Amiram Barkat and Yuval Azulai
Gas is about to begin flowing from the huge offshore Israeli gas field, on time and within budget. But will it benefit Israeli consumers?
The Leviathan natural gas field is set to begin streaming gas to the Israeli coast tomorrow, an event that the government and the reservoir's developers are calling historic. Almost six years since the Tamar field was connected, Leviathan will become the second major gas field connected to the Israeli coast. Nine years have passed since the discovery of the gas and the beginning of the supply, compared with only three years for the Tamar field.
Most of the gas that will begin flowing tomorrow is for exports to the Jordan Electric Power Company, and in another month also to private customers in Egypt. Commencing in another week, gas will also flow to the Israel Electric Corporation (IEC). The fact that residents near the coastal terminal will be exposed to potential health damage caused by gas, most of which is for export, is arousing criticism from residents in the Hadera region. However, the flow of gas to Jordan and Egypt has been portrayed by the Netanyahu government as an important geopolitical and political interest. In the name of this interest, Prime Minister Benjamin Netanyahu bypassed the authority of the Israel Antitrust Authority director general at the time, and signed in his place, as Minister of the Economy and Industry (after Aryeh Deri, the previous minister, resigned) an exemption for an agreement in restraint of trade for Noble Energy and Delek Group, for the deal to buy the rights to area where the Leviathan reservoir is located.
Netanyahu's signature on the exemption was part of the general arrangement for the gas production sector, referred to as the gas plan. The plan aroused strong opposition at the time, involving the assertion that the state was perpetuating the monopoly of Delek Group and Noble Energy in the Israeli gas market, and forcing electricity consumers to continue paying the excessive gas price that IEC agreed to pay for the gas it was buying from the Tamar reservoir. Netanyahu stood firm against the protest with unqualified support for the plan devised by the professional staff in his government. In an extraordinary step, Netanyahu appeared before the Knesset Economic Committee and the Supreme Court justices to defend the gas plan. They were not impressed by his appearance, and struck down the all-encompassing stability clause in the original plan.
Completion of Leviathan's development is an appropriate time to assess what the gas plan achieved since it went into effect, and where it has failed.
