Israel's gas deal will hurt consumers, say critics


On Sunday, the Israeli cabinet voted 17-1 in favour of accepting a regulatory framework for the natural gas industry that has been widely criticised for giving too much power to an energy cartel.

Under the new framework, the two companies that together own the largest gas fields, Leviathan and Tamar, will lower the maximum price of gas to Israeli consumers.

For its part, the government is committed to not pursuing any structural changes to the gas market for the next ten years.

The framework is almost certainly assured of a majority in the Knesset now that it has been authorised by the cabinet. Yisrael Beiteinu, which is in opposition, has said it will support the framework, a move that will counter-balance the handful of rebel coalition members expected to vote against or abstain.

The main criticism of the framework, aside from the designated maximum price for consumers - which many believe is still too high - is that the cartel owned by Israel's Tshuva Group and American Nobel Energy will remain a monopoly and not be forced to divest its holdings from one of the two large fields, as recommended earlier this year by the head of the anti-trust authority.

In addition, they did not have to commit to laying a second pipeline from the Tamar field and were allowed another four years before bringing the larger Leviathan field on-stream.

Prime Minister Benjamin Netanyahu said before the vote "this process will not be stopped. I'm not impressed by populism and the state needs this gas".

Mor Gilboa, head of the environmental group Megama Yeruka, said the framework "creates massive profits for the gas barons and denies the Israeli public its natural resources".

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