Leviathan natural gas field.
An oil rig in the Leviathan natural gas field off the Haifa coast.Credit: Albatross

There’s no alternative. Haaretz must conduct a thorough investigation. How could it be that something positive about Prime Minister Benjamin Netanyahu is appearing in this newspaper twice in one week? What’s happening? Where’s the party discipline?

At the beginning of the week, Raviv Drucker wrote that Netanyahu was correct in his fight against Likud’s Central Committee on the selection of the party’s Knesset candidates. And now I am adding insult to injury by saying Netanyahu is also right when it comes the subject of Israel’s offshore natural gas sector.

True, the prime minister woke up to the issue way too late and should have intervened three years ago. But still, better late than never. Better to act now and not deteriorate into the same situation as Egypt – which, with all its quarreling, changes, delays and limitations on the gas exploration companies, has gone from being a leading gas exporter to an importer begging for a little gas from Israel because the multinationals abandoned it.

In the face of that and similar instances in Argentina and New Zealand, Netanyahu announced he was determined to come to a decision on the natural gas issue next week.

So, the populists are indignant. True also that the opposition is seething. As far as they’re concerned, it’s all right if there’s no gas at all; that the price of electricity, which can be generated by natural gas, will not go down; if factories burn expensive fuel oil. What’s most important is that those so-called tycoons don’t earn a penny. Opponents are prepared to gouge out one of their own eyes as long as Delek Group’s Yitzhak Tshuva – a partner to Leviathan, the largest offshore exploration site – loses both of his.

MK Shelly Yacimovich (Zionist Union) and her friends say there is no reason to worry; that the gas companies won’t flee the country. It’s the height of cynicism. After all, companies have already fled. It’s a fact that Australian firm Woodside Energy left and will not be investing a single dollar in developing our offshore Leviathan gas field. It’s a fact that no multinational firms are current involved in gas exploration off Israel’s coast. They are, however, conducting exploration work off the coasts of Lebanon and Cyprus. Huge damage is being done.

Yacimovich and her pals have managed to create such a difficult atmosphere of hate against business entrepreneurs that no one wants to come here. Of course, that doesn’t prevent the former Labor Party leader from shedding crocodile tears for the workers in Israel’s south. Why aren’t new factories being built there? Because you’ve chased them all away, Shelly.

All along, Yacimovich and Co. have attempted to scuttle any reasonable arrangement. They wanted Tshuva to pay an 80 percent tax, which would have made the drilling site economically unfeasible because it is situated in the middle of the sea. Then they came out against exporting any of the gas – which is totally absurd, because cash-in-hand is always better than gas underground. And now, on the last lap, Yacimovich is demanding that the developers sell gas at such a low, unreasonable price that it wouldn’t be feasible to produce, meaning it would remain underground forever. Just like in Egypt.

Just contrarian, just destroying. Just not developing. Just not creating new jobs. Yacimovich’s hatred of business entrepreneurs is so great, she doesn’t even care that for every dollar of revenue from gas, the government will receive 56 cents and the field developers just 44 cents. In other words, the developers will profit for the huge risks they took, but the government will get hundreds of billions of shekels that will be devoted to education, social welfare and infrastructure. What’s bad about that?

Plans provide for the offshore gas monopoly to be broken into three companies that will compete against each other. But until that happens, a maximum selling price needs to be set.

The most important thing, however, is to quickly agree on a plan that will restore certainty and attract multinational gas exploration firms. That would increase competition and lower prices. Eytan Sheshinski, who headed a public panel on natural resource policy and doubled the tax burden on Tshuva and his U.S. partner, Noble Energy, supports the plan. What more do we need than that?

But Yacimovich and her allies have a totally different plan in mind. Their plan is in the spirit of Soviet leader Vladimir Lenin, who, just prior to the Bolshevik revolution, announced, “The worse it gets, the better it is.” So we need to make sure it’s as bad as possible. Onward to the revolution!

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